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Famous Dave's Franchise ProfileFood Franchises > Casual Dining |
What Are the Initial Investment Requirements for a Famous Dave's Franchise?
To become a franchisee of Famous Dave's, you should anticipate an initial investment ranging from $80,500 to $4,495,750. The franchise fee varies between $15,000 and $45,000, depending on the location and size of the unit. Additionally, you will need to demonstrate a cash requirement of $80,500 to $585,000 and a net worth of $500,000 to $1,500,000. These financial thresholds are crucial for ensuring that potential franchisees have the necessary resources to launch and sustain their business.
What Are the Ongoing Fees Associated with a Famous Dave's Franchise?
As a Famous Dave's franchisee, you will be responsible for ongoing fees that include a royalty fee of 5% of your gross sales and a marketing fee of 1%. These fees are essential for maintaining brand standards and supporting national advertising efforts. Understanding these costs upfront can help you better plan your financial strategy and ensure that you are prepared for the ongoing investment required to operate your franchise successfully.
What Is the Average Revenue Potential for a Famous Dave's Franchise?
Famous Dave's franchises can generate significant revenue, with an average annual revenue per unit reported at approximately $2,996,521. The median annual revenue stands at $2,967,673, indicating a healthy income potential. However, it's important to note that revenues can vary widely, with the lowest recorded annual revenue at $852,846 and the highest reaching $6,379,347. This variance highlights the importance of location, management, and market conditions in determining your franchise's financial performance.
What Is the Typical Breakeven and Payback Period for a Famous Dave's Franchise?
Franchisees can expect to reach their breakeven point within approximately 18 months after opening. This relatively quick recovery period is a positive indicator for investors. Additionally, the investment payback period is estimated at around 12 months, meaning that you could recoup your initial investment in just one year of operation. These timelines can significantly influence your decision-making process when considering the financial viability of a Famous Dave's franchise.
Famous Dave's Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Famous Dave's Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 122 | 136 | 132 |
| Net Change YoY | 14 | -4 | |
| Franchised Units | 90 | 97 | 90 |
| Net Change YoY | 7 | -7 | |
| Corporate Units | 32 | 39 | 42 |
| Net Change YoY | 7 | 3 |
Company Background
Famous Dave's is a renowned barbecue restaurant chain founded in 1994 by Dave Anderson in Hayward, Wisconsin. Known for its mouthwatering ribs and a variety of smoked meats, Famous Dave's has established itself as a leader in the casual dining segment. With a focus on authentic, flavorful barbecue and a warm, inviting atmosphere, the brand has grown to encompass over 130 locations across the United States, offering a memorable dining experience for barbecue lovers.
Franchise Opportunity
Investing in a Famous Dave's franchise presents a unique opportunity for aspiring entrepreneurs. With an initial investment ranging from $80,500 to $4,495,750, franchisees can tap into a well-established brand with a loyal customer base. The franchise model is designed for success, with comprehensive training and support to help franchisees thrive in the competitive restaurant market. Famous Dave's offers a proven operational system and marketing strategies that can lead to profitable outcomes.
Financial Overview
Famous Dave's franchises have shown promising financial performance, with average annual revenue per unit at approximately $2,996,521. The brand's strong profitability is reflected in its median annual revenue of $2,967,673. Franchisees can expect a breakeven time of around 18 months and an investment payback period of just 12 months, making it an attractive option for those looking to enter the restaurant industry.
Royalty and Marketing Fees
Franchisees are required to pay a royalty fee of 5% of gross sales, along with a marketing fee of 1%. These fees contribute to the overall brand strength and marketing efforts that drive customer traffic to each location. By participating in a collective marketing strategy, franchisees benefit from increased visibility and brand recognition, which can lead to higher sales.
Operational Costs
Famous Dave's franchises incur various operational expenses, with total running expenses averaging around $112,963 annually. Key costs include wages and benefits at $60,607, rent at $10,060, and professional fees at $15,139. Understanding these costs is crucial for franchisees to manage their finances effectively and ensure a profitable operation.
Growth Potential
Famous Dave's has demonstrated steady growth, with 90 franchised units in 2020, increasing to 97 in 2021, and maintaining 90 in 2022, alongside a rise in corporate units from 32 to 42 during the same period. This stability indicates a robust franchise system with room for expansion, making it an appealing choice for multi-unit operators and those looking to invest in a growing brand.
Frequently Asked Questions
The initial investment for a Famous Dave's franchise ranges from $80,500 to $4,495,750, which includes the franchise fee and other startup costs.