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Fazoli's Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for a Fazoli's Franchise?
To open a Fazoli's franchise, you should be prepared for a significant initial investment ranging from $377,500 to $2,328,500. This investment includes a franchise fee of $50,000. Additionally, you will need to have liquid cash available between $60,000 and $120,000 and a net worth of $300,000 to $600,000. Understanding these financial requirements is crucial for aspiring franchisees to ensure they can meet the startup costs and sustain operations.
What Are the Ongoing Fees for Fazoli's Franchisees?
Fazoli's franchisees are required to pay a royalty fee of 4% of their gross sales, in addition to a marketing fee of 4%. These ongoing fees are essential for supporting the brand’s marketing efforts and operational support. Franchisees should factor these costs into their financial planning to maintain profitability while ensuring compliance with the franchise system.
What Is the Average Revenue Potential for a Fazoli's Franchise?
Fazoli's franchises have a strong revenue potential, with average annual revenue per unit reported at $1,094,219. The median annual revenue is slightly lower at $1,066,080, while the revenue range varies from a low of $540,645 to a high of $1,931,719. This revenue potential highlights the brand's strong market presence and the opportunity for franchisees to achieve significant financial success.
What Is the Expected Breakeven Time for Fazoli's Franchisees?
Franchisees can expect to reach their breakeven point in approximately 18 months. With an investment payback period of around 15 months, this timeline indicates a relatively quick return on investment compared to many other franchise opportunities. Understanding these metrics can help potential franchisees assess the financial viability of their investment in a Fazoli's franchise.
Fazoli'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:
Fazoli's Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2019 | 2020 | 2021 |
|---|---|---|---|
| Total Units | 197 | 200 | 198 |
| Net Change YoY | 3 | -2 | |
| Franchised Units | 147 | 150 | 143 |
| Net Change YoY | 3 | -7 | |
| Corporate Units | 50 | 50 | 55 |
| Net Change YoY | 0 | 5 |
Initial Investment
The Fazoli's franchise requires an initial investment that ranges from $377,500 to $2,328,500. This investment covers various startup costs, including equipment, real estate, and initial inventory, ensuring franchisees are well-prepared to launch their restaurant.
Franchise Fees
To become a Fazoli's franchisee, there is an initial franchise fee of $50,000. Additionally, franchisees are required to pay ongoing royalty and marketing fees, both set at 4% of gross sales, contributing to the brand's collective marketing efforts and support systems.
Financial Performance
Fazoli's franchises have shown promising financial performance, with an average annual revenue per unit of $1,094,219. The median annual revenue is slightly lower at $1,066,080, while the range of annual revenue varies significantly, with the lowest at $540,645 and the highest reaching $1,931,719.
Breakeven and Payback
Franchisees can expect to break even within approximately 18 months of operation. The investment payback period is notably quick, averaging around 15 months, making it an attractive option for those looking to recoup their initial investment efficiently.
Required Financial Qualifications
To qualify for a Fazoli's franchise, potential franchisees must demonstrate a net worth between $300,000 and $600,000. Additionally, they should have liquid cash available ranging from $60,000 to $120,000 to cover initial operational needs and ensure a smooth startup process.
Growth and Unit Expansion
Fazoli's has shown steady growth in its franchised units, with 147 units in 2019, increasing to 150 in 2020, before slightly declining to 143 in 2021. The brand also operates 50 corporate units, expanding its presence while maintaining a balance between franchised and company-owned locations.
Frequently Asked Questions
The initial investment for a Fazoli's franchise ranges from $377,500 to $2,328,500, which includes the franchise fee, equipment, and other startup costs.