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Red Robin Gourmet Burgers and Brews Franchise ProfileFood Franchises > Casual Dining |
What Are the Initial Investment Requirements for a Red Robin Franchise?
To open a Red Robin Gourmet Burgers and Brews franchise, you'll need an initial investment that ranges from $1,865,000 to $4,115,000. This includes a franchise fee of $35,000. Additionally, you should have cash readily available between $1,865,000 and $3,635,000, along with a net worth requirement of $1,000,000 to $1,500,000. Understanding these financial commitments is crucial before embarking on your franchise journey.
What Are the Ongoing Fees Associated with a Red Robin Franchise?
As a Red Robin franchisee, you'll be subject to ongoing fees that include a royalty fee of 5% of your gross sales and a marketing fee of 2%. These fees contribute to the overall brand strength and local marketing efforts, ensuring that you remain competitive in the marketplace. Being aware of these costs will help you plan your financial strategy effectively.
What Is the Average Revenue Potential for a Red Robin Franchise?
Red Robin franchises have the potential for significant revenue, with average annual sales reaching approximately $3,182,136 per unit. The median annual revenue is slightly lower at $3,097,311, while revenues can vary widely, with the lowest at $1,893,347 and the highest at $5,175,049. Understanding these figures can help you set realistic financial goals for your franchise.
How Long Does It Take to Break Even with a Red Robin Franchise?
Franchisees can expect to reach their breakeven point within about 24 months of opening their Red Robin location. The investment payback period is estimated at 35 months. These timelines are critical for prospective franchisees to consider, as they provide insight into the financial viability and expected return on investment for your business.
Red Robin Gourmet Burgers and Brews 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:
Red Robin Gourmet Burgers and Brews Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2016 | 2017 | 2018 |
|---|---|---|---|
| Total Units | 530 | 545 | 554 |
| Net Change YoY | 15 | 9 | |
| Franchised Units | 86 | 86 | 89 |
| Net Change YoY | 0 | 3 | |
| Corporate Units | 444 | 459 | 465 |
| Net Change YoY | 15 | 6 |
Investment Overview
The initial investment for a Red Robin Gourmet Burgers and Brews franchise ranges from $1,865,000 to $4,115,000. This includes a franchise fee of $35,000. Franchisees should be prepared for ongoing costs, including a 5% royalty fee on gross sales and a 2% marketing fee. It’s crucial for potential franchisees to have liquid capital between $1,865,000 and $3,635,000 and a net worth of $1,000,000 to $1,500,000 to qualify for ownership.
Financial Performance
Red Robin franchises report an average annual revenue of approximately $3,182,136, with a median revenue of $3,097,311 per unit. The revenue can vary significantly, with the lowest recorded at $1,893,347 and the highest at $5,175,049. Understanding these figures can help potential franchisees gauge the financial viability and potential returns of their investment.
Breakeven and Payback Period
Franchisees can expect to reach their breakeven point within approximately 24 months of operation. The investment payback period is estimated at around 35 months, providing a timeline for when franchisees can start seeing a return on their initial investment. This information is essential for financial planning and setting realistic expectations for new owners.
Corporate and Franchise Units
As of 2018, Red Robin operates a total of 554 units, with 89 of those being franchised locations. The company has shown steady growth in both franchised and corporate units over the years, indicating a stable brand presence and potential for expansion in the franchise model.
Operating Expenses
The average annual operating expenses for a Red Robin franchise are approximately $1,588,275. Key expense categories include labor and benefits ($1,036,327), occupancy costs ($114,146), and other operating expenses ($182,084). Understanding these costs is vital for franchisees to manage their budgets effectively and optimize profitability.
Brand Identity
Red Robin Gourmet Burgers and Brews is known for its gourmet burgers and casual dining atmosphere. The brand emphasizes quality ingredients, innovative menu offerings, and a family-friendly environment. This strong brand identity not only attracts customers but also creates a loyal following, making it an appealing choice for aspiring franchisees looking to enter the competitive food service market.
Frequently Asked Questions
The initial investment for a Red Robin franchise ranges from $1,865,000 to $4,115,000. This includes the franchise fee, equipment, and other startup costs.