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Charleys Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for a Charleys Franchise?
To open a Charleys franchise, you will need to prepare for a range of initial investment costs. The total investment can vary significantly, with a low end of approximately $202,059 and a high end reaching up to $935,700. This includes a franchise fee of $24,500, as well as ongoing expenses such as a 6% royalty fee and a 3% marketing fee. Additionally, prospective franchisees must demonstrate a net worth between $500,000 and $1,000,000 to qualify for ownership.
What Is the Average Financial Performance of a Charleys Franchise?
Charleys franchises typically generate strong financial results, with an average annual revenue of $942,354 per unit. This performance is bolstered by a gross profit margin of 60%, allowing for a healthy EBITDA of approximately $188,470, which represents 20% of revenue. However, revenue can vary widely, with the lowest annual revenue reported at $146,455 and the highest reaching $3,166,966. Understanding these figures is crucial for evaluating the potential return on your investment.
How Quickly Can You Expect to Break Even with a Charleys Franchise?
Franchisees can anticipate a relatively quick breakeven period of around 12 months. This timeline is favorable compared to many other franchise opportunities, allowing new owners to recoup their initial investment efficiently. With an investment payback period of approximately 24 months, Charleys presents an attractive option for those looking to enter the franchise market with a solid plan for financial recovery.
What Is the Growth Potential for Charleys Franchises?
Charleys has shown consistent growth in its franchise network, increasing from 496 franchised units in 2021 to 611 in 2023. This upward trend reflects the brand's expanding presence and popularity, indicating a robust market demand for its offerings. As Charleys continues to grow, franchisees may benefit from increased brand recognition and customer loyalty, enhancing their potential for profitability in the competitive food service sector.
Charleys 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:
Charleys Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 551 | 599 | 672 |
| Net Change YoY | 48 | 73 | |
| Franchised Units | 496 | 538 | 611 |
| Net Change YoY | 42 | 73 | |
| Corporate Units | 55 | 61 | 61 |
| Net Change YoY | 6 | 0 |
Investment Overview
Charleys is an appealing franchise opportunity with a low initial investment ranging from $202,059 to $935,700. This includes a franchise fee of $24,500, along with ongoing royalty and marketing fees of 6% and 3%, respectively. Potential franchisees should be prepared to meet a cash requirement between $202,059 and $935,700, and a net worth of $500,000 to $1,000,000 to qualify for ownership.
Financial Performance
On average, Charleys units generate an impressive annual revenue of $942,354. The financial metrics indicate a gross profit margin of 60%, translating to a gross profit of approximately $565,412 per unit. With a breakeven time of just 12 months and an investment payback period of 24 months, Charleys presents a strong financial proposition for franchisees.
Franchise Growth
Charleys has demonstrated consistent growth in its franchise network, with 496 franchised units in 2021, increasing to 611 units by 2023. This growth reflects the brand's expanding market presence and its appeal among entrepreneurs looking for a profitable franchise model. The total units have grown from 551 in 2021 to 672 in 2023, showcasing robust franchise development.
Operational Insights
Franchisees can expect annual operating expenses to total around $771,206, which includes lease expenses, salaries, insurance, and marketing. With a focus on maintaining operational efficiency, understanding these costs is crucial for maximizing profitability. The average cost of goods sold (COGS) is approximately $376,942, representing 40% of revenue.
Support and Training
Charleys provides comprehensive support and training to its franchisees, ensuring they are well-equipped to manage their operations. This includes initial training programs, ongoing operational support, and marketing assistance. The franchise’s commitment to franchisee success is evident in its structured support system, which aims to foster a thriving business environment.
Brand Identity
Charleys is known for its fresh, high-quality cheesesteaks and other delicious menu offerings. The brand emphasizes a commitment to quality ingredients and exceptional customer service, creating a strong identity in the fast-casual dining sector. This focus on quality not only attracts customers but also builds loyalty, making Charleys a compelling choice for aspiring franchise owners.
Frequently Asked Questions
The initial investment for a Charleys franchise ranges from $202,059 to $935,700. This includes the franchise fee, equipment, leasehold improvements, and other startup costs.