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Long John Silver's Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for a Long John Silver's Franchise?
To open a Long John Silver's franchise, you should prepare for a significant initial investment ranging from $677,500 to $2,228,000. This includes a franchise fee of $35,000, along with ongoing royalty and marketing fees of 5% each. Additionally, you will need to have liquid cash available between $50,000 and $130,000, and a net worth of $500,000 to $1,000,000 to qualify for franchise ownership.
What Is the Average Financial Performance of a Long John Silver's Franchise?
On average, a Long John Silver's franchise generates an annual revenue of approximately $282,211 per unit. The financial metrics reveal a gross profit margin of 68%, with operating expenses accounting for about 19.6% of revenue. This indicates a relatively healthy profit potential, although franchisees should remain vigilant in managing costs to optimize their earnings.
What Are the Trends in Long John Silver's Franchise Units?
The number of franchised units for Long John Silver's has shown a decline over the past few years, decreasing from 475 units in 2020 to 362 units in 2022. In contrast, corporate-owned units have seen a slight increase, suggesting a strategic shift that may impact franchise opportunities. This trend highlights the importance of evaluating market conditions and brand stability before investing.
How Quickly Can You Expect to Break Even with a Long John Silver's Franchise?
Franchisees can anticipate a breakeven time of approximately 12 months, with an investment payback period of around 24 months. These timelines can vary based on location, management efficiency, and market demand. Understanding these financial timelines is crucial for potential franchisees to assess the viability of their investment and plan accordingly.
Long John Silver'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:
Long John Silver'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 | 674 | 635 | 587 |
| Net Change YoY | -39 | -48 | |
| Franchised Units | 475 | 414 | 362 |
| Net Change YoY | -61 | -52 | |
| Corporate Units | 199 | 221 | 225 |
| Net Change YoY | 22 | 4 |
Initial Investment
The initial investment for a Long John Silver's franchise ranges from $677,500 to $2,228,000. This includes a franchise fee of $35,000, which grants you access to the brand and its operational support. Additionally, potential franchisees should be prepared for ongoing costs, including a 5% royalty fee on gross sales and a 5% marketing fee to support brand initiatives.
Financial Requirements
To qualify for a Long John Silver's franchise, you will need a minimum cash requirement of $50,000 to $130,000 and a net worth between $500,000 and $1,000,000. These financial benchmarks ensure that franchisees have the necessary resources to manage their business effectively and sustain operations during the initial phase.
Revenue Potential
Long John Silver's franchises demonstrate significant revenue potential, with an average annual revenue per unit reported at $282,211. The median annual revenue is notably higher at $1,269,000, indicating that while some units may perform below average, others achieve substantial sales figures, contributing to overall profitability.
Breakeven and Payback
Franchisees can expect to reach breakeven within approximately 12 months of opening their Long John Silver's location. The investment payback period is estimated at 24 months, allowing franchisees to recover their initial investment relatively quickly compared to many other franchise opportunities.
Franchise Growth
The Long John Silver's franchise system has seen fluctuations in its unit count over recent years. In 2020, there were 475 franchised units, which decreased to 362 by 2022. This trend reflects the competitive landscape of the fast-food industry and underscores the importance of strategic location and operational efficiency for franchise success.
Operational Insights
The average annual revenue for Long John Silver's franchise units contributes to a gross profit margin of 68%. Operating expenses account for about 19.6% of revenue, with significant costs attributed to employee compensation, rent, and marketing. Understanding these financial metrics is crucial for franchisees aiming to optimize their profitability and manage operational challenges effectively.
Frequently Asked Questions
The initial investment for a Long John Silver's franchise ranges from $677,500 to $2,228,000. This includes the franchise fee, equipment, and other startup costs.