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Raceway Franchise ProfileRetail Franchises > Convenience Stores |
What Are the Initial Investment Requirements for a Raceway Franchise?
To open a Raceway franchise, you'll need to prepare for a range of initial investment costs. The total investment can vary significantly, with a low end of $197,500 and a high end reaching $585,000. The initial franchise fee is set at $25,000, and you'll also need to account for ongoing costs, including a 6% royalty fee and a 2% marketing fee. It's essential to have cash reserves between $25,000 and $100,000, along with a net worth requirement of $250,000 to $500,000 to qualify for ownership.
What Are the Financial Performance Metrics for Raceway Franchise Units?
Raceway franchises have shown promising financial performance metrics. The average annual revenue per unit stands at approximately $4,547,000, with a median revenue of $1,400,000. Units have reported a breakeven time of around 24 months, and the investment payback period is also estimated at 24 months. Notably, the lowest annual revenue reported is $200,000, while some units have achieved as much as $2,385,000 in annual revenue. These figures underscore the potential profitability of the franchise model.
What Are the Typical Ongoing Expenses for a Raceway Franchise?
Owning a Raceway franchise comes with various ongoing expenses that you should be prepared for. Rent can range from $21,000 to $120,000 annually, while marketing and advertising costs typically fall between $2,500 and $5,000. Additionally, you should budget for miscellaneous opening costs of around $15,000 to $20,000 and maintain additional funds for three months, estimated at $20,000 to $40,000. Overall, total annual expenses can range from $78,500 to $310,000, depending on your specific circumstances.
What Growth Trends Are Observed in the Raceway Franchise Network?
The Raceway franchise network has demonstrated consistent growth over the past few years. In 2020, there were 199 franchised units, which increased to 204 in 2021 and further to 213 in 2022. This upward trend indicates a healthy expansion of the brand and suggests that franchisees are capitalizing on the business model's potential. With no corporate-owned units, the franchise's growth is entirely reliant on its franchisees, making it an appealing opportunity for aspiring entrepreneurs looking to join a growing network.
Raceway 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:
Raceway 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 | 199 | 204 | 213 |
| Net Change YoY | 5 | 9 | |
| Franchised Units | 199 | 204 | 213 |
| Net Change YoY | 5 | 9 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The Raceway franchise offers a low initial investment ranging from $197,500 to $585,000. This investment covers various startup costs, including the initial franchise fee of $25,000. Potential franchisees should prepare for additional expenses that may arise during the setup phase.
Financial Performance
Raceway franchise units report an average annual revenue of $4,547,000, with a median annual revenue of $1,400,000. The highest annual revenue recorded per unit is $2,385,000, indicating strong earning potential for franchisees who effectively manage operations and marketing.
Royalty and Marketing Fees
Franchisees are required to pay a royalty fee of 6% on gross sales, along with a marketing fee of 2%. These fees contribute to the overall brand strength and marketing initiatives that support franchise growth, ensuring a consistent customer experience across all locations.
Required Financial Qualifications
Aspiring franchisees must demonstrate a net worth between $250,000 and $500,000 and have liquid cash available ranging from $25,000 to $100,000. These requirements help ensure that franchisees are financially equipped to sustain operations and support their businesses during the initial growth phase.
Breakeven and Payback Period
The average breakeven time for a Raceway franchise is estimated at 24 months, with an investment payback period also projected at 24 months. This timeline provides potential franchisees with a clear understanding of when they can expect to recover their initial investments and begin generating profit.
Growth and Expansion
The Raceway franchise has shown consistent growth, increasing from 199 franchised units in 2020 to 213 in 2022. This upward trend reflects the brand's expanding market presence and the successful replication of its business model, making it an attractive opportunity for new franchisees looking to join a thriving network.
Frequently Asked Questions
The initial investment for a Raceway franchise ranges from $197,500 to $585,000, which includes the initial franchise fee of $25,000.