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Schlotzsky's Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What is the Initial Investment for a Schlotzsky's Franchise?
To open a Schlotzsky's franchise, the initial investment ranges from $575,185 to $1,904,550. This includes a franchise fee of $35,500. Potential franchisees should also prepare for a cash requirement of $39,000 to $51,000, along with a net worth requirement between $100,000 and $1,000,000. Understanding these financial commitments is crucial for aspiring franchise owners.
What Are the Ongoing Fees for Schlotzsky's Franchisees?
Franchisees of Schlotzsky's are subject to ongoing fees, including a royalty fee of 6% on gross sales and a marketing fee of 4%. These fees contribute to the brand's overall marketing efforts and operational support, ensuring franchisees benefit from a recognized brand presence and customer outreach. Budgeting for these costs is essential for maintaining profitability.
What Are the Revenue Expectations for a Schlotzsky's Franchise?
On average, Schlotzsky's franchise units generate annual revenues of approximately $1,143,575, with a median revenue of $1,091,897. However, revenues can vary significantly, with the lowest recorded at $241,009 and the highest reaching $2,741,933. Understanding these revenue potential figures helps franchisees set realistic financial goals and performance benchmarks.
What is the Breakeven Timeline for a Schlotzsky's Franchise?
Franchisees can expect to reach breakeven within approximately 18 months of operation. The investment payback period is estimated at 24 months, allowing franchisees to recover their initial investments relatively quickly compared to other business models. This timeline is an important consideration for those evaluating the financial viability of entering the Schlotzsky's franchise system.
Schlotzsky'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:
Schlotzsky's 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 | 324 | 326 | 317 |
| Net Change YoY | +2 | -9 | |
| Franchised Units | 300 | 299 | 295 |
| Net Change YoY | -1 | -4 | |
| Corporate Units | 24 | 27 | 22 |
| Net Change YoY | +3 | -5 |
Investment Overview
The initial investment for a Schlotzsky's franchise ranges from $575,185 to $1,904,550. This includes a franchise fee of $35,500, along with additional costs such as a cash requirement of $39,000 to $51,000. Potential franchisees should also be aware of ongoing royalty and marketing fees, set at 6% and 4% of gross sales, respectively.
Financial Performance
On average, a Schlotzsky's unit generates annual revenue of approximately $1,143,575, with a median revenue of $1,091,897. The lowest reported annual revenue is $241,009, while the highest reaches $2,741,933. Franchisees can expect to break even within about 18 months and achieve a full investment payback in around 24 months.
Franchise Growth
Schlotzsky's has seen a steady number of franchised units over recent years, with 300 units in 2021, 299 in 2022, and 295 in 2023. The total number of units, including corporate locations, reflects a slight decline, indicating a need for potential franchisees to evaluate market conditions and growth opportunities.
Operating Expenses
Average operating expenses for a Schlotzsky's franchise unit amount to approximately $389,447 annually, accounting for 34.1% of revenue. Key expenses include rent, utilities, marketing, and legal fees, which together contribute to the overall cost structure that franchisees must manage effectively.
Corporate Structure
Schlotzsky's is a subsidiary of Focus Brands, which operates a diverse portfolio of food service brands. The corporate headquarters is located in Atlanta, Georgia, where strategic decisions regarding brand development, marketing, and support for franchisees are made to enhance operational efficiency and brand presence.
Training and Support
Franchisees benefit from a comprehensive training program designed to equip them with the necessary skills for success. This includes both on-site training and management training, which are crucial for understanding operational processes, customer service standards, and marketing strategies essential for running a Schlotzsky's location.
Frequently Asked Questions
The initial investment for a Schlotzsky's franchise ranges from $575,185 to $1,904,550, which includes the franchise fee and other startup costs.