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Culver’s Restaurant Franchise Cost: How Much Does It Cost to Start a Culver’s Franchise?
Franchising your business can be an excellent way to expand, particularly if you’re looking to get started in the restaurant industry. Culver’s Restaurant Group franchises one of the most beloved fast food restaurants around, with over 700 locations across the country and more opening every day. If you want to learn more about how to start the franchise and what the Culver’s franchise cost is, keep reading!
Franchise Description
Culver’s is a fast casual restaurant chain specializing in American comfort food. The company was founded in 1984 and has since grown to over 700 locations across the United States.
If you’re interested in starting a Culver’s franchise, you’ll need to have a minimum of $1 million in liquid assets and a net worth of at least $5 million. The total investment required to start a franchise ranges from $2.3 million to $5.4 million.
Training Overview
A Culver’s franchise offers a comprehensive training program that covers all aspects of running a successful restaurant. The Culver’s Manager in Training Program includes classroom instruction, on-the-job training, and ongoing support. When starting out as a new business owner, you will also need to take care of marketing, hiring staff, inventory management, financial operations and more.
Territory Granted
When you are granted a territory, you will be given an exclusive geographic area in which to operate your Culver’s franchise. The size of the territory will be based on the population density and the number of potential customers in the area.
Obligations and Restrictions
When you become a Culver’s franchisee, you’re making a 20-year commitment to the brand. You’ll be expected to open and operate your restaurant according to Culver’s high standards, and you’ll be required to pay ongoing royalties and marketing fees. There are also restrictions on where you can build your restaurant – it must be located in an approved market, and it must meet certain size and layout requirements.
The company provides support through its regional offices, which include staffing with food service professionals and culinary consultants. All these factors make the cost of opening a Culver’s restaurant start at $2 million or more.
Term of Agreement and Renewal
The term of the Franchise Agreement is 15 years, with an option to renew for an additional 10 years. The initial franchise fee is $55,000, with a continuing royalty fee of 4% of gross sales. There is also a marketing fund contribution of 2.5% of gross sales. In order to open a Culver’s restaurant, you must have prior experience as a restaurateur and have at least $1 million in liquid assets.
Did You Know?
Here are a few facts you might not know about Culver’s Restaurants:
1. In 1984, Craig and Lea Culver founded Culver’s in Sauk City, Wisconsin.
2. Today, there are over 785 Culver’s restaurants in 26 states.
3. A typical Culver’s restaurant is around 4,500 square feet and employs 60-70 people.
Culver’s Franchise Cost
Here’s Culver’s Franchise Cost:
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $20,000 | $55,000 |
| Land | $330,000 | $1,800,000 |
| Site Work | $258,000 | $906,000 |
| Building | $1,121,000 | $1,619,000 |
| Travel, Living and Expenses During Training | $20,000 | $80,000 |
| Initial Inventory | $35,000 | $50,000 |
| Furniture, Fixtures, Equipment and Supplies (Excluding Sign Package and POS Cash Register System) | $395,000 | $510,000 |
| Sign Package | $106,000 | $220,000 |
| POS Cash Register System | $43,000 | $52,000 |
| Miscellaneous Expenses | $20,000 | $40,000 |
| Additional Funds (working capital for 3 months) | $50,000 | $100,000 |
| ESTIMATED TOTAL | $2,398,000 | $5,432,000 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Service Fee | 4% of gross sales. |
| Advertising Fee | 2.5% of gross sales. |
| Cooperative Advertising | Up to 4% of the gross sales, as approved by a majority vote of the members of the co-op advertising region. |
| Additional Training | $1,000 per person. |
| E-Learning Program | Currently $200 per quarter or $740 annually. |
| Additional Assistance | $500 per week. |
| Site Review Site | $500 per site after four site reviews. |
| Custom Design Fee | Up to $5,000. |
| Extraordinary Building Assistance Fee | Up to $30,000. |
| Building Conversion Fee | Up to $5,000. |
| Excessive Site Location Design Fee | $500 per site location after four site locations. |
| Transfer Fee | $10,000 plus the franchisor’s attorneys’ fees; $5,000 plus the franchisor’s attorneys’ fees if the buyer is an existing franchisee. |
| Renewal | $30,000 |
| Insurance | Will vary under the circumstances. |
| Audit | Cost of inspection or audit. |
| Interest | Lesser of 1.5% per month or highest contract rate of interest allowed by law. |
| Management Fee | To be determined under circumstances. |
| Gift Card Fees | Currently $.20 cents per redeemed transaction. |
| Indemnification | Will vary under the circumstances. |
| Costs and Attorney’s Fees | Will vary under the circumstances. |
| Supplier Payments | Will vary under the circumstances. |
| Testing | Cost of testing. |
| Relocation Expenses | Costs of relocation. |
| Technology Fee | Estimated $200 per month. |
| Development Schedule Extension Fee | $5,000 per restaurant for an extension of up to 6 months. |
| Development Agreement Termination Fee | $10,000 for each restaurant to be developed under the franchisee’s development schedule for which they have not signed a Franchise Agreement or paid an initial franchise fee. |
| Territory Reservation Extension Fee | $10,000 |
For more framchising opportunities, check out our other articles on FranchiseHow!