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The Real Cost of Owning a Johnny Rockets Franchise
The majority of our population loves burgers! So if you’re planning to start a burger franchise, this Johnny Rockets article is the perfect read for you. Let’s go over the details and total breakdown of the classic savory delight.
Johnny Rockets Details
The burger business began in 1986 at Wilbraham, Massachusetts. Since then, the franchising started a year after accumulating over 350 units over the years. Johnny Rockets, LLC or JRL is the name of the franchisor. At Johnny Rockets, the restaurant offers various menu options perfect for lunch and dinners featuring the following options:
- Made-to-order hamburgers
- Crispy fries
- Chili
- Hand-spun shakes
- Malts
- Classic Sandwiches
Meanwhile, some Johnny Rockets restaurants may serve breakfast, beer, wine, and alcohol. Depending on the size and location of a Johnny Rockets restaurant, the menu offered may vary. Also, some restaurant sales branded merchandise such as:
- Clothing
- Souvenirs
- Novelty items
It’s up to the franchisor to set a unique and distinctive business system for its franchisees or other branches.
Training Program
The initial training program for the restaurant lasts up to four weeks. It usually consists of 24 shifts of the following training model:
- Classroom
- On-the-job training
- Self-study modules and application
- Restaurant Management Training Program
Franchisors require franchisees or principal personnel to attend the training program along with a manager or assistant manager. It’s up to the franchisor to decide the training’s location and duration based on the trainee’s skills. Furthermore, the franchisor will offer additional support on or after the soft opening of the restaurant. The assistance will consist of at least three operational representatives to help guide the franchisee five days before and after the grand opening. As part of the ongoing training, the franchisor has the discretion to hold a Franchise Conference annually and Webinars as deemed necessary.
Territory Agreement
After being granted the license to operate Johnny Rockets, the franchisors will provide a protected territory as per the Franchise Agreement (FA). During the agreed terms, JRL will not open a restaurant or allow any other franchisees, including its affiliates, to open a new Johnny Rocket restaurant within a one-mile radius from the front door of your restaurant.
Also, the license granted to franchisees as per the FA is non-exclusive. Franchisees must be aware that they may still face competition with the following:
- Other franchisees
- Outlets the franchisor owns
- Other channels of distribution
- Other competitive brands
Expectations from the Franchisee
- Franchisees must be personally involved with the operation of the restaurant on a full-time basis.
- It’s allowed to delegate day-to-day responsibilities to a manager.
- Franchisees and at least three management personnel are required to complete initial training.
- During the Restaurant FA, franchisees should spend a minimum of 40 hours per week supervising the overall operation.
- Franchisees must devote 8 hours worth of physical presence per week during operating hours.
- A sufficient number of assistant managers should be designated to assure managers are supervising the restaurant’s operation.
- The franchisor must approve all items, products, or menus sold within the establishment.
- Franchisees must cooperate with the franchisor during test marketing programs.
Terms of Agreement
The initial length of the franchising term for Johnny Rockets is ten years. Franchisees have the right to renew the FA for another ten years if the franchisor’s requirements and conditions are met.
Financial Support
Unfortunately, Johnny Rockets, LLC does not offer direct or indirect monetary support to potential franchisees.
Did You Know?
Before diving into the cost breakdown of Johnny Rockets, here are some interesting facts that you should know:
- “Johnny Rocket” is inspired by Johnny Appleseed and Oldsmobile rocket 88.
- Before starting the retro burger diner, the founder, Ronn Teitelbaum, sold designer clothing to men.
- To work as a Johnny Rockets employee, you must enjoy singing and dancing.
- Enthusiasts can enjoy Johnny Rockets in the middle of the sea! Yes, you can eat a Johnny Rockets burger while sailing on a cruise ship.
Johnny Rockets Cost Breakdown
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Architectural Design | $15,000 | $30,000 |
| Leasehold Improvements | $200,000 | $450,000 |
| Furniture, Fixtures and Equipment | $175,000 | $250,000 |
| Interior Decor Package | $3,000 | $15,000 |
| Signs (Interior and Exterior) | $20,000 | $50,000 |
| Information and Technology Systems POS System | $25,000 | $75,000 |
| Smallwares | $12,000 | $20,000 |
| Initial Inventory | $6,000 | $8,000 |
| Real Estate and Security Deposits | $10,000 | $18,000 |
| Insurance and Performance Bonds | $2,000 | $6,000 |
| Music, Jukebox and Sound System | $12,000 | $18,000 |
| Training | $18,000 | $21,000 |
| Pre-Opening Labor | $14,000 | $22,000 |
| Grand Opening | $10,000 | $10,000 |
| Liquor License | $4,000 | $45,000 |
| Miscellaneous (Legal, accounting, licenses, permits, etc.) | $7,000 | $14,000 |
| Additional Funds (Initial Period – 3 months) | $40,000 | $60,000 |
| ESTIMATED TOTAL | $598,000 | $1,137,000 |
Other Fees to Look Out For
| Type of Fee | Amount |
|---|---|
| Weekly Royalty Fee | 5% of Weekly Net Sales. |
| Marketing Fund Fee | Up to 4% of Weekly Gross Sales. The Weekly Marketing Fee is 1.75%, but the franchisor may increase the fee to an amount not to exceed 4.0%. |
| Additional Advertising Contribution | A variable percentage of Net Sales if the owner(s) of at least two-thirds of the participating restaurants in the franchisee’s advertising market agree to pay the additional contribution. If the franchisor operates two-thirds or more of the restaurants in their advertising market, the total Additional Advertising Contributions at any one time cannot exceed 0.50% of Net Sales. |
| Cooperative Advertising | Up to 2.75% of Weekly Net Sales. |
| Local Advertising | 2% of Weekly Net Sales. |
| Renewal Fee | Half of our then-current initial franchise fee ($12,500). |
| Reimbursement of Insurance Costs | Cost of obtaining coverage. |
| Reimbursement of Repair Costs | Cost of repairs. |
| Transfer Fee | $10,000 |
| Audit | All amounts shown to be due, plus interest equal to the lower of the maximum rate permitted by law or 15% per annum of the deficient amount; a late fee, for additional administrative fees incurred by the franchisor, equal to the greater of 10% of the deficient amount or $250; and the cost of the audit. |
| Late Charges | The greater of 10% of the amount due or $250, plus interest at the lower of the maximum rate permitted by law or 15% of the amount past due from the date a payment was due until it is paid. |
| Costs and Attorneys Fees | The franchisor’s costs and expenses. |
| Indemnification | The losses and expenses incurred by the franchisor. |
| Supplier Review Fee | The franchisee must reimburse the franchisor for all costs and expenses incurred by the franchisor in reviewing or approving a supplier proposed by the franchisee, including any travel and lodging expenses it incurs. |
| Taxes | The franchisee must reimburse the franchisor for any state or local taxes imposed on it as a result of the franchisor’s receipt or accrual of the Initial Franchise Fee, Weekly Royalty Fee, Weekly Marketing Fee or other fees it collects under the terms of the FA. |
| Relocation | The franchisor’s costs and expenses, which likely will be between $500 and $5,000. |
| InMoment Fee | $115.38 quarterly. |
| EcoSure Fee | Approximately $330 twice per year. |
Final Note
Now you’re aware of the total costs, responsibilities, and requirements from a Johnny Rockets franchise. Are you still contemplating if a burger franchise is a perfect fit for you? Explore FranchiseHow for more franchise information.