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Zaxby’s Franchise Cost: How Much Does It Take to Become a Zaxby’s Franchisee?
Zaxby’s fast food restaurants have seen their fair share of popularity in recent years, as they offer tasty chicken and even tastier fries (topped with delicious cheese sauce, of course). If you’re thinking about opening your own Zaxby’s franchise, you might be wondering how much money it would take to get started. Keep reading to learn more about Zaxby’s franchise cost and processes.
Franchise Description
Zaxby’s is a fast-casual restaurant chain specializing in chicken fingers, wings, and salads. Founded in Georgia in 1990, the company has grown to over 900 locations across the United States. Zaxby’s offers both traditional and non-traditional franchise opportunities, with the Zaxby’s franchise cost ranging from $351,000 to $718,500. The company has a strong focus on giving back to the community, and all franchisees are required to participate in local fundraising efforts.
Training Overview
The training program for new franchisees is divided into two parts. The first part is classroom-based training, which takes place at the Zaxby’s Support Center in Athens, Georgia. The second part is on-the-job training, which takes place at an existing Zaxby’s restaurant. New franchisees are required to complete both parts of the training program before they can open their own restaurant.
Classroom-based training includes all aspects of operating a successful business, from cooking and customer service to inventory management and employee relations. Training also includes hands-on experience through demonstrations and labs with equipment such as fryers, grills, and deep fryers.
Territory Granted
When you become a Zaxby’s franchisee, you will be granted exclusive rights to operate a restaurant in a specified territory. The size of the territory will be based on factors such as population density and the number of potential customers. Your territory may also be limited by other factors such as proximity to other Zaxby’s restaurants.
Your Territory Agreement is included in your Franchise Agreement. The Territory Agreement defines the scope of your territory, describes how your territory will grow over time and sets forth any conditions that must be met before it can expand. You are required to submit your intended initial location for this information before signing a Franchise Agreement or making an initial payment under that agreement.
Obligations and Restrictions
The first step to becoming a Zaxby’s franchisee is to submit a Letter of Intent, which is followed by an interview with the company. If you are approved as a candidate, you will be required to pay a $35,000 initial fee and sign a multi-unit development agreement. In order to open your first restaurant, you will need to have at least $1 million in liquid assets and a net worth of at least $2.5 million. You’ll see below the Zaxby’s franchise cost to know why you need that much money.
You’ll also need to provide proof that you can secure financing for between $500,000 and $3 million (depending on the location). Additional fees may apply if there are any changes made to the proposed site.
Terms of Agreement and Renewal
The term of the Agreement is 10 years, with an option to renew for two additional 5-year terms. The initial franchise fee is $30,000, with an ongoing royalty fee of 6%. There is also a marketing fund contribution of 2% of gross sales. Initial start-up costs will vary depending on the size and location of the restaurant, but generally range from $1.1 million to $2.4 million.
Did You Know?
Below are a few facts that you probably didn’t know about Jimmy John’s:
- Zaxby’s was founded in 1990 in Statesboro, Georgia
- The chain has over 900 locations in the southeastern United States
- Zaxby’s is known for its chicken fingers, wings, and salads
- In 2001, Zaxby’s was ranked #37 on Entrepreneur magazine’s Fastest Growing Franchises list
Zaxby’s Franchise Cost
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $35,000 | $35,000 |
| Lease Deposit and Payment | $10,000 | $19,000 |
| Utility Deposits | $0 | $9,000 |
| Initial Inventory | $5,000 | $20,000 |
| Furniture, Fixtures & Equipment | $214,000 | $313,000 |
| Technology System | $30,500 | $33,500 |
| Signage | $25,000 | $50,000 |
| Initial Marketing Contribution | $5,200 | $10,000 |
| Insurance | $1,000 | $17,000 |
| Permits and Licenses | $2,000 | $24,000 |
| Accounting and Legal Fees | $500 | $25,000 |
| Printing/Business Supplies | $300 | $1,000 |
| Uniforms | $1,500 | $4,000 |
| Training Expenses | $10,000 | $25,000 |
| Pre-Opening Payroll | $10,000 | $37,000 |
| Additional Funds (3 months) | $1,000 | $96,000 |
| ESTIMATED TOTAL | $351,000 | $718,500 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty | 6% of gross sales per week. |
| National Marketing Contribution | 1.37% of gross sales per week (may be increased or decreased by the franchisor within a range between 0.75% and 1.5% of gross sales, in the franchisor’s discretion). |
| Co-op Marketing Contribution or Multi-DMA Advertising Contribution | 1.5% to 3.5% of gross sales per week (as determined by co-op, the franchisor or its designated affiliate). |
| Extension Fee | $1,000 for each month (or portion of a month) that a deadline is extended. |
| Accounting Services Fee | (i) $650 per month for bookkeeping services and payroll processing services, (ii) $475 per month for either bookkeeping services only or payroll processing services only, (iii) $225 per month for accounts payable services (only available if franchisees also pay for bookkeeping services), and/or (iv) $15 annually per employee for Affordable Care Act reporting. |
| Supplier Approval | The franchisor’s reasonable cost of the inspection and its actual cost of testing, including personnel and travel costs. |
| Initial Training for Replacement Managers | The then-current fee. Currently, $2,500 per person. |
| On-Site Additional or Remedial Training of Consulting Services | Actual travel and living expenses of the franchisor’s employees or agents. |
| Franchised Managed Training Program Fee | $500 to $1,500 per restaurant annually. |
| Conference Fee | Reasonable registration fee, which will vary by event. |
| Transfer Fee (License Agreement) | 50% of then-current initial franchise fee. |
| Transfer Fee (Development Agreement) | $7,500 |
| Late Fees and Interest Charge on Late Payments | $100 per week for late royalty and $25 per week for marketing-related fees, plus 18% per annum (or highest rate allowed by law). |
| Audit Fee | Cost of audit. |
| Indemnification/Attorney Fees and Costs/Damages | Amount of the franchisor’s liabilities, fines, losses, damages, costs and expenses (including reasonable attorneys’ fees). |
| Inspection Fee | Actual costs and expenses, but no less than $500 per additional inspection. |
| Document Fee | The franchisor’s actual costs and expenses (including cost of personnel and attorneys’ fees and expenses). |
| Renewal Fee | 50% of then-current initial franchise fee. |
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