Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk Daily: Annual Net Sales of Company-Owned Schlotzsky’s Restaurants

by Franchise Chatter on May 7, 2013

in Franchise Earnings, Sub Sandwich Franchise

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Highlights of Schlotzsky’s Item 19 Financial Performance Representations (2012 FDD) – Part 1

  • Schlotzsky’s restaurants are bakery-cafe, quick casual restaurants featuring premium sandwiches, pizzas, soups, salads, and complementary food and beverages.
  • As a condition of granting you a Schlotzsky’s franchise, the franchisor may also typically require you to purchase a Cinnabon Express franchise and/or Carvel Express franchise to operate inside the Schlotzsky’s restaurant, except in rare instances relating to non-traditional locations.
  • Schlotzsky's Restaurant InteriorsThe total investment necessary to begin operation of a Schlotzsky’s franchised business with a Cinnabon Express franchise and a Carvel Express franchise inside it ranges from $182,098 to $773,141.
  • The total investment estimate includes $45,000 in fees, comprised of $30,000 paid to the franchisor, a $7,500 initial franchise fee that must be paid to Cinnabon, Inc. in connection with the Cinnabon Express franchise and a $7,500 initial franchise fee that must be paid to Carvel Corporation in connection with the Carvel Express franchise.
  • If you enter into a Territory Agreement, your investment to begin operation of your initial Schlotzsky’s franchised business will be as described above and you and the franchisor will agree upon a territory fee that must be paid to the franchisor.
  • The territory fee will be an amount that you and the franchisor will negotiate based on your business experience, your financial ability to develop restaurants, the size of your designated territory, the market demand for developing in your designated territory, your experience with the franchise system or restaurants similar to Schlotzsky’s restaurants, the number of restaurants you commit to developing, the timeframe you propose for developing restaurants, and any other factors you raise to support your ability to develop restaurants.
  • The following tables present information about the annual sales, during the company’s fiscal year ended December 25, 2011, of Schlotzsky’s restaurants that were open throughout this entire period.

Annual Net Sales for Company-Owned Restaurants

  • The table below presents Net Sales for Restaurants that the parent company owns and operates and does not reflect the operation of franchised Restaurants.
  • “Net Sales” has the same meaning as shown in Item 6 that is used for purposes of calculating royalties due under the Franchise Agreement.
  • As a multi-unit operator, the parent company may have a number of advantages that an individual franchisee may not have, such as increased financial resources; greater experience with real estate, operations, and staffing; increased buying power, etc.
  • In addition, many of the parent’s Restaurants are mature Restaurants that operate in established markets, including the founding market of Austin, Texas.
  • The franchisor does not represent that any franchisee can expect to attain these sales results. Actual results vary from Restaurant to Restaurant and the franchisor cannot estimate the results of any specific Restaurant.
  • A new franchisee’s sales results are likely to be lower than the results shown below.

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