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FDD Talk 2015: The Beef Jerky Outlet Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on August 31, 2015

in FDD Talk 2017: Food Franchises, FDD Talk 2017: Retail Franchises, Franchise Earnings, Retail Franchise

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The Beef Jerky Outlet

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Beef Jerky Outlet franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Beef Jerky Outlet franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Beef Jerky Outlet’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average gross sales, gross cost, gross profit, and gross margin for 5 Beef Jerky Outlet stores owned and operated by the franchisor’s affiliates for at least 1 year
  • 2014 average gross sales for 9 Beef Jerky Outlet stores owned and operated by franchisees for at least 1 year

Section I – Background Information

At Beef Jerky Outlet’s first-ever franchisee conference organized by headquarters in April 2015, the prognosis was promising.

At the Atlanta gathering, president Paul Lyons and COO Scott Parker noted that new BJO locations are opening every month, and the company has experienced growth of 1,000% in new store openings during the previous twelve months. Granted, this is a concept that’s just now beginning to take off, as there are only 38 locations right now, but more than 50 are on track to open soon.

Although the company was founded in 1995, it didn’t start franchising until 2010.

Company leadership also introduced the first members of its brand new board of directors. The three inaugural members announced at the conference will be boosted next year with an additional three members to be voted in by the franchisees themselves. And the next year will see three more members added.

The company’s recent rapid growth has vaulted it onto Entrepreneur Magazine’s Franchise 500 list (#494), and it ranks #22 on Entrepreneur’s list of top 75 new franchises.

Here’s how Beef Jerky Outlet keeps customers munching away on little sticks of dried-out meat:

A Unique Sales Proposition

Besides the fact that Beef Jerky Outlet supplies products made in small batches as opposed to mass-market production that tends to compromise quality, patrons who enter the chain’s locations are in for a real treat with its Try Before You Buy approach. Customers are free to sample the goods in order to find the flavor that’s going to work best for them.

The results come in the form of higher average sales per transaction, not to mention higher customer satisfaction.

Growing Demand

Beef Jerky Outlet franchisees enjoy the benefits of a niche market that doesn’t have much in the way of franchise competition. Rapid turnover of inventory means there’s no need for costly warehouse storage.

As noted earlier this year in The Washington Post, “The market for jerky has ballooned into a nearly $1.5 billion industry in the United States. Sales are up by 13 percent since 2013, and by 46 percent since 2009, according to data from market research firm IRI.” (source)

Careful Franchisee Selection

At least part of BJO’s success can be attributed to its qualification process. The franchisor goes to great lengths to match franchisees up with the right location. The company’s franchise development team leader, Dr. Michael Riddiough, notes that in more than 4 years of franchising, there have been zero terminations.

In Business FOR Yourself, not BY Yourself

Beef Jerky Outlet has not only created a superior line of jerky products, the chain has also established a method that includes adequate system support for franchisees to get the answers they need to be successful. Training is hands-on in one of its busy stores for both the owner and a key employee.

New franchisees also benefit from the placement of a knowledgeable employee to help a new location gear up for its grand opening.

Section II – Estimated Costs

  • Please click here for detailed estimates of Beef Jerky Outlet franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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