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FDD Talk 2015: The Zaxby’s Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on September 15, 2015

in Chicken Franchises, Chicken Wings Franchise, FDD Talk 2017: Food Franchises, Franchise Earnings



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Zaxby's Photo by HeadGEAR56

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

  • Section I – Background information on the Zaxby’s franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Zaxby’s franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Zaxby’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) from operations by quartile for the 494 licensee-owned Zaxby’s restaurants that were open and operating during the entire 52-week period ending on December 28, 2014
  • 2014 average gross revenues by quartile for the 494 licensee-owned Zaxby’s restaurants that were open and operating during the entire 52-week period ending on December 28, 2014
  • 2014 (vs. 2013) comparable same-store sales growth by quartile for the 494 licensee-owned Zaxby’s restaurants that were open and operating during the entire 52-week period ending on December 28, 2014
  • 2014 average check by quartile for the 494 licensee-owned Zaxby’s restaurants that were open and operating during the entire 52-week period ending on December 28, 2014
  • 2014 average daily transaction count by quartile for the 494 licensee-owned Zaxby’s restaurants that were open and operating during the entire 52-week period ending on December 28, 2014
  • 2008 to 2014 average gross revenues for the licensee-owned Zaxby’s restaurants that were open and operating during the entire applicable fiscal year

Section I – Background Information

Zaxby’s is on the move, with strong growth positioning the fast-casual chicken chain for rapid expansion. Based in Athens, Georgia, with locations primarily in the southeastern U.S., Zaxby’s continues to expand both in number and in geographical coverage as it nears the 700-unit mark.

The restaurant chain now has 680 restaurants in 16 states: Alabama, Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah and Virginia.

Prototype Features Farmhouse Design

In January 2015, Zaxby’s reopened a store in Easley, S.C., as a prototype designed to improve food quality and dining experience and lower customers’ wait time.

The restaurant features a farmhouse design with beamed ceilings. Galvanized steel and handmade lamps are incorporated into the design, as well as mixed seating, including farmhouse tables for groups of people. Two drive-thru lanes look to move mobile diners through quickly.

Zaxby’s Rises in Top 100

Zaxby’s rose from No. 45 to No. 42 in Nation’s Restaurant News’ Top 100 for 2015. The list, released in June 2015, is based on U.S. systemwide sales rankings, where Zaxby’s was at $1.3 billion.

The company also ranked No. 9 in growth of total U.S. units, up from No. 32 in 2014. Zaxby’s finished 2014 with 658 restaurants, up from 593 the previous year. The chain opened its 600th location in Washington, North Carolina, located about 20 miles east of Greenville.

Multi-Unit Honors

In August 2014, the chain made it onto the 2014 Multi-Unit 50 at No. 49. The list, by Multi-Unit Franchisee Magazine, ranks the most multi-friendly brands.

Of its total franchisees of 188 at the time, 145 owned multiple units while 43 were single-unit franchisees.

Most Craveable

In February 2014, Zaxby’s was ranked Most Craveable Fast Casual Restaurant for the second year in a row. The 2014 Consumer’s Choice Awards for Chain Restaurants, presented by Technomic, a market research firm that specializes in the restaurant industry, come from responses to a Technomic metrics program that tracks the performance of 120 restaurants on a national basis.

The survey asks consumers to rate restaurants on 60 categories. Zaxby’s was praised by diners for its chicken offerings and its varied dipping sauces.

Childhood Friends Started Chain

Zaxby’s started in 1990, founded by Zach McLeroy and Tony Townley, who had been friends since childhood. McLeroy has been president and CEO of the company since its inception, while Townley is executive vice president. They are stockholders in more than 100 Zaxby’s restaurants.

The chain offers its famous “Chicken Fingerz,” as well as traditional and boneless chicken wings, sandwiches, appetizers and salads, along with nine sauces. In addition to traditional french fries, some of the other sides include pasta salad and fruit bowls.

The “Z” focus doesn’t stop at Chicken Fingerz. You’ll see it in the “Zalads” and “Zappetizers,” and customers can save money with the “Meal Dealz” and feed their children with the “Zax Kidsz” menu items. “Party Platterz” can feed a crowd.

Sweet treats include the Birthday Cake Milkshake, which features cake-batter flavor mixed with colorful sprinkles and chocolate whipped topping.

Section II – Estimated Costs

  • Please click here for detailed estimates of Zaxby’s 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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