FDD Talk: The Teriyaki Madness Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

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

• Section I – Background information on the Teriyaki Madness franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Teriyaki Madness franchise, based on Item 7 of the company’s 2015 FDD

• Section III – Presentation and analysis of Teriyaki Madness’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:

• 2014, 2013, 2012, 2011, 2010, 2009, and 2008 average, high, and low gross sales for the Teriyaki Madness Businesses that have been in operation for at least 1 year and that were larger than 1,300 square feet (which match the footprint required of new units)

• 2014 total revenues, cost of goods sold, labor costs, gross profit, operating expenses, and operating profit for Teriyaki Madness’s two Affiliate Locations (Maryland Parkway and West Lake Mead locations, both in Las Vegas, Nevada) from January 1, 2014 to December 31, 2014

Section I – Background Information

In 2003, Rod Arreola, Alan Arreola, and Eric Garma wanted to take their Seattle secret (lots of teriyaki houses) to the nation. Leaving behind the rainy weather of Seattle, the trio headed for sunshine and good times in one of the nation’s foodie hot-spots – Las Vegas.

Modeled on their favorites from Seattle, they aimed for people and families with busy lifestyles who wanted a fresh and unique, quick-casual concept with not only great tasting food, but healthy as well.

The first restaurant opened with lines stretching around the block as word spread quickly about how the food was delicious, plentiful, healthy, and full of bold flavors. By 2005, they had perfected their approach and were ready to franchise.

They started off slowly with a small group of hand-picked franchisees to open more locations around Las Vegas to make sure they knew what they were doing, perfecting both the product and the model.

As a brand spanking new chain restaurant, here’s how the fresh Asian grill at Teriyaki Madness is making a splash in the QSR segment:

Poised for Growth

When the company decided to start franchising in 2005, there were only four locations. They expanded that number to seven with carefully selected franchisees, and kept it right there from 2007-2013 to make sure they were getting it right. In 2014, they doubled the number of locations and are now ready to lead the charge and grow rapidly.

Unit Success

It’s not easy to make it in the restaurant segment. Overhead is high, and margins tend to be slim. Dean Clarino didn’t let these challenges stop him when he became a franchisee for the chain in 2007. But he also went beyond the chain’s recommendations and spent lots of extra money on advertising and free meals to local businesses. His success led him to open another location where he did the same – and made back his investment in just four months. That’s unheard of in the restaurant franchising world!

Enticing Diners

With made-to-order entrees featuring signature sauces, fresh vegetables, and 100% real ingredients, the fresh Asian grill chain serves protein-packed portions.

Enticing Franchisees

The Teriyaki Madness concept is catching other franchisees’ attention, and is powerful enough to make some veterans want to come on board, such as Chiu and Pilar Ng, veteran restaurateurs who have most recently been operating 16 Subway locations for the past twelve years.

It was the quality of the food that initially sold them on Teriyaki Madness. The concept and great people at the company sealed the deal for them.

The hardest part for them was finding financing, since many banks are wary of backing what they see as an unproven concept. Luckily, their location has more than doubled their original projections.

QSR Magazine has named the chain one of the best upstart opportunities available for two years in a row.

Section II – Estimated Costs

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

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