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FDD Talk 2017: What You Need to Know About the Culver’s Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on May 9, 2017

in FDD Talk 2017: Food Franchises, Franchise Earnings, Frozen Dessert Franchise, Hamburger Franchise

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In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Culver’s franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Culver’s franchise, based on Item 7 of the company’s 2017 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Culver’s franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Culver’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2016 average, median, high, and low gross sales for the 555 franchised and company-owned Culver’s Restaurants open for the entire 12-month period ended December 31, 2016
  • 2016 average food cost, paper cost, salaries and wages, employee benefits, direct operating expenses, supplies and chemicals, utilities, general and administrative expenses, repairs and maintenance, advertising royalty, local advertising, and service royalty, as a percentage of gross sales, for the 7 company-owned Culver’s Restaurants operated by subsidiaries of Culver Franchising System, Inc. (“CFSI”), open for the entire 12-month period ended December 31, 2016

Section I – Background Information

10 Things You Need to Know About the Culver’s Franchise

Portrait of a Hero Contest

1.  Culver’s is currently running a contest called Portrait of a Hero. To enter the contest, customers must submit information about their hero and write a brief essay about why that person is inspirational. The contest started on April 17 and will run until May 12. Customers will then vote for the winner from May 22 through May 26. The winning hero will win a $500 gift card to Culver’s and a $500 donation to the charity of their choice.

Raised Over $360,000 for Agricultural Organizations in 2016

2.  In early January, Culver’s announced that it had raised over $360,000 in 2016 through its Thank You Farmers program. The money raised through the program goes toward supporting the National Future Farmers of America (FFA) Organization, local FFA chapters, and a variety of other agricultural organizations. Culver’s has raised over $1 million for the Thank You Farmers program since its inception in 2013.

3.  Included in the money Culver’s raised last year was over $31,000 for the Blue Jacket program where Culver’s sponsors the cost of buying FFA jackets for members who are unable to purchase the special attire. After the passing of Culver’s President and CEO Phil Keiser in October 2016, the company donated $25,000 in his name for an FFA endowment scholarship.

Supporting the National FFA Organization

4.  During National FFA Week in late February, Culver’s held its third annual FFA Essay Contest to award three winners with the funds to send their FFA chapters to the National FFA Convention and Expo in Indianapolis, which will be held in late October.

5.  The contest asked FFA members to submit an essay answering the following questions:  As a future ag leader, what do you want people to know about the agricultural industry? How will you help to educate them on this subject? The top three entrants were awarded $7,500, $5,000, and $2,500 respectively.

6.  In addition to holding the essay contest, Culver’s also sponsored FFA Day at the National Cattleman’s Beef Association (NCBA) Trade Show in early February. The company covered the cost of registration fees for the first 250 FFA members who used a promotion code to register for the trade show. According to Jessie Corning, senior marketing manager for Culver’s, the company was excited to help more FFA members attend the trade show so they could learn more about agriculture and network with industry veterans.

Named One of America’s Favorite Burger Chains

7.  Culver’s was ranked as the second favorite burger chain in America on Restaurant Business’s annual list of America’s Favorite Chains. The top spot went to In-N-Out. The list used data from Technomic to find the chains with the best reputation when it comes to areas including service, ambience, convenience, quality, and value.

Company History

8.  The first Culver’s was opened in 1984 by Craig and Lea Culver, along with Craig’s parents George and Ruth, in the family’s hometown of Sauk City, Wisconsin. Craig Culver wanted to open a restaurant that featured his mom’s butter burger and his favorite childhood treat, frozen custard.

9.  Culver’s started franchising in 1990 and continued to expand in the Midwest. Today, there are over 620 Culver’s locations across the U.S.

Entrepreneur’s Franchise 500

10.  Culver’s has ranked on Entrepreneur’s annual Franchise 500 list almost every year in the last decade. The company’s highest rank is this year’s No. 20 spot, while its lowest rank was No. 355 in 2009.

Section II – Estimated Costs

  • Please click here for detailed estimates of Culver’s franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Culver’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

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