In this FDD Talk 2017 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 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Teriyaki Madness franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Teriyaki Madness’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2012 to 2016 average, high, and low annual sales; same stores sales increase; number and percentage of franchisees at or above the average unit volume; and number and percentage of franchisees at or above the average same store sales increase of Teriyaki Madness restaurants that have been in operation for at least 2 years, that were larger than 1,200 square feet (which match the footprint required of new Teriyaki Shops), and that have had no change of ownership
- 2016 total sales, cost of goods sold, gross profit, payroll and labor, occupancy, direct operating expenses, operating income, non-operating expenses, and net income for 9 of the 10 Teriyaki Madness restaurants that have been in operation for at least 2 years, that were larger than 1,200 square feet, and that have had no change of ownership
Section I – Background Information
11 Things You Need to Know About the Teriyaki Madness Franchise
M.H. Enterprises Buys Out Founders of Teriyaki Madness
1. In early January, Franchise Times released its 2017 Top 10 Dealmakers list, where Teriyaki Madness earned a spot after Michael Haith, owner of M.H. Enterprises, bought Teriyaki Madness from its founders after selling Maui Wowi in a 1031 asset exchange.
2. Kevin Hein, Haith’s long-time attorney, came up with the idea to use the 1031 asset exchange to purchase Teriyaki Madness. The asset exchange is a section of the IRS tax code that allows investors to buy and sell similar types of assets and defer taxes, as long as it’s done in 180 days.
3. Haith, who was part of the consulting firm, Franchise Sherpas, was brought on as an investor in Teriyaki Madness by the company’s three founders in 2012. Haith says that he wanted to buy the company in order to start a larger franchise program.
4. According to Haith, the transaction was difficult and emotional for the three founders, but he feels that they were relieved in the end. The three founders are now franchisees who own the original seven shops in and around Las Vegas.
5. At the same time of the transaction, Haith bought out his colleagues in Franchise Sherpas, shuttered the firm, and now operates through M.H. Enterprises. Haith says he feels that Teriyaki Madness is “going to be a big one” and is now using all his energy to make sure the franchise grows successfully.
Beating Panda Express at Offering Customers the “Chork”
7. Last August, Teriyaki Madness’s competitor Panda Express, unveiled the limited-time offer General Tso’s Chicken served with a red plastic chork, a hybrid utensil that is part fork, part chopsticks. Although Panda Express did not roll out the chork nationwide, it was available at a press event for the launch and subsequently garnered social media attention.
8. Teriyaki Madness joined the viral bandwagon by letting everyone know that they have been offering customers chorks for years and that the franchise even won first place for the chork from QSRMagazine-Foodservice Packaging Institute’s Foodservice Packaging Awards.
Company History
9. The first Teriyaki Madness was opened in 2003 by brothers Alan and Rod Arreola, and their cousin Eric Gamma, in Las Vegas, Nevada. The trio wanted to bring Seattle-style teriyaki rice bowls to another part of the United States. The founders also wanted to offer a healthier alternative to fast food and give customers a bit more choice in customizing their food.
10. Teriyaki Madness began franchising in 2005 and continued to open locations in the Las Vegas area. The year 2013 marked the first time that the franchise opened a location in another state. Today, there are over 40 Teriyaki Madness restaurants in the U.S. with plans to open in new markets over the next few years.
Entrepreneur’s Franchise 500
11. Teriyaki Madness debuted on Entrepreneur’s annual Franchise 500 list this year at No. 330. Although the company has been franchising for over a decade, growth had remained moderate until recently.
Section II – Estimated Costs
- Please click here for detailed estimates of Teriyaki Madness 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 Teriyaki Madness’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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