FDD Talk: What You Need to Know About the Twin Peaks Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

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

• Section I – Background information on the Twin Peaks franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Twin Peaks 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 Twin Peaks franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Twin Peaks’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average, median, high, and low unit volume for the 40 franchised Twin Peaks Restaurants operating for the full 2016 fiscal year ended December 25, 2016

• 2016 average, median, high, and low unit volume for the 28 company-owned Twin Peaks Restaurants operating for the full 2016 fiscal year ended December 25, 2016

• 2016 cost of goods sold (food cost, bar cost, total), gross profit, rent/common area maintenance/tax, labor cost (hourly staff, manager, payroll taxes/benefits, total), and revenue mix (food/merchandise, bar) for the 28 company-owned Twin Peaks Restaurants operating for the full 2016 fiscal year ended December 25, 2016

Section I – Background Information

11 Things You Need to Know About the Twin Peaks Franchise

Comparable Sales Outperformed Bar/Grill Casual-Dining Segment

1.  In early October 2017, Twin Peaks announced that its comparable sales had outperformed sales data from Black Box Intelligence, a restaurant industry financial performance benchmarking company. Even as casual dining continues to experience sales declines, Twin Peaks reported 14 weeks of positive comps. The brand beat bar/grill casual-dining segment comp sales by over 11% in August and more than 5% year-to-date.

2.  Casual-dining location growth has remained flat over the last few quarters. Going against the trend once again, Twin Peaks has continued to grow. The brand said that it is cranking up expansion in 2018, with several new stores already in the construction pipeline.

3.  Joe Hummel, chief executive officer of Twin Peaks, said, “We consistently generate sales and traffic momentum by staying true to our roots. Year to date we have seen positive sales in 27 out of 34 weeks in comparison to Black Box’s bar and grill casual dining restaurant statistics. We are encouraged by our traffic and we expect to continue driving sales that outperform the sector.”

Plans to Begin Using BeerBoard’s SmartBar Platform

4.  At the end of November 2017, BeerBoard – the integrated beer management and guest display
system that makes restaurants and bars more efficient and profitable – announced that it had signed Twin Peaks-Twin Restaurant Holdings as a client. For now, about 30 Twin Peaks corporate stores will begin using BeerBoard’s SmartBar platform, which will track every ounce of beer poured in real time, allowing Twin Peaks to better manage inventory, cut losses, and make fact-based decisions from actual pour data and industry analytics.

5.  Roger Gondek, COO of Twin Peaks-Twin Restaurant Holdings, said, “Our partnership with BeerBoard has driven significant impact on our operations. Since implementation, we have reduced our Cost of Sales, are selling five or more Twin Peaks ‘Man Size Beers’ per keg and will realize a significant ROI when rolled out across all of our corporately-owned and operated stores. The positive impact has also been felt in the daily operations at each of our Twin Peaks stores.”

6.  Gondek added, “The BeerBoard platform helped us to identify draft system issues which would have gone undetected previously, leading us to replace faulty or defective equipment. Our managers now have a way to hold staff accountable, shift-by-shift, and can employ coaching techniques on properly pouring the perfect beer while creating a more productive culture for all our staff.”

Debuts New Food and Drinks

7.  At the end of February 2018, Twin Peaks debuted a new drink menu, with all 81 Twin Peaks locations now offering an extensive new selection of wine, bourbon, whiskey, and tequila. In addition to the new selections, the brand created several new cocktails and rolled out a new wine program that pairs well with the Hunter’s Meat and Cheese Board. Customers’ favorite draft beers will still be available and served in frosted 22-ounce man-size mugs cooled to 29 degrees.

8.  At the beginning of March, Twin Peaks launched five new food offerings: Southern Fried Chicken Sandwich; Nashville Hot Chicken Sandwich; Loaded Tots; Potato & Egg Tacos; and Chicken and Waffles. The new items are being touted as hearty and made-from-scratch.

Company History

9.  Twin Peaks was founded in 2005 by Randy Dewitt and Scott Gordon in Lewisville, Texas. Dewitt, who had previously helped Brinker International develop Rockfish Seafood, saw a thriving sports-bar market and decided to create a chain with a mountain-lodge motif and attractive servers. The restaurant chain has become known for its Twin Peaks Girls — the brand’s counterpart to Hooters’ scantily-clad female servers.

10.  Twin Peaks started franchising in 2007 and has grown to over 80 locations, primarily located in Texas, the American Southwest, Midwest, and South.

Entrepreneur’s Franchise 500

11.  Since Twin Peaks started franchising in 2007, the franchise has only appeared once on Entrepreneur’s annual Franchise 500 list, at No. 382 in 2016.

Section II – Estimated Costs

• Please click here for detailed estimates of Twin Peaks franchise costs, based on Item 7 of the company’s 2017 FDD.

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

• Please click here for detailed information on Twin Peaks’ 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

Part 1 – Annual Unit Volume of Select Franchised Twin Peaks Restaurants