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 2018 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 2018 FDD
- Section IV – Number of franchised and company-owned Teriyaki Madness outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Teriyaki Madness’ financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2014 to 2017 average, median, high, and low gross sales for the Teriyaki Madness restaurants that have been in operation for at least 2 years, were larger than 1,350 square feet (which match the footprint required of new Teriyaki Shops), were in traditional locations, and have had no change of ownership within the two year period described
- 2017 total sales, cost of goods sold, gross profit, payroll and labor, occupancy, direct operating expenses, and operating income for the 10 Teriyaki Madness restaurants that have been open for a minimum of 24 months, are larger than 1,350 square feet, have not changed ownership in the last two years, and responded to the franchisor’s survey to collect income statement data for the 2017 fiscal year
Section I – Background Information
16 Things You Need to Know About the Teriyaki Madness Franchise
Significant Growth During First Half of 2018
1. Around the start of June 2018, Teriyaki Madness announced that the brand has experienced rapid growth in the year so far. With increasing consumer demand for high-quality ingredients, healthier meals, and flavorful choices, the brand has seen an influx of new franchise owners, entered an assortment of new markets, and experienced a rise in foot traffic.
2. Teriyaki Madness’ sustained growth has landed the franchise on Fast Casual’s Top 100 Movers & Shakers list at No. 37. The list measures company growth and sales, innovative technology use, customer experience, and company risk taking, each of which has been a focus for Teriyaki Madness in Q2.
3. The brand has signed 12 new franchise agreements since the start of the year and will enter new markets such as Tampa, Reno, Philadelphia, and Bend. Teriyaki Madness says that the two main factors behind the brand’s continued growth are the product it provides and “leadership that welcomes change with open arms.”
4. Michael Haith, CEO of Teriyaki Madness, said, “We have proven the ongoing marketplace demand for what Teriyaki Madness offers. Openings this last quarter have been met with increasingly higher foot-traffic, and we recently had our highest-grossing grand opening to date. We are continuing to embrace consumer demands and are excited for what’s to come in the second half of 2018.”
5. In addition to offering fast-casual Asian food that meets current consumer demands, the executive team at Teriyaki Madness has placed a high priority on always adapting the business plan to best suit today’s customer. Most recently, the restaurant piloted a mobile ordering app at a handful of shops nationwide to better accommodate today’s tech-savvy customers. The mobile ordering app is expected to launch at all shops in July.
6. The app’s features include ordering ahead for pickup or delivery (in applicable markets); saving of favorite orders so reordering can be done within three clicks; map and location information; details on new products, offers, and promotions; a customer referral program; information about jobs and franchises; and more.
Plans to Open First International Location in Mexico
7. At the beginning of May 2018, Teriyaki Madness announced that it had signed its first international franchise deal for a new restaurant in San Luis Potosi, Mexico to open later this year. The new location marks the brand’s first steps toward larger international expansion. Teriyaki Madness plans to open up to 100 more locations in Mexico over the next 10 years.
8. Patricio Meade and Guillermo Alcocer – owners of Star San Luis, a multi-unit franchise owner of Carl’s Jr. in Mexico for more than 15 years – will lead the Teriyaki Madness expansion in Mexico. Meade and Alcocer will be opening the first location in their hometown of San Luis Potosi and will open several more locations throughout the country over the next five to ten years.
9. Michael Haith, CEO of Teriyaki Madness, said, “Since we have few supply chain restraints and can deliver great quality food anywhere, we focus on partners more than timing and geography when considering growth. When Patricio and Guillermo approached us with interest to open a franchise in Mexico, we looked to their experience and success in the market and immediately recognized their potential as Teriyaki Madness partners. With their expertise and the growing demand for Asian cuisine, as consumers in Mexico begin to focus on healthier foods and new flavors, we know that Teriyaki Madness will be a success in Mexico.”
New Summer Menu
10. Although Teriyaki Madness has been in business for nearly two decades, the brand has always stuck to its core menu until very recently. Earlier in 2018, the brand released its first limited-time menu item, the Spicy Chicken Power Bowl. Teriyaki Madness launched its second new item, Sesame Asian Yakisoba Salad, to kick off the summer season. The Yakisoba Salad was launched on June 6 and will stay on the menu until September.
11. The Sesame Asian Yakisoba Salad features fresh ginger, garlic, sesame, and soy and is packed with yakisoba noodles; marinated, grilled teriyaki chicken; and fresh chopped vegetables including broccoli, zucchini, cabbage, and carrots, all perfectly tossed and chilled for summer.
12. According to Michael Haith, CEO of Teriyaki Madness, “Summer is the perfect time to try new things and test your limits, and that’s what we are doing with the Sesame Asian Yakisoba Salad. We are not afraid to challenge the definition of salad and take away the lettuce. As our promotion says, ‘if it’s chilled and in a bowl, it’s a salad.’ This salad is fun and different, and we are confident it will be a hit among our customers as it has all the elements that they already know and love.”
13. Teriyaki Madness was founded in 2003 by Alan Arreola, Rod Arreola, and Eric Garma in Las Vegas, Nevada. The business partners were originally from Seattle and wanted to take one of that city’s most beloved foods, the teriyaki bowl, to another city. They also wanted to offer a healthier alternative to traditional fast food and give customers the opportunity to customize their food.
14. The success of the first Teriyaki Madness shop led to more locations. Franchising started in 2005 and for the next few years, Teriyaki Madness only opened locations in Nevada.
15. Around 2012, Michael Haith – a seasoned franchisor – helped the Teriyaki Madness founders grow the chain; the first shop outside of Nevada opened the following year. In 2017, Haith bought Teriyaki Madness from the original owners and announced his plans to accelerate the franchise’s national growth.
Entrepreneur’s Franchise 500
16. Teriyaki Madness ranked No. 491 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Teriyaki Madness franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Teriyaki Madness’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 13
- Outlets at the End of the Year: 21
- Net Change: +8
- Outlets at the Start of the Year: 21
- Outlets at the End of the Year: 33
- Net Change: +12
- Outlets at the Start of the Year: 33
- Outlets at the End of the Year: 41
- Net Change: +8
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 3
- Net Change: +1
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 2
- Net Change: -1
- Outlets at the Start of the Year 2
- Outlets at the End of the Year: 1
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
Part 1 – Average, Median, High, and Low Gross Sales
- The information in the table below contains Gross Sales information as collected and reported through the POS system, and is a historical financial performance representation for the Teriyaki Shops that have met the following criteria: (a) been in operation for at least two years; (b) that were larger than 1,350 square feet (which match the footprint required of new Teriyaki Shops); (c) that were in traditional locations; and (d) that have had no change of ownership within the two year period described (“Conditions”).