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

• Section I – Background information on the Bombshells Restaurant & Bar franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Bombshells Restaurant & Bar 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 Bombshells Restaurant & Bar franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Bombshells Restaurant & Bar 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 Bombshells Restaurant & Bar’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average, median, highest, and lowest gross sales for the 4 affiliate-owned Bombshells Entities restaurants (“Sample Restaurants”) that operated from October 31, 2016 through September 30, 2017 (“Reporting Period”)

• 2017 average food cost, alcohol beverage cost, non-alcohol beverage cost, cost of goods sold, labor, and rent percentages for the 4 affiliate-owned Bombshells Entities restaurants that operated from October 31, 2016 through September 30, 2017

• 2017 royalties, advertising assessment, POS software program fee, and mystery shopper costs for the 4 affiliate-owned Bombshells Entities restaurants that operated from October 31, 2016 through September 30, 2017

Section I – Background Information

11 Things You Need to Know About the Bombshells Restaurant & Bar Franchise

Launches Franchise Marketing Program

1.  In late April 2017, RCI Hospitality Holdings, Inc., which owns Bombshells Restaurant & Bar, formally launched its multi-channel Bombshells franchise marketing program. Some of the company’s new initiatives included:

• Production of a promotional video, which can be viewed on the Bombshells franchise website.
• Development of a marketing brochure, which is also available on the brand’s franchise website.
• Initiation of a direct mail solicitation program aimed at multi-unit restaurant franchise operators in specific markets targeted for growth.
• The launch of an industry-wide advertising campaign through Nation’s Restaurant News and Multi-Unit Franchisee Magazine trade publications and websites.
• An appearance at the 2017 Multi-Unit Franchising Conference in Las Vegas from April 23-26. Interested franchisees were able to schedule a meeting at the show.

2.  Shannon Glaser, vice president of franchising and concept development for the Bombshells brand, said, “Bombshells fills a critical void in the market for the ‘social dining experience.’ As a result, it attracts customers throughout the day and night and generates substantially higher beverage and total sales compared to other casual dining concepts. We are targeting multi-unit restaurant operators because Bombshells are large — 7,500 to 10,000 square feet with an outdoor patio — and multiple units in an area can meaningfully leverage advertising and marketing.”

3.  At the time of the marketing program’s launch, Bombshells said that three company-owned units were in development in Houston. Glaser added that Bombshells’ long-term goal is to open 80-100 locations, with about 70-80% of them franchised.

Debuts Expansion Blueprint

4.  At the beginning of July 2017, Bombshells Restaurant & Bar opened its fifth location and debuted a modified layout that company executives said will be the brand’s expansion blueprint. Eric Langan, president and CEO of RCI, said that this newest location in Houston, Texas will serve as the prototype for the brand’s planned growth across the country.

5.  The new layout is about 8,200 square feet and is based on an aircraft hangar. Travis Reese, RCI executive vice president, who originated the Bombshells concept, said that the brand is “trying to create places for people to take pictures, be it Facebook, Instagram or Snapchat.”

Expands Veterans Day Activities

6.  For Veterans Day 2017 (November 11th), Bombshells Restaurant & Bar expanded its activities to honor both veterans and missing service members. There were several different free and discounted meal specials for veterans, active duty military members, and their families including:

• Free meals for veterans of any branch of the U.S. armed forces;
• 20% discount on meals for their families; and
• 20% discount on meals for active service members.

The brand also made sure to remind customers that veterans and active service members receive
a 20% discount on their meals every day at all Bombshells restaurants.

7.  In addition to the free meals and discounts, each Bombshells location set up a “Missing Man Table.” David Simmons, director of restaurant operations for RCI, said, “The table, which grew out of concern for Vietnam War POW/MIAs, is a place of honor set up in U.S. armed forces dining facilities in memory of fallen, missing, or imprisoned military.”

8.  Veterans were also encouraged to bring a photo — ideally an 8×10 — of themselves in uniform so that each Bombshells restaurant could frame and permanently hang the photo on a “Wall of Honor.” Simmons said that Bombshells’ vision is “to feature photos of local veterans that friends, family, and community can recognize and appreciate every day.”

Company History

9.  The first Bombshells Restaurant & Bar was opened in Dallas, Texas in March 2013 by Rick’s Cabaret International, Inc. (now called RCI Hospitality Holdings, Inc.), a publicly-traded hospitality company that owns over 40 gentlemen’s clubs and restaurant venues in the U.S. Later that year, a second Bombshells opened in Webster, Texas, which is just south of Houston. RCI Hospitality officially launched its Bombshells franchising program in 2015.

10.  Bombshells has a unique military theme and its décor pays homage to all branches of the U.S. military. The brand’s main attraction is its female servers called Bombshell Girls, who wear military-inspired uniforms. There are currently five restaurants open in the Dallas, Houston, and Austin areas with more locations opening soon.

Entrepreneur’s Franchise 500

11.  Bombshells Restaurant & Bar has only been franchising for three years, and has yet to earn a spot on Entrepreneur’s annual Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Bombshells Restaurant & Bar 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 Bombshells Restaurant & Bar’s 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

Franchised

2015

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2016

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2017

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Company-Owned

2015

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  5
• Net Change:  +2

2016

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  4
• Net Change:  -1

2017

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  5
• Net Change:  +1

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

• The average sales and certain cost information for the four affiliate-owned Bombshells Entities restaurants (“Sample Restaurants”) that operated from October 31, 2016 through September 30, 2017 (“Reporting Period”) is provided below.

• Bombshells excluded information for the one Bombshells Entity restaurant that closed during the Reporting Period.

• The Sample Restaurants represent 100% of the Bombshells Restaurants that existed at the end of the Reporting Period.

Part 1 – Sales Information for Sample Restaurants During Reporting Period