In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Beef ‘O’ Brady’s franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Beef ‘O’ Brady’s franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Beef ‘O’ Brady’s franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Beef ‘O’ Brady’s outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Beef ‘O’ Brady’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018, 2017, and 2016 average, median, highest, and lowest adjusted gross sales for the franchised and company-owned Beef ‘O’ Brady’s Family Sports Pubs that were open and operating for at least 18 months before December 31 of each year
- 2018, 2017, and 2016 average, median, highest, and lowest adjusted gross sales for the top quartile and bottom quartile of the franchised and company-owned Beef ‘O’ Brady’s Family Sports Pubs that were open and operating for at least 18 months before December 31 of each year
Section I – Background Information
20 Things You Need to Know About the Beef ‘O’ Brady’s Franchise
Enters 2019 with Positive Sales Momentum and Major Growth Potential
1. At the end of January 2019, Beef ‘O’ Brady’s reported that it had seen significant positive sales growth, wrapping up December 2018 with 3.7 percent positive sales comps. Corporate stores also had a strong year, closing December up by 7.6 percent for the month and 5.8 percent for the year overall. System check costs averaged at a 1.9 percent increase over 2017, but traffic average also increased by 1.2 percent – a statistic indicating unique momentum in an industry seeing negative traffic overall.
2. For seven of the last eight years, the family-friendly sports pub chain has enjoyed positive sales growth, and the brand enters 2019 positioned for even more. According to the press release, Beef ‘O’ Brady’s has been driving sales growth through various programs focused on the positive experience of the brand’s customers.
3. In 2018, Beef ‘O’ Brady’s launched a value platform that includes daily specials, a “2 for $20” promotion that lets customers order one starter and two entrees for $20, plus coupon drops. A loyalty program also launched last year, and customers saw even more variety and convenience come from the brand with the addition of a chargrill menu and delivery options.
4. Finally, remodels designed to enhance the openness of the space and improve unit atmosphere took place at several Beef ‘O’ Brady’s locations, with impressive results. Emblematic of the benefits of remodeling, the newly-remodeled Fish Hawk, Florida location closed the year up 43% in sales.
5. With sales volume serving as a critical indicator of a franchise’s success, Beef ‘O’ Brady’s has proven year-over-year that its model is strong and only getting stronger: the brand’s average unit volume (AUV) for 2018 was $1.22 million and has grown $370,000 since the recession. Leading competitors in the casual dining segment, Beef ‘O’ Brady’s has set a new AUV record every year, driven by impressive performances from its franchisees.
6. According to Beef ‘O’ Brady’s CEO Chris Elliott, “Simply put, it was a good year because we had 3.1 percent comp sales growth, which was made up of 1.9 points of check growth and 1.2 points traffic growth. We had positive traffic and that’s a good sign in casual dining. That’s the seventh year out of the last eight that we had positive comps, and our AUV’s hit a new record this past year. We’re really excited about these two statistics – these are extremely important in the retail industry.”
7. Elliot also attributed sales growth to the brand’s remodeling initiatives, promotional calendar, enhanced menu, and the introduction of third-party delivery.
Announces Florida Expansion and Return to Jacksonville Area
8. In late February 2019, following a slight brand refresh, Beef ‘O’ Brady’s announced that it was working on adding another 14 restaurants to its Florida portfolio. The family-oriented sports pub has a remodeled restaurant design, updated menu, and 105 locations in the state (at the time of the announcement). One of the areas that Beef ‘O’ Brady’s is returning to is Jacksonville.
9. Jamie Cecil, vice president of development for Beef ‘O’ Brady’s, said that the restaurant chain was attracted by the strength of family communities in Jacksonville. Cecil added, “We do well where we can really get in and entrench ourselves in a community that has a strong sense of family. Some of the biggest metro areas don’t necessarily work because the sense of community is not there. We recognized that from past Beef ‘O’ Brady’s, and we want to get back there and make Beef’s a prominent name.”
10. Cecil said the new Beef’s is more sophisticated, with updated seating, liquor displays and offerings. There used to only be four or five beers on tap; now there are more than 20. The menu is more well-rounded with healthier options. But more than anything, the Beef’s value component stands out, he said. Several times a year, the sports pub will run a two for $20 deal, where customers can purchase an appetizer and two entrees for $20.
11. According to Cecil, “Now, it’s truly a sports bar. We’ll have 20 to 25 60-inch-screen TVs in these things. Wherever you are, there’s a TV to watch. And think about it, what size TV do you have in your house? Why would you leave your house to go watch on one that’s smaller?”
12. Beef’s is looking at the Arlington, Southside, and Baymeadows neighborhoods to bring between three and five Beef’s to Jacksonville. Around other parts of Florida, the company is also looking at DeLand, Panama City, St. Augustine, Winter Springs, Deltona, Vero Beach, and more. A typical Beef ‘O’ Brady’s sits at the end cap of a strip center in a 4,000-square-foot location with a patio.
Testing Out Impossible Burger
13. In mid-August 2019, Beef ‘O’ Brady’s became the latest chain to test out the Impossible burger, a plant-based meat alternative. According to one press release, Beef ‘O’ Brady’s added the Impossible burger to menus at only nine restaurants for a couple of weeks.
14. According to Tim Macri, owner and operator of the Beef ‘O’ Brady’s in Bradenton, Florida, “We just felt like it would be a natural add-on to our menu.” Macri said that he wasn’t impressed by previous veggie burgers that were tested, but was wowed by the Impossible burger. Beef ‘O’ Brady’s offers four-ounce patties that are quickly seared and squashed in a bun with lettuce, tomato, onion, pickles, and a smear of mayo.
15. While future plans for the Impossible burger depend on feedback and sales figures, Macri says Beef ‘O’ Brady’s hopes to offer it across all of the chain’s 172 locations early next year. One hiccup could be supply. The introduction of Burger King’s Impossible Whopper around the country has outstripped the availability of the product.
16. Impossible is made from heme, an iron-containing molecule that, according to Impossible researchers, “is what makes meat taste like meat.” The manufacturers make their ground beef substitute by inserting the DNA from soy plant roots into yeast and then fermenting it. The result is a pink-red patty that looks just like the real thing, but with zero cholesterol and a fraction of the greenhouse gas emissions needed to produce ground beef.
17. Beef ‘O’ Brady’s was founded in 1985 by Jim Mellody and his wife Jeanette in Brandon, Florida. Before opening Beef ‘O’ Brady’s, Mellody had tried numerous restaurant ideas before settling on the family-friendly Irish pub theme of Beef ‘O’ Brady’s.
18. Inspired by his love of sports, Mellody filled Beef ‘O’ Brady’s with TVs so customers could watch various sporting events. The walls of the restaurant were also covered with sports memorabilia. Both of these features of the first Beef ‘O’ Brady’s were carried over to every subsequent location.
19. Initially, Beef ‘O’ Brady’s had grown slowly and there were only 40 locations across the United States by 2000. Two years before, Mellody had sold most of his interest in Beef ‘O’ Brady’s to Family Sports Concepts Inc., headed by Chuck Winship, but retained an interest in 13 locations. Following Mellody’s death in 2002, his remaining interest was bought out. Today, Beef ‘O’ Brady’s has locations primarily in the Gulf/Southern Coast of the United States.
Entrepreneur’s Franchise 500
20. Beef ‘O’ Brady’s ranked No. 416 on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Beef ‘O’ Brady’s franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Beef ‘O’ Brady’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 186
- Outlets at the End of the Year: 170
- Net Change: -16
- Outlets at the Start of the Year: 170
- Outlets at the End of the Year: 156
- Net Change: -14
- Outlets at the Start of the Year: 156
- Outlets at the End of the Year: 139
- Net Change: -17
- Outlets at the Start of the Year: 10
- Outlets at the End of the Year: 14
- Net Change: +4
- Outlets at the Start of the Year: 14
- Outlets at the End of the Year: 15
- Net Change: +1
- Outlets at the Start of the Year: 15
- Outlets at the End of the Year: 18
- Net Change: +3
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
Part 1 – Average Adjusted Gross Sales for Mature Family Sports Pubs
- The tables below contain the historical average Adjusted Gross Sales for company-owned and franchised Family Sports Pubs that were open and operating for at least 18 months before December 31 of each year for which data are shown in the charts (“Mature Family Sports Pubs”).
- That is, the data for 2018 includes Family Sports Pubs open on or before July 1, 2017; the data for 2017 includes Family Sports Pubs open on or before July 1, 2016; and the data for 2016 includes Family Sports Pubs open on or before July 1, 2015.
- This Item 19 does not include any financial information for the one Limited Service Family Sports Pub, as the franchisor is no longer offering franchises for Limited Service Family Sports Pubs.
A. Franchised Mature Family Sports Pubs
- Although there was a total of 157, 171, and 184 Family Sports Pubs operating domestically as of December 31, 2018, 2017, and 2016, there were 135, 152, and 159 franchised Mature Family Sports Pubs in 2018, 2017, and 2016, respectively (“Franchised Mature Family Sports Pubs”).