FDD Talk: World of Beer Bar & Kitchen Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on the World of Beer Bar & Kitchen franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a World of Beer Bar & Kitchen 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 World of Beer Bar & Kitchen franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned World of Beer Bar & Kitchen 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 World of Beer Bar & Kitchen’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average sales of bottled beer; draft beer; spirits; wine; other beverages; food; loyalty, merchandise, and other items; and total sales for the 22 World of Beer Restaurants owned and operated by the franchisor’s affiliates (collectively, the “Company Restaurants”) that were open and operating for at least 12 full months as of December 30, 2018

• 2018 average, median, high, and low total sales for the 29 franchised World of Beer Restaurants, which served the brand’s food menu, that were in operation for at least 12 full months as of December 30, 2018

Section I – Background Information

11 Things You Need to Know About the World of Beer Bar & Kitchen Franchise

Offers Customers a Chance to Win a Trip for Two to Ireland

1.  In late February 2020, World of Beer Bar & Kitchen announced that it was launching its Irish Brewery Challenge in March. To enter the contest, all customers needed to do was to stop by their local World of Beer tavern throughout March and drink the four featured Guinness drafts.

2.  In addition to being automatically entered to win a trip for two to Dublin, Ireland, anyone who completed the Irish Brewery Challenge received a free select shareable (Pesto Hummus, Mac & Cheese Bites, or Beer-Brined Crispy Chicken Sliders). World of Beer Bar & Kitchen said that customers were welcome to enter as many times as they would like to increase their chances of winning.

Giving Back Through Partnerships with Charitable Organizations

3.  To celebrate the 2019 holiday season, World of Beer Bar & Kitchen partnered with two charitable organizations: the National Pediatric Cancer Foundation (NPCF) and Friedreich’s Ataxia Research Alliance (FARA).

4.  From September 1 to November 30, World of Beer donated $1 to NPCF for every Sam Adams Oktoberfest or Winter Lager sold at participating stores.

5.  The NPCF is a nonprofit organization dedicated to funding research to eliminate childhood cancer through the foundation’s collaborative research initiative, the Sunshine Project. By uniting doctors and researchers from the country’s top institutions, the Sunshine Project is fast-tracking the development of less toxic and more targeted treatments with the goal of ultimately curing childhood cancers.

6.  Following that charitable campaign, World of Beer launched another one beginning on December 1, with FARA to help raise funds to find a cure for Friedreich’s Ataxia (FA) and related diseases. The campaign lasted until March 31.

7.  FARA’s mission is to marshal and focus the resources and relationships needed to cure FA by raising funds for research, promoting public awareness, and aligning scientists, patients, clinicians, government agencies, pharmaceutical companies, and other organizations dedicated to curing FA and related diseases.

New Menu Items

8.  In mid-November 2019, World of Beer Bar & Kitchen added several new items to its menu. The new dishes include Spinach Artichoke Dip, Balsamic Brussel Sprouts, Pesto Hummus, Nutella Churro Donuts, Truffle Burger, Jamaican Jerk and Sweet Fire Wings, and Beyond Burgers.

Company History

9.  World of Beer Bar & Kitchen, which was originally called World of Beer, was founded in 2007 by Scott Zepp and Matt LaFon in Tampa, Florida. Zepp and LaFon wanted to offer a different bar experience with craft beers and high-quality bar food. The friends and business partners also wanted World of Beer to be a local gathering place. World of Beer sold a wide array of craft beers, which has now grown to hundreds of different beers on its menu from all over the world.

10.  After a few years, Zepp and LaFon were ready to start franchising. Zepp and LaFon sold their majority stakes in the company to former Outback Steakhouse executives Paul Avery, Ben Novello, and Jim Pollard to help grow World of Beer into a national franchise. Today, there are World of Beer Bar & Kitchen locations in the U.S., China, and South Korea.

Entrepreneur’s Franchise 500

11.  World of Beer Bar & Kitchen did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of World of Beer Bar & Kitchen 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 World of Beer Bar & Kitchen’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

Franchised

2016

• Outlets at the Start of the Year:  61
• Outlets at the End of the Year:  57
• Net Change:  -4

2017

• Outlets at the Start of the Year:  57
• Outlets at the End of the Year:  40
• Net Change:  -17

2018

• Outlets at the Start of the Year:  40
• Outlets at the End of the Year:  40
• Net Change:  0

Company-Owned

2016

• Outlets at the Start of the Year:  17
• Outlets at the End of the Year:  17
• Net Change:  0

2017

• Outlets at the Start of the Year:  17
• Outlets at the End of the Year:  22
• Net Change:  +5

2018

• Outlets at the Start of the Year:  22
• Outlets at the End of the Year:  26
• Net Change:  +4

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

Part 1 – Annual Sales Information for Company Restaurants for 2018

• The following chart shows certain information regarding annual sales of 22 World of Beer Restaurants owned and operated by the franchisor’s affiliates (collectively, the “Company Restaurants”) that were open and operating for at least 12 full months as of December 30, 2018.

• “Sales” means all gross revenue derived from sales of products and services to customers of the Restaurant, but excluding sales, use, or service taxes; customer refunds, adjustments, credits, and allowances.

• The Company Restaurants that meet this criteria are located, and began offering a food menu, as follows:

• Brandon, Florida – began offering a food menu in 2014
• Coconut Creek, Florida – began offering a food menu in 2014
• Orlando, Florida (Downtown) – began offering a food menu in 2014
• Orlando, Florida (Dr. Phillips) – began offering a food menu in 2014
• Pensacola, Florida (Palafox) – began offering a food menu in 2014
• Tampa, Florida (South Tampa) – began offering a food menu in 2014
• Ft. Myers, Florida (Ft. Myers II) – began offering a food menu in 2015
• Destin, Florida – began offering a food menu in 2015
• Fort Worth, Texas – began offering a food menu in 2015
• New Orleans, Louisiana – began offering a food menu in 2015
• Tampa, Florida (Fowler) – began offering a food menu in 2015
• College Station, Texas  – began offering a food menu in 2015
• Fayetteville, North Carolina – began offering a food menu in 2015
• Louisville, Kentucky – began offering a food menu in 2015
• Cambridge, Massachusetts – began offering a food menu in 2015
• Greensboro, North Carolina – began offering a food menu in 2015
• Augusta, Georgia – began offering a food menu in 2016
• Exton, Pennsylvania – began offering a food menu in 2016
• Hilton Head, South Carolina – began offering a food menu in 2016
• Tampa, Florida (International) – began offering a food menu in 2016
• West Hartford, Connecticut – began offering a food menu in 2016
• Albany, New York – began offering a food menu in 2017

• The Company Restaurants receive substantially the same services as those the franchisor offers to new franchisees. However, 21 of these Company Restaurants receive centralized accounting, financial, and management services from the franchisor for a fee.

• The franchisor compiled the yearly sales information from information developed from its point-of-sale system. The sales figures presented below are based on the accrual basis of accounting and may not conform to generally accepted accounting principles. Neither the franchisor nor an independent certified public accountant has independently audited or verified the information. This information may not be representative of the sales of Company Restaurants in any other years.

• Certain fees you pay to the franchisor under the Area Development Agreement and Franchise Agreement and other differences between the expenses of Company Restaurants and franchised Restaurants are not reflected in the charts below. These fees and expenses include, for example, development fees, initial franchise fees, and royalty fees. In addition, interest expense will be incurred if you finance any part of the initial investment.

• All of the franchisor’s affiliates paid advertising contributions during the applicable periods presented below. WOB Palafox, WOB Destin, WOB New Orleans, WOB Louisville, WOB Greensboro, WOB Albany, and WOB Hilton Head did not pay royalties during the applicable periods presented below. WOB Brandon, WOB South Tampa, WOB Ft. Myers II, WOB Forth Worth, WOB Fowler, WOB College Station, WOB Fayetteville, WOB Augusta, WOB International, WOB Coconut Creek, WOB Cambridge, WOB West Hartford, WOB Dr. Phillips, WOB DT Orlando, and WOB Exton did pay royalty fees.

2018 Sales

Palafox Pensacola, FL (Opened July 2012)