FDD Talk 2020: Beef Jerky Outlet 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 Beef Jerky Outlet franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Beef Jerky Outlet franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Beef Jerky Outlet franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Beef Jerky Outlet stores at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Beef Jerky Outlet’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2017, 2018, and 2019 average, highest, and lowest gross product sales; average gross product cost; average gross margin dollars; and average gross margin percentage for the Beef Jerky Outlet stores owned and operated by the franchisor’s affiliates for at least 1 year

• 2017, 2018, and 2019 average, median, highest, and lowest gross product sales for the Beef Jerky Outlet stores owned and operated by franchisees for at least 1 year

• 2017, 2018, and 2019 average, median, highest, and lowest gross product sales for the top third, middle third, and bottom third of the Beef Jerky Outlet stores owned and operated by the franchisor’s affiliates for at least 1 year

• 2017, 2018, and 2019 average, median, highest, and lowest gross product sales for the top third, middle third, and bottom third of the Beef Jerky Outlet stores owned and operated by franchisees for at least 1 year

Section I – Background Information

12 Things You Need to Know About the Beef Jerky Outlet Franchise

Launches Support for Local Frontline Heroes

1.  In early April 2020, amidst the ongoing COVID-19 pandemic, Beef Jerky Outlet announced that its locally-owned stores were supporting local medical workers and other frontline personnel by matching 1 for 1 on every Hero SnackPak donated. Owners will distribute jerky to local hospitals, fire stations, police departments, and other frontline teams.

2.  Paul Lyons, president of Beef Jerky Outlet, said, “We have the opportunity to do something special, to really make a difference. We are providing a way for people to make an impact in their local communities during these unprecedented times.”

3.  Local Beef Jerky Outlet owners across the nation are urging their communities to join BJO in supporting their local frontline heroes. There are five easy steps to participate in Support Local Frontline Heroes:

• Donate a $10 Jerky Hero SnackPak at beefjerkyoutlet.com.
• Beef Jerky Outlet will match 1 for 1 on every Hero SnackPak.
• Customers may include a personal thank you in the comment box.
• BJO will deliver the jerky and personal notes to local heroes.
• Stay home. Stay Safe. Make a difference.

4.  Scott Parker, CEO of Beef Jerky Outlet, added, “Beef Jerky Outlet has always been a supporter of first responders. During these uncertain times, we would like to reassure everyone that our USDA certified high-quality beef jerky is currently in adequate supply for anyone who needs it, especially our healthcare professionals.”

High Protein FamilyPak Demand Doubles During COVID-19 Pandemic

5.  Near the end of March 2020, Beef Jerky Outlet executives reported very high demand for 1-pound FamilyPaks. Since early March, sales have doubled on the larger-sized packages. While grocery chains around the country are struggling to keep an inventory of meat due to high demand, Beef Jerky Outlet locations nationwide continue to stock strong inventory levels.

6.  Beef Jerky Outlet’s highest priority has always been and continues to be the health and well-being of its franchise owners, staff, vendors, and loyal guests. “During these uncertain times, we would like to reassure everyone that our USDA certified high-quality beef jerky is currently in adequate supply for anyone who needs it,” said Scott Parker, CEO of Beef Jerky Outlet.

7.  Beef Jerky Outlet is offering exceptional online discounts and promotions in an effort to provide consumers the opportunity to stock their pantry. BJO is reporting online sales growth of 400% over the first few weeks of March. Kathy Raines, COO of Beef Jerky Outlet, said, “Our USDA high quality jerky products are the perfect food to stock your pantry. At Beef Jerky Outlet, you can always trust that our jerky will taste delicious and provide a great source of protein when you need it.”

8.  Meat products play an important role in providing essential household protein. It can be hard to find in local grocery stores due to panic buying. Beef Jerky Outlet can help. The brand has over 90+ physical stores that are located across the nation and offer in-store, online, and curbside pick-up service. These locally-owned locations can ship anywhere in the USA. Beef Jerky Outlet offers several varieties and sizes at all locations.

9.  “Beef Jerky is a shelf-stable high protein meat snack that is always good to have on hand,” according to Paul Lyons, president of Beef Jerky Outlet. “Our jerky has a one-year shelf life, comes prepackaged and the biggest benefit of all – no cooking required.”

Company History

10.  Beef Jerky Outlet was founded in 2010 by Paul Lyons and Scott Parker in Destin, Florida. Around this time, Lyons and Parker noticed that there was a sudden interest in beef jerky. The friends realized that there was an opportunity to fill this new niche and provide a wide array of beef jerky in different flavors and made from other meat besides beef. In addition to beef jerky, Lyons and Parker decided to sell other snacks like cheeses, peanut butters, flavored popcorn, and many other treats.

11.  After the success of the first Beef Jerky Outlet, Lyons and Parker started franchising the concept. While the locations are mostly franchises, there are also a few company-owned Beef Jerky Outlets. Today, there are Beef Jerky Outlets around the U.S.

Entrepreneur’s Franchise 500

12.  Beef Jerky Outlet ranked No. 453 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Beef Jerky Outlet franchise costs, based on Item 7 of the company’s 2020 FDD.

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

• Please click here for detailed information on Beef Jerky Outlet’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  70
• Outlets at the End of the Year:  97
• Net Change:  +27

2018

• Outlets at the Start of the Year:  97
• Outlets at the End of the Year:  99
• Net Change:  +2

2019

• Outlets at the Start of the Year:  99
• Outlets at the End of the Year:  95
• Net Change:  -4

Company-Owned

2017

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  7
• Net Change:  0

2018

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  6
• Net Change:  -1

2019

• Outlets at the Start of the Year:  6
• Outlets at the End of the Year:  6
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• The franchise is for the operation of a business under the “Beef Jerky Outlet” name which is a specialty retail store that features a variety of jerky products, sausages and smoked meats, sauces, rubs, seasonings, marinades, jams, butters, jellies, peanuts, candies, cheeses, and other similar foods.

• The following tables represent information for Beef Jerky Outlet’s past 3 fiscal years ending October 31.

• In Part 1, Beef Jerky Outlet provides the average gross sales, average gross product cost, average gross product profit, and average gross product margin achieved by non-franchised Stores owned and operated by Beef Jerky Outlet’s Affiliates for at least 1 year.

• In Part 2, Beef Jerky Outlet has listed only the average gross product sales achieved by Franchised Stores owned and operated by its franchisees for at least 1 year.

• In Part 3, Beef Jerky Outlet provides additional breakdown detail for the Affiliated Stores in the form of 3 tiers. This provides a high, mid, and low perspective on the average gross product sales results of the Affiliated Stores. Other than with respect to the length of time that an Affiliated Store has been in operation, there are no material differences in the operation of an Affiliated Store as compared to a Franchised Store.

• In Part 4, Beef Jerky Outlet provides additional breakdown detail for the Franchised Stores operated by its franchisees for at least 1 year. This provides a high, mid, and low perspective on the average gross product sales results of the Franchised Stores.

• Your sales and gross product margins may vary depending on a number of factors, including the location of your Store, pricing strategies, and how you operate your business.

• Gross Margin means total sales less cost of goods sold.

• These outlets have earned these amounts. Your individual results may differ. There is no assurance that you’ll earn as much.

• The figures used in this statement are average gross sales, average gross cost, average gross profit, and average gross margin only.

• Beef Jerky Outlet does not supply or provide cost information; however, the cost of goods to Affiliated Stores and the cost of goods to Franchised Stores is the same. Beef Jerky Outlet’s franchisees will not incur a greater cost of goods than its Affiliated Stores. There are no product cost differences between Affiliated Stores and Franchised Stores.

• The Affiliated Stores do not pay royalties, but do pay advertising fees. There are no other unique costs to franchisees that are not borne by Affiliated Stores.

• Net income will vary from Store to Store depending upon factors such as rental or real estate costs, costs of goods sold, labor costs, and other costs relating to the operation of the Store.

• The sales revenues shown in this chart reflect the historic experience of Beef Jerky Outlet’s Affiliated Stores and Franchised Stores; they should not be considered as the actual or potential sales that you will realize. Results for a new franchisee may differ from the results stated in this financial performance representation.

• Beef Jerky Outlet offered substantially the same services to the Stores described in this Statement. These Stores offered substantially the same products and services to the public as you will. The Stores report gross sales information to Beef Jerky Outlet based upon a uniform reporting system.

• The information presented below has not been audited.

Part 1 – 2017, 2018, and 2019 Average Results of Affiliated Stores

2017