In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the MOOYAH franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a MOOYAH franchise, based on Item 7 of the company’s 2021 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a MOOYAH franchise, based on Items 5 and 6 of the company’s 2021 FDD
- Section IV – Number of franchised and company-owned MOOYAH outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
- Section V – Presentation and analysis of MOOYAH’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:
- 2020 average, median, high, and low gross sales and net sales for the 61 franchised traditional MOOYAH restaurants that operated during the entirety of the 2020 Measurement Period (December 30, 2019 to January 3, 2021)
- 2019 and 2020 average net sales for the 54 franchised traditional MOOYAH restaurants that operated for the entire 2019 and 2020 Measurement Periods
- 2020 average food and beverage sales, costs of goods sold, labor costs, occupancy costs, and EBITDA for the top quartile, second quartile, third quartile, bottom quartile, and all 44 franchised traditional MOOYAH restaurants that operated during the entirety of the 2020 Measurement Period, and reported certain costs and profit information to MOOYAH
Section I – Background Information
30 Things You Need to Know About the MOOYAH Burgers, Fries & Shakes Franchise
Adds Housemade Chips and Cookies to Its Permanent Menu Based on Customer Demand
1. In late September 2020, MOOYAH Burgers, Fries & Shakes updated its menu with new and delicious items to continue to bring its customers the foods they crave. The menu, which began its rollout on September 15, has been thoughtfully designed with changing consumer demands in mind that have evolved in response to the COVID-19 crisis.
2. MOOYAH’s revamped menu includes upgrades to the brand’s classic cheeseburger offering. In addition, cookies and housemade potato chips were officially added to the permanent menu. Chips and cookies were introduced as limited offerings to the online menu in the spring at an affordable price point. The menu additions also travel well for off-premise dining while supporting MOOYAH’s franchisees by driving incremental sales.
3. Tony Darden, president of MOOYAH Burgers, Fries & Shakes, said, “Since COVID-19 hit, we have been laser-focused on providing our Guests with menu items that bring Guests comfort and make them happy during a stressful time, while also supporting our Franchise Owners with new ways to drive revenue. Chips and cookies have always been a part of our catering program, and they lead to a great to-go experience, so it was an easy decision to add them permanently to our menu as Guest demand has increased for these addictive menu items.”
4. MOOYAH’s housemade chips are cut fresh daily from whole Idaho potatoes and seasoned with the brand’s signature fry seasoning. The chips are available as a combo option in adult and kids meals as well as a side in both personal and shareable sizes. MOOYAH’s classic hand-cut french fries continue to be available to order, but as the number of delivery and to-go orders continued to rise during the pandemic, the brand wanted to provide chips as an additional to-go alternative – noting that 85 percent of chip sales in test locations were to-go or delivery orders.
5. The shake section of MOOYAH’s menu is now called Shakes + Cookies and includes chocolate chip cookies that are baked fresh daily along with MOOYAH’s seven shake flavors made with 100% real ice cream.
6. The MOOYAH Single Cheeseburger is now featured instead of the MOOYAH Double Cheeseburger (The MDC) as a more affordable option for guests. The new favorite is made with 100% certified Angus beef, topped with American cheese, lettuce, tomato, and MOOYAH sauce on a potato bun.
7. MOOYAH has also continued its partnership with Avocados From Mexico (AFM), adding the AFM fresh seal next to Fresh Avocado in its Build-Your-Own section of the menu and on all digital menu formats.
Closes Out 2020 by Welcoming 18 Stores Into the Million Dollar Club
8. At the end of January 2021, MOOYAH Burgers, Fries & Shakes announced that 18 of its stores joined the franchise’s Million Dollar Club – a group of restaurants who have pulled in at least $1 million in sales – by the end of 2020. Among this year’s million dollar club inductees: three new MOOYAH locations that were in their first 12 months of operation, as well as four existing locations that were able to crack the million-dollar mark for the first time in 2020. Additionally, 25 locations posted year-over-year net sales gains.
9. Mike Sebazco, vice president of operations for MOOYAH, said, “It was interesting to us how many stores grew sales in 2020. We were able to onboard a third-party delivery strategy, implement curbside delivery and make it easier to buy from us. I know a lot of other brands in the industry did not enjoy that level of success.”
10. Set against the backdrop of pandemic lockdowns and dining room size restrictions, the stellar performance caps a busy year for the brand. MOOYAH opened seven stores, representing a 10% increase in the number of MOOYAH locations, and completed five full store reimages.
11. In 2020, the brand unveiled its first updated restaurant design, featuring dining room seating zones created to accommodate community dining, dedicated third-party delivery and pickup shelving, closed kitchens, digital menu boards, and an overall more modern vibe.
12. Additionally, 30% of new stores were opened by existing Franchise Owners, attesting to the faith investors have in the brand’s future as evidenced by the leadership team’s all-hands-on-deck approach to franchise support.
13. Tony Darden, president of MOOYAH, added, “From the beginning of the pandemic, my ask was that we stay focused on how best we can support our Franchise Partners. Our owners are the lifeblood of MOOYAH, so being able to show fluidity in our initiative implementation process was paramount. At the core of this was being steadfast in our conviction that there would be no layoffs amongst the corporate support team, thus alleviating any personal concerns to focus on supporting our Franchise Owners.”
14. Sebazco continued, “Not only did we not lose any projects that were on the board, we actually gained a couple. We were able to attract refugees from other brands that weren’t getting support. We have a lot of wind in our sails right now. We have a lot of initiatives that will continue our upward trajectory this year and beyond.”
15. In addition to building guest excitement with limited-time offers and an improved app that will make ordering easier, the brand plans to roll out more digital menu boards, giving locations the flexibility to dynamically adjust prices and updates. And in 2021, MOOYAH is continuing the store remodeling programs that started in 2020, providing improved in-store experiences for its customers, planning for 10 existing location remodels. Additionally, customers will also soon have the option to use a kiosk at select stores, with five new locations already signing up for kiosk ordering as an additional point of sale option.
Prepares to Launch First Drive-Thru Location
16. In early March 2021, MOOYAH Burgers, Fries & Shakes announced that it is launching its first drive-thru location by late-2021, a year earlier than it originally anticipated. The announcement comes after the Plano, Texas-based franchise embarked on an ambitious store-design refresh, already completing renovations at 5 locations with plans for another 10 this year. Additionally, MOOYAH improved its digital ordering and curbside pickup options last year, making it easier than ever for guests to get the food they love.
17. According to Tony Darden, president of MOOYAH, “We have made it possible for our Guests to access us the way they want to. And by doing that, we’ve already hit our 2022 goals for both digital and loyalty transactions. So this year, we are committed to continue that progress. Drive-thru is the obvious way to do that.”
18. Currently, MOOYAH is scouting locations in three different markets for the brand’s inaugural drive-thru and plans to have 2-3 drive-thrus open by the end of the year. The company says it was able to achieve its drive-thru plans early because it drastically reduced customers’ wait times over the past year, thanks to better employee scheduling, new kitchen display system technology, and faster cooking equipment.
19. For instance, MOOYAH invested in scheduling software to allow locations to better coordinate and deploy their Team Members during peak times. “We have spent a lot of time trying to identify those times that are crucial to have the right people in the right places at the right times,” said Darden. “It’s paid off in shorter wait times for our Guests.”
20. Additionally, MOOYAH introduced a kitchen display system, achieving better communication between cashier and kitchen, with the additional benefits of creating a quieter environment and increasing kitchen output and order accuracy.
21. A third important part in the brand’s ability to meet the production demands of a drive-thru was its investment in state-of-the-art cooking equipment that is able to cook burgers at a faster rate, as well as heat up faster between orders.
22. With the faster order times these operational innovations have achieved, the brand is confident it will meet the demands of drive-thru service, creating a great experience for customers who prefer ordering without leaving their car. Darden added, “Whether online, in-store, curbside or now with drive-thru, we’re excited to be able to deliver the most delicious burgers any way our Guests choose to order.”
23. The drive-thru announcement comes after a busy year for the brand, which has been undergoing a design refresh that started in 2019, when MOOYAH partnered with Livit, a Madrid-based company and global leader in guest experience design, to develop a new prototype that addresses third-party delivery concerns.
24. To better align with the brand, Livit has also developed a new store interior design that features separate entries and exits for off-premise and dine-in, a closed-off kitchen to create a more elevated, intimate dining experience for customers, digital menu board and kitchen display systems, and modular seating arrangements to accommodate different types of customer needs.
25. The Livit team said, “We are delighted to continue working with this inspiring brand whilst enhancing and developing our long-standing strategic partnership. In the past few months, we have seen the MOOYAH brand genuinely committed to supporting its local communities and Franchise Owners through the pandemic. These challenging times have however given us the opportunity to focus on the future and embrace new MOOYAH experiences.”
26. “Our team’s approach whilst designing the drive-thru prototype was to bring out the ‘ridiculicious’ dining experience to the exterior in a fast and convenient way that allows MOOYAH’s Guests to enjoy the top-notch food without needing to get out of the car. We have drawn on the brand personality to generate the materials and graphics to achieve a perfect match with the interiors to build a strong emotional connection with Guests and create a holistic 360º Guest experience,” said the Livit team.
27. MOOYAH Burgers, Fries & Shakes was founded in 2007 by Rich Hicks and Todd Istre in Plano, Texas. Hicks and Istre wanted the food at MOOYAH to be high quality even though it is in a fast-casual setting. The chain uses Angus beef in its burgers and since 2011, each location bakes its buns fresh daily.
28. MOOYAH offered franchising from the start and after growing around the United States for a few years, the first international location opened in Dubai in 2013. This was also the brand’s 50th store. By 2016, MOOYAH grew to over 100 locations around the world. The following year, MOOYAH was acquired by private equity firms Gala Capital Partners, LLC and Balmoral Funds, LLC for an undisclosed amount.
29. Around 2019, MOOYAH introduced its Lifestyle Burgers, which include vegan, Paleo, Keto, low calorie, and gluten-free options. Today, there are MOOYAH Burgers, Fries & Shakes restaurants across the United States, Canada, Saudi Arabia, Oman, United Arab Emirates, Qatar, and Bahrain.
Entrepreneur’s Franchise 500
30. MOOYAH Burgers, Fries & Shakes ranked No. 432 on Entrepreneur’s 2021 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of MOOYAH franchise costs, based on Item 7 of the company’s 2021 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on MOOYAH’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 77
- Outlets at the End of the Year: 73
- Net Change: -4
- Outlets at the Start of the Year: 73
- Outlets at the End of the Year: 74
- Net Change: +1
- Outlets at the Start of the Year: 74
- Outlets at the End of the Year: 77
- Net Change: +3
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 1
- Net Change: -1
- Outlets at the Start of the Year: 1
- 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, 2021 FDD) and Analysis
- As used in this Item 19, the following terms have the meanings given them below:
- “2020 Measurement Period” means MOOYAH’s 2020 fiscal year, which began on December 30, 2019 and ended on January 3, 2021.
- “Costs of Goods Sold” are the amounts, as reported by the franchisee, spent to purchase and have delivered to the Restaurant: (i) the products, inventory, and ingredients necessary to prepare the food and beverage items offered for sale in the Restaurant, and (ii) the paper products and inventory used in delivering food and beverage products to the Restaurant’s customers, including napkins, paper bags, cups and straws, liners, food containers, and plastic utensils.
- “EBITDA” means the Restaurant’s earnings before interest, taxes, depreciation, and amortization, as reported by the franchisees, calculated by subtracting from the Restaurant’s Total Food and Beverage Sales all expenses associated with operating the Restaurant, including promotional discounts, employee meal discounts and complimentary meals, the Restaurant’s Costs of Goods Sold, Labor Costs, Occupancy Costs, and all of the Restaurant’s other operating expenses (including royalties and other fees paid by the franchisee to MOOYAH), in every case, as reported by the franchisee.
- “Gross Sales” means all sales, revenues, charges, and receipts received by a Restaurant or attributed to a Restaurant, whether from cash, check, credit or debit card, barter exchange, trade credit or other credit transactions, but exclusive of Sales Tax and any refunds made for a Restaurant’s customers.
- “Sales Tax” includes, but is not limited to, sales or use tax, goods and services tax, gross receipts tax, excise tax or other similar tax collected by the franchisee from the franchisee’s customers and paid to the appropriate taxing authority.
- Payments by gift certificate, gift card, or similar programs are included in Gross Sales when the gift certificate, gift card, or similar item is redeemed.
- Gross Sales also includes all insurance proceeds the franchisee received for loss or interruption of business due to a casualty or similar event at the Restaurant.
- This definition is the same definition for “Gross Sales” that is used in the Franchise Agreement and that will serve as the basis for your calculation of royalty and certain other fees.
- “Labor Costs” are the amounts spent on restaurant wages (salaried and hourly), bonuses, payroll taxes, payroll fees, benefits (insurance, 401k, vacation, etc.), and other employee-related labor expenses. This does not include owner-operator salary.
- “Net Sales” means Gross Sales minus promotional discounts, including employee meal discounts and complimentary meals, the amounts of which may be recommended by MOOYAH but which are ultimately determined by each individual franchisee.
- “Non-Traditional Site” means Restaurants that operate at non-traditional sites (such as mall food courts, airports, hospitals, cafeterias, commissaries, schools, hotels, office buildings and stadiums, arenas, ballparks, festivals, fairs, military bases, and other mass gathering locations or events).
- “Occupancy Costs” are the amounts spent by the franchisee to maintain its possession of the premises from which the Restaurant is operated and to open and operate the physical premises, including amounts owed to the landlord for rent and the Restaurant’s share of certain of the landlord’s real estate taxes, insurance, and common area maintenance expenses (when applicable), the costs of maintaining the property and casualty insurance, the costs of utilities, and other costs related to the premises of the Restaurant.
- “Total Food and Beverage Sales” means the portion of the Restaurant’s revenue that was attributed to the sale of food and beverage products at the Restaurant, as reported by the franchisee. Total Food and Beverage Sales excludes any sales tax collected by the franchisee from the franchisee’s customers and paid to the appropriate taxing authority, but it does not exclude discounts provided by the franchisee to the customer or employee; as a result, the Total Food and Beverage Sales are not the same as Gross Sales or Net Sales, and are not the amount on which you would pay royalties, brand fund contributions, or other fees that are based on Gross Sales (as defined above and in the Franchise Agreement).
Data Sets and Methodology
- As of January 3, 2021, there were a total of 77 Restaurants in operation in the United States, and 76 of them were owned and operated by third-party franchisees.
- Of the 76 franchised Restaurants, 8 either operated at Non-Traditional Sites or had limited operating hours, 6 did not operate for at least 12 months prior to the end of MOOYAH’s 2020 fiscal year, and 1 remained temporarily closed since March 2020 due to COVID-19.
- The remaining 61 Restaurants make up the “Complete Set” of franchised Restaurants that operated standard Restaurants during the entirety of the 2020 Measurement Period. The results shown in Part 1 below are the results of the Complete Set of 61 Restaurants owned and operated by third-party franchisees.
- Of the 61 franchised Restaurants that make up the Complete Set, 54 Restaurants operated for the entire 2019 and 2020 Measurement Periods (the “Comparison Set”). The results shown in Part 2 below are the results of the Comparison Set of 54 Restaurants owned and operated by third-party franchisees.
- Certain, but not all, of the Restaurants in the Complete Set whose data is reported in Parts 1 and 2 below also reported to MOOYAH their Total Food and Beverage Sales, Costs of Goods Sold, Labor Costs, Occupancy Costs, and EBITDA for the 2020 Measurement Period. Those data points for the franchised Restaurants who reported them are set forth in Part 3 below.
- The data presented in the charts in Parts 1 and 2 below is data MOOYAH obtained by polling the information directly from the franchisees’ point-of-sale systems. The data presented in the charts in Part 3 below were reported to MOOYAH by the franchisees of the reporting Restaurants.
- In all cases, the data used was the franchisees’ data. Neither MOOYAH nor its affiliates have undertaken an independent investigation to verify the data that MOOYAH polled from the franchisees’ point-of-sale systems or that was provided to MOOYAH by the reporting franchisees.
- Because the numbers of Restaurants that comprise the data sets reported in Parts 1, 2, and 3 below are different and are sorted by different criteria, the Restaurant numbers indicated in the charts in each Part do not correlate to or match the Restaurant numbers in the charts in the other Parts.
- Moreover, as described in further detail above in the Definitions section, Gross Sales, Net Sales, and Total Food and Beverage Sales are calculated differently for the same Restaurant. As a result, Parts 1, 2, and 3 should be read independently of each other.
Part 1 – Average, Median, Highest, and Lowest Gross Sales
- The chart below provides, for the Complete Set, the average Gross Sales and average Net Sales for the 2020 Measurement Period.
2020 Gross Sales
- Average: $863,252
- Number/Percentage That Met or Exceeded the Average: 32/52.5%
- Median: $868,886
- Lowest: $258,695
- Highest: $1,619,317
2020 Net Sales
- Average: $828,139
- Number/Percentage That Met or Exceeded the Average: 32/52.5%
- Median: $840,904
- Lowest: $246,446
- Highest: $1,547,788
Part 2 – Comparison of Results for 2019 and 2020
- To show the impact of COVID-19 related restrictions on the operation of MOOYAH Restaurants during 2020, MOOYAH has compared the results of 2019 and 2020 of the Restaurants that operated for the entirety of both years.
- Average Net Sales for 2020 Measurement Period: $825,535
- Average Net Sales for 2019 Measurement Period: $866,935
- Percentage Change in Same-Store Net Sales (SSS%) from 2019 Measurement Period to 2020 Measurement Period: -4.8%
Part 3 – Certain Costs and Profit Information
- Throughout the 2020 Measurement Period, MOOYAH requested that Restaurants periodically report to it on the following categories that it believes are important to understanding the Restaurants’ performance: Total Food and Beverage Sales, Costs of Goods Sold, Labor Costs, Occupancy Costs, and EBITDA.
- Of the 61 Restaurants that make up the Complete Set, 17 Restaurants either did not comply with MOOYAH’s request or provided significantly incomplete data and, therefore, have been excluded from the results shown in the charts shown in this Part 3. The 44 remaining Restaurants make up the “P&L Set.”
- The charts below show the data for 4 groups of Restaurants: MOOYAH divided the P&L Set into 4 quartiles, each having 11 Restaurants, ranked (highest to lowest) by the amount of EBITDA reported by the Restaurants for the 2020 Measurement Period.
P&L Set (44 Restaurants)
- Average Total Food and Beverage Sales: $933,561
- Average Costs of Goods Sold: 28.2%
- Average Labor Costs: 29.9%
- Average Occupancy Costs: 9.4%
- Average EBITDA: $73,488 (7.9%)
Top Quartile (11 Restaurants)
- Average Total Food and Beverage Sales: $1,115,353
- Average Costs of Goods Sold: 28.0%
- Average Labor Costs: 29.8%
- Average Occupancy Costs: 8.7%
- Average EBITDA: $152,530 (13.7%)
2nd Quartile (11 Restaurants)
- Average Total Food and Beverage Sales: $985,205
- Average Costs of Goods Sold: 27.0%
- Average Labor Costs: 28.0%
- Average Occupancy Costs: 9.0%
- Average EBITDA: $87,032 (8.8%)
3rd Quartile (11 Restaurants)
- Average Total Food and Beverage Sales: $890,292
- Average Costs of Goods Sold: 27.9%
- Average Labor Costs: 29.9%
- Average Occupancy Costs: 9.1%
- Average EBITDA: $59,142 (6.6%)
Bottom Quartile (11 Restaurants)
- Average Total Food and Beverage Sales: $743,394
- Average Costs of Goods Sold: 29.9%
- Average Labor Costs: 31.9%
- Average Occupancy Costs: 10.8%
- Average EBITDA: ($4,752) (-0.6%)
- Some Restaurants have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.