In this FDD Talk post, you’ll learn the following:
- Section I – Estimated initial investment (franchise costs) for a MOOYAH franchise, based on Item 7 of the company’s 2022 FDD
- Section II – Initial franchise fee, royalty fee, and marketing fee for a MOOYAH franchise, based on Items 5 and 6 of the company’s 2022 FDD
- Section III – Number of franchised and company-owned MOOYAH outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD
- Section IV – Background information on the MOOYAH franchise opportunity, including relevant news updates
- Section V – Presentation and analysis of MOOYAH’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:
- 2021 average, median, high, and low gross sales and net sales for the 64 franchised traditional MOOYAH restaurants that operated during the entirety of the 2021 Measurement Period (January 4, 2021 to January 2, 2022)
- 2019, 2020, and 2021 average net sales for the 50 franchised traditional MOOYAH restaurants that operated for the entire 2019, 2020, and 2021 Measurement Periods
- 2021 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 46 franchised traditional MOOYAH restaurants that operated during the entirety of the 2021 Measurement Period, and reported certain costs and profit information to MOOYAH
- Section VI – Key ratios, comparables, computations, and analyses for the MOOYAH franchise opportunity (exclusive content for Platinum subscribers)
Section I – MOOYAH Franchise Costs
- MOOYAH franchise costs, based on Item 7 of the company’s 2022 FDD:
- Initial Franchise Fee: $40,000
- One-Time Extension Fee of Possession Deadline: $0 to $1,000
- Rent and Security Deposit: $5,632 to $15,000
- Leasehold Improvements: $255,000 to $344,169
- Furniture, Fixtures, Equipment, and Signage: $86,645 to $425,000
- Initial Training Costs: $17,000 to $21,665
- Computer Hardware and Software: $13,324 to $19,459
- Initial Inventory/Supplies: $9,000 to $15,000
- Uniforms: $1,000 to $2,000
- Professional Services: $1,000 to $5,500
- Grand Opening Promotional Expenses: $8,000 to $12,000
- Insurance: $617 to $3,000
- Licenses and Permits: $700 to $6,000
- Additional Funds (for initial 3-month period): $40,000 to $80,000
- Total Estimated MOOYAH Franchise Costs: $477,918 to $989,793
Section II – MOOYAH’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- MOOYAH’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:
- Initial Franchise Fee: $40,000
- Royalty Fee: 6% of Gross Sales
- Advertising Fee: 3% of Gross Sales
Section III – Number of Franchised and Company-Owned MOOYAH Outlets
Franchised
2019
- Outlets at the Start of the Year: 73
- Outlets at the End of the Year: 74
- Net Change: +1
2020
- Outlets at the Start of the Year: 74
- Outlets at the End of the Year: 77
- Net Change: +3
2021
- Outlets at the Start of the Year: 77
- Outlets at the End of the Year: 80
- Net Change: +3
Company-Owned
2019
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 2
- Net Change: +1
2020
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 1
- Net Change: -1
2021
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- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 1
- Net Change: 0
Section IV – Background Information on the MOOYAH Franchise
20 Things You Need to Know About the MOOYAH Burgers, Fries & Shakes Franchise
Brings on New Social Media Partner, Agency Habitat
1. In mid-August 2021, MOOYAH Burgers, Fries & Shakes announced that it has partnered with Agency Habitat of Fort Worth, Texas to shake up its social media presence as it looks for more ways to connect with fans while bringing its “Seriously Fun” brand to life. A creative agency specializing in strategic branding and audience-driven content creation, Agency Habitat will be charged with handling MOOYAH’s Twitter, Facebook, Instagram, and TikTok accounts.
2. Natalie Anderson Liu, vice president of brand for MOOYAH, said, “The team at Agency Habitat is smart, creative and fun and demonstrated they understood our brand from the very beginning. Right away, they’ve been able to capture the humor we’re going for and bring it to life in engaging, animated content our fans are going to love. Our new strategy is to lead with motion and video graphics to align with consumer trends and Agency Habitat’s capabilities make that easy. And, of course, joining TikTok was a must with this partnership.”
3. Katie Aurelio, associate creative content director at Agency Habitat, added, “Social media is where brand personalities can truly come to life. In a digital world, it’s a crucial tactic for building brand awareness and driving engagement with new and current customers. Working with a brand as Seriously Fun as MOOYAH is an incredible opportunity and our team can’t wait to get to work. Who doesn’t love burgers, fries and shakes?”
4. The agency’s on-staff photographers, videographers, and motion-graphic designers will work together to create compelling work for MOOYAH. Agency Habitat’s on-site neighbor and sister company, Lowtown Studios, will enable the team to quickly create high-quality studio content to keep up with the demands of the social space.
5. Neil Foster, president and CEO of Agency Habitat, said, “We’re very excited to work with MOOYAH. Their amazing culture and quality food make them a great fit. We can’t wait to create some amazing content together.”
Releases Revamped Rewards Program and App
6. At the end of August 2021, MOOYAH Burgers, Fries & Shakes updated its popular rewards program and launched a refreshed app. The rewards app – featuring a fresh look using the updated MOOYAH logo – allows the burger brand to be nimbler, bringing its digital guest experience to the next level through its partnership with app provider Punchh and ordering platform Olo.
7. Natalie Anderson Liu, vice president of brand for MOOYAH, said, “With off-premise and to-go being a priority for our Guests now more than ever, we updated our app to feature enhancements that improve those experiences. Our technology partners worked hard to accommodate our special requests and we are very happy with the result. This update addresses suggestions from both our Franchise Partners and Guests so we are confident it will be a hit.”
8. The enhanced app includes a restructure of MOOYAH’s rewards program, providing guests with clearer instructions on how to use their coupons, redeemables, and fundraiser codes as well as enhanced banked rewards and opportunities to earn rewards quicker. Through its current rewards program, MOOYAH guests must earn 100 points in order to receive a $10 reward. The new rewards program gives guests $5 rewards after just 50 points.
9. Anderson Liu added, “Our app is the vehicle for delivering rewards, bonuses and discounts to our Guests. By allowing Guests to earn rewards at literally half the spend as before, we are encouraging them to visit more frequently. Increasing traffic is key for our Franchise Partners right now so seeing our regulars even more often is going to be great.”
10. MOOYAH rewards members will receive numerous reminders before their points expire – two months, one month, and one week prior to expiration – giving them a sense of urgency to use the banked rewards to treat themselves to a burger, fries or shake, gratis. According to Anderson Liu, the soon-to-follow second phase of this update will allow guests to order dine-in meals from their phones for contactless payment and allow guests to pay with MOOYAH gift cards.
Amid the Pandemic, Franchise Owners Hit Million-Dollar Stores Faster Than Ever Before
11. In mid-November 2021, MOOYAH Burgers, Fries & Shakes said it was on track for 18 more locations to hit the million-dollar mark by the end of 2021. Of these locations, 16-18 of the franchise owners will hit the milestone for the first time, and 20 locations will reach the milestone that weren’t million-dollar locations in 2020. The better-burger brand’s average unit volume (AUV) was the highest it has ever been at the end of Q2 at $930,000, and MOOYAH expected to have its first $2 million store in 2021 at a California location.
12. Mike Sebazco, executive vice president of operations and development for MOOYAH, weighed in on the success the burger franchise had seen in 2021. He said, “We have done everything in our power to help increase our Franchise Owners’ business from marketing to operations and providing the support that has led our system of owners to the strongest million-dollar restaurant year we’ve ever seen.”
13. The mouthwatering burger franchise served up deals for 22 new restaurants in Q3. The Plano, Texas-based company offering mouthwatering, made-to-order burgers, french fries hand-cut from Idaho potatoes, real ice cream shakes, and more in a fun, family-friendly environment hit record-breaking restaurant and franchise sales in 2021.
14. Barry Lattuca’s 3-year-old Sudbury, Massachusetts location was one of the locations to reach the $1 million mark in 2021, and Lattuca shared some insight into his operation. There have been some shifts in traffic and consumer patterns since the beginning of the pandemic up to current timing, with the most specific being daytime sales patterns.
15. Lattuca said, “Lunch was busier in the first half of 2021 because kids were virtually learning. Now that kids are back in school in-person, nights and weekends are the busier sales times.” Lattuca also noted that there was a shift from urban to suburban with people working from home more. Sudbury is in a suburban location. “Our urban Boston Common location was previously one of the highest sales locations, but it took a hit with COVID and people working from home. Sales are building back up now that people are returning to the office more,” Lattuca added.
Company History
16. MOOYAH Burgers, Fries & Shakes was founded in 2007 by Rich Hicks and Todd Istre in Plano, Texas. Hicks and Istre wanted to start a fast casual burger joint that served high quality food at an affordable price. The chain uses Angus Beef brand beef in its burgers and since 2011, each location bakes its buns fresh daily.
17. The first MOOYAH was a success and Hicks and Istre started franchising right away. Over the next few years, more MOOYAH locations opened around the U.S. In 2013, the first international store opened in Dubai and by 2016, MOOYAH had over 100 stores in operation.
18. The following year, MOOYAH was acquired for an undisclosed amount by private equity firms Gala Capital Partners, LLC and Balmoral Funds, LLC, which still own the chain today.
19. Around 2019, MOOYAH introduced its Lifestyle Burgers, which include Vegan, Paleo, Keto, low calorie, and gluten-free options. It is one of the only burger chains to offer such a wide variety of foods for different dietary needs. 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
20. MOOYAH Burgers, Fries & Shakes did not rank on Entrepreneur’s 2022 Franchise 500 list.
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the MOOYAH Franchise (Item 19, 2022 FDD)
Definitions
- As used in this Item 19, the following terms have the meanings given them below:
- “2021 Measurement Period” means the 52-week period beginning on January 4, 2021 and ending on January 2, 2022.
- “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 generated from, or attributed to, your 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, as reported by the franchisee, 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, as reported by the franchisee, spent to maintain possession of the premises from which the Restaurant is operated, 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 2, 2022, there were a total of 81 Restaurants in operation in the United States, and 80 of them were owned and operated by third-party franchisees.
- Of the 80 franchised Restaurants, 8 operated at Non-Traditional Sites and 8 Restaurants opened during MOOYAH’s 2021 fiscal year.
- The remaining 64 Restaurants make up the “Complete Set” of franchised Restaurants that operated standard Restaurants during the entirety of the 2021 Measurement Period. The results shown in Part 1 below are the results of the Complete Set of 64 Restaurants owned and operated by third-party franchisees.
- Of the 64 franchised Restaurants that make up the Complete Set, 50 Restaurants operated for the entire 2019, 2020, and 2021 Measurement Periods (the “Comparison Set”). The results shown in Part 2 below are the results of the Comparison Set of 50 Restaurants owned and operated by third-party franchisees.
- 46 franchised 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 2021 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 2021 Measurement Period.
2021 Gross Sales
- Average: $1,016,330
- Number/Percentage That Met or Exceeded the Average: 35/54.7%
- Median: $1,038,719
- Lowest: $321,017
- Highest: $1,988,541
2021 Net Sales
- Average: $978,276
- Number/Percentage That Met or Exceeded the Average: 35/54.7%
- Median: $1,000,280
- Lowest: $315,349
- Highest: $1,912,773
Part 2 – Comparison of Results for 2019, 2020, and 2021
- MOOYAH has also compared the results of 2019, 2020, and 2021 of the Restaurants that operated for the entirety of all three years.
- Average Net Sales for 2021 Measurement Period: $995,412
- Average Net Sales for 2020 Measurement Period: $846,237
- Average Net Sales for 2019 Measurement Period: $875,928
- Percentage Change in Same-Store Net Sales (SSS%) from 2020 Measurement Period to 2021 Measurement Period: 17.6%
- Percentage Change in Same-Store Net Sales (SSS%) from 2019 Measurement Period to 2020 Measurement Period: -3.4%
Part 3 – Certain Costs and Profit Information
- Throughout the 2021 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 64 Restaurants that make up the Complete Set, 18 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 46 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 (the top and 2nd quartile each having 11 Restaurants and the 3rd and bottom quartile each having 12 Restaurants), ranked (highest to lowest) by the percentage of EBITDA reported by the Restaurants for the 2021 Measurement Period.
P&L Set (46 Restaurants)
- Average Total Food and Beverage Sales: $1,078,122
- Average Costs of Goods Sold: 26.6%
- Average Labor Costs: 29.5%
- Average Occupancy Costs: 8.6%
- Average EBITDA: $124,325 (11.5%)
Top Quartile (11 Restaurants)
- Average Total Food and Beverage Sales: $1,101,541
- Average Costs of Goods Sold: 25.8%
- Average Labor Costs: 27.3%
- Average Occupancy Costs: 8.4%
- Average EBITDA: $227,873 (20.7%)
2nd Quartile (11 Restaurants)
- Average Total Food and Beverage Sales: $1,216,827
- Average Costs of Goods Sold: 26.3%
- Average Labor Costs: 27.3%
- Average Occupancy Costs: 7.1%
- Average EBITDA: $182,203 (15.0%)
3rd Quartile (12 Restaurants)
- Average Total Food and Beverage Sales: $1,136,559
- Average Costs of Goods Sold: 26.7%
- Average Labor Costs: 29.3%
- Average Occupancy Costs: 8.2%
- Average EBITDA: $99,357 (8.7%)
Bottom Quartile (12 Restaurants)
- Average Total Food and Beverage Sales: $871,072
- Average Costs of Goods Sold: 27.7%
- Average Labor Costs: 33.8%
- Average Occupancy Costs: 10.7%
- Average EBITDA: $1,318 (0.2%)
- Some Restaurants have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.
Section VI – MOOYAH Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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