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

Section I – Estimated initial investment (franchise costs) for a Twin Peaks franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Twin Peaks franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Twin Peaks outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Twin Peaks franchise opportunity

Section V – Presentation and analysis of Twin Peaks’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average, median, high, and low unit volume for the 56 franchised Twin Peaks Restaurants operating for the full 2022 fiscal year ended December 25, 2022

• 2022 average, median, high, and low unit volume for the 28 company-owned Twin Peaks Restaurants operating for the full 2022 fiscal year ended December 25, 2022

• 2022 average cost of goods sold (food cost, bar cost, total) and labor cost (hourly staff, manager, payroll taxes/benefits, total) for the 28 company-owned Twin Peaks Restaurants operating for the full 2022 fiscal year ended December 25, 2022

Section VI – Key ratios, comparables, computations, and analyses for the Twin Peaks franchise opportunity (exclusive content for Platinum subscribers)

Section I – Twin Peaks Franchise Costs

• Twin Peaks (new construction space) franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $50,000
• Leasehold Improvements and Deposits:  $2,400,000 to $3,900,000
• Equipment, Furniture, Fixtures, and Signage:  $1,200,000 to $1,400,000
• Liquor License:  $1,000 to $14,000
• Business Licenses and Permits:  $3,000 to $4,000
• Initial Training Costs:  $40,000 to $60,000
• Opening Training Team Costs:  $175,000 to $200,000
• Initial Inventory and Supplies:  $50,000 to $120,000
• Professional Services:  $8,000 to $20,000
• Restaurant Opening Promotion:  $10,000
• Insurance:  $50,000 to $90,000
• Additional Funds for Initial 3-Month Period:  $100,000 to $180,000
• Total Estimated Twin Peaks Franchise Costs:  $4,087,000 to $6,048,000

Section II – Twin Peaks’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Twin Peaks’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $50,000
• Royalty Fee:  5% of Gross Sales
• Brand Fund Contribution:  up to 4% of Gross Sales; currently 2.5% of Gross Sales
• Local Marketing Expenditure/Advertising Cooperative:  0.5% of Gross Sales

Section III – Number of Franchised and Company-Owned Twin Peaks Outlets

Franchised

2020

• Outlets at the Start of the Year:  56
• Outlets at the End of the Year:  52
• Net Change:  -4

2021

• Outlets at the Start of the Year:  52
• Outlets at the End of the Year:  57
• Net Change:  +5

2022

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

Company-Owned

2020

• Outlets at the Start of the Year:  28
• Outlets at the End of the Year:  26
• Net Change:  -2

2021

• Outlets at the Start of the Year:  26
• Outlets at the End of the Year:  28
• Net Change:  +2

2022

• Outlets at the Start of the Year:  28
• Outlets at the End of the Year:  30
• Net Change:  +2

Section IV – News Updates on the Twin Peaks Franchise

• FAT Brands Announces Intent to Take Twin Peaks Public

• Fat Brands to Issue IPO for Twin Peaks Brand

• Twin Peaks Hits Key Growth Milestone with 100th Opening

• Twin Peaks Nears 100 Locations to Finish Award-Filled 2022

• Twin Peaks Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Twin Peaks Franchise (Item 19, 2023 FDD)

Part 1 – Fiscal Year 2022 Annual Unit Volume of Franchised Twin Peaks Restaurants

• Twin Peaks’ 2022 fiscal year began on December 27, 2021 and ended on December 25, 2022 (“FY 2022”).

• As of the last day of FY 2022, there were 61 franchised Twin Peaks Restaurants (the “Franchised Restaurants”) operating in the US, of which 56 were open and had been operating for the entire FY 2022.

• The Franchised Restaurants are included in the data set for Part 1 and are located in the following states: Alabama, Arizona, Arkansas, California, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Washington.

• The Franchised Restaurants operated for an average of 7.42 years as of the last day of FY 2022.

• The Franchised Restaurants are primarily standalone sites of 6,000 to 8,000 square feet, although some Franchised Restaurants may operate similarly-sized Twin Peaks Restaurants in end-cap or inline locations. The Franchised Restaurants are generally consistent with the current Twin Peaks model offered in the disclosure document, with current audio/visual system and related technology systems.

• Average AUV:  $5,810,083
• Median AUV:  $5,539,722
• Percentage of Franchised Restaurants Which Attained or Surpassed Average AUV:  47.1%
• Highest AUV:  $12,596,875
• Lowest AUV:  $2,582,920

• “AUV” means the annual unit volume calculated based upon the sales of the Franchised Restaurants included in the data set. The sales data was obtained from reports generated by the point-of-sale systems in the applicable Franchised Restaurants and has not been audited or independently verified by Twin Peaks for accuracy.

• The average, median, highest, and lowest AUVs include the total of all food sales and beverage sales, including liquor, wine and beer sales, and sales of promotional merchandise.

• Sales as shown in this Part 1 do not equate to “Gross Sales” as defined in the Franchise Agreement because the “Gross Sales” definition provides for certain exclusions, including (as examples) refunds provided to customers in connection with resolving customer satisfaction issues, promotional campaigns established by Twin Peaks, taxes, and employee meal discounts.

Part 2 – Fiscal Year 2022 Annual Unit Volume of Company-Owned Twin Peaks Restaurants

• Average AUV:  $5,078,456
• Median AUV:  $5,007,264
• Percentage of Company-Owned Restaurants Which Attained or Surpassed Average AUV:  37%
• Highest AUV:  $7,482,988
• Lowest AUV:  $3,347,853

Part 3 – Fiscal Year 2022 Profit and Loss Data for Company-Owned Restaurants

Average AUV:  $5,078,456 (100.0%)

Average Cost of Goods Sold:  $1,382,075 (27.2%)

• Food:  $851,162 (16.8%)
• Bar:  $530,912 (10.5%)

Average Labor Cost:  $1,494,597 (29.4%)

• Hourly Staff:  $865,549 (17.0%)
• Manager:  $383,024 (7.5%)
• Payroll Taxes/Benefits:  $246,024 (4.8%)

• As of the last day of FY 2022, there were 30 company-owned Twin Peaks Restaurants (“Company-Owned Restaurants”) operating in the US, of which 28 were open and had been operating for the full FY 2022. Part 2 and Part 3 include data for the 28 company-owned Twin Peaks Restaurants.

• The Company-Owned Restaurants are located in Arkansas, Colorado, Illinois, Nevada, New Mexico, and Texas.

• As of the last day of FY 2022, the Company-Owned Restaurants included in the data sets for Part 2 and Part 3 operated for an average of 9.5 years.

• The Company-Owned Restaurants are primarily standalone locations with square footage of 6,000 to 8,000 square feet.

• All of the company-owned Twin Peaks Restaurants, including the Company-Owned Restaurants, offer substantially the same products and services to customers the Franchised Restaurants are expected to offer.

• “AUV” means the annual unit volume calculated based upon the sales of the Company-Owned Restaurants included in the data set. The average, median, highest, and lowest AUVs include the total of all food sales and beverage sales, including liquor, wine and beer sales, and sales of promotional merchandise.

• Cost of Goods Sold includes the total costs of all food, bar mixes, liquor, wine, beer, and promotional merchandise and events. Cost of Goods Sold represents, on average, 27.2% of total sales.

• The average sales from alcoholic beverages (i.e., bar mixes, liquor, beer, and wine) was 46.8% of the total sales of the Company-Owned Restaurants. The average sales from food and merchandise and events was 53.2% of the total sales of the Company-Owned Restaurants.

• Twin Peaks purchases many items used in the operation of the company-owned Twin Peaks Restaurants under arrangements negotiated with suppliers and distributors which may permit it to purchase and have such food, beverage, supply, and other items delivered at a volume discount.

• Of the Company-Owned Restaurants, 12 (44.4%) met or exceeded the average cost of goods sold (i.e., had lower than average cost of goods).

• Labor costs includes costs for restaurant management and hourly personnel and includes benefits (including medical benefits for eligible personnel), training expenses (excluding management training expenses described below), payroll taxes, and bonuses.

• Labor costs does not include personnel employed by Twin Peaks at its headquarters or its field personnel that provide support services to company-owned and franchised Twin Peaks Restaurants (e.g., real estate, licensing and permitting, marketing support, information technology services, accounting services, and human resources).

• The cost of hiring and training personnel in connection with the commencement of company-owned Twin Peaks Restaurant operations is expensed in pre-opening costs as incurred in accordance with Twin Peaks’ customary accounting practices. For the purposes of this analysis, pre-opening expenses are excluded.

• Of the Company-Owned Restaurants, 11 (40.7%) of the Company-Owned Restaurants met or exceeded the average labor costs (i.e., had lower than average labor costs).

Section VI – Twin Peaks Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️