Exploring the Cost of a Zaxby’s Crypto Franchise

• Zaxby's: A Fast-Casual Franchise Specializing in Chicken Delicacies
• Key Financial Aspects to Open a Zaxby's Franchise
• Initial Franchise Fee and Other Requirements
• Total Investment Estimate
• Ongoing Fees
• Revenue Expectations for Zaxby's Franchise Owners
• Pros and Cons of Owning a Zaxby's Franchise
• Advantages
• Risks
• Final Thoughts on Zaxby's Franchising Opportunity

Zaxby's: A Fast-Casual Franchise Specializing in Chicken Delicacies

Having been established in 1990, Zaxby's is a fast-casual restaurant franchise based in Athens, Georgia. It has garnered fame for its specialties that include chicken fingers, wings, sandwiches, and salads. The first restaurant was inaugurated close to Georgia Southern University by Zach McLeroy and Tony Townley, two friends since childhood, and quickly became a hit among the students. Zaxby's expanded its reach via franchising, beginning in 1994. Currently, there are more than 900 Zaxby's locations across the Southeast and outside of it too.

Key Financial Aspects to Open a Zaxby's Franchise

Initial Franchise Fee and Other Requirements

An upfront franchise fee of $35,000 is applicable for opening a Zaxby's outlet. Additionally, prospective franchisees are required to possess minimum liquid assets worth $500,000 and a net worth of $1 million. It is noteworthy that veterans of the U.S. military are eligible for a 20% discount on the franchise fee owing to Zaxby's participation in the VetFran program run by the International Franchise Association. For those intending to operate under a development agreement that includes multiple locations, half of the total franchise fees applicable for those units would be payable upfront as a development fee.

Total Investment Estimate

Zaxby's 2023 Franchise Disclosure Document (FDD) states that the total investment to establish a new restaurant might range from $1.39 million to $3.27 million. The costs encompass building construction, kitchen equipment, signage, marketing assets, initial food inventory, staff uniforms, operational capital for the initial months, and all training expenses.

Ongoing Fees

Franchisees are also obliged to factor in the following ongoing monthly fees into their operating budget: Zaxby's corporate may additionally impose various one-time fees for late payments, ownership transfers, legal costs for dispute resolution, renewal arrangements, and more.

Revenue Expectations for Zaxby's Franchise Owners

Financial performance data submitted by over 700 Zaxby's locations in 2021 showcased an average gross revenue of approximately $2.54 million. However, like any restaurant, the sales volumes can greatly vary depending on the trading area, population, level of competition, and operational expertise. Some well-operated units have reported substantially higher returns. For instance, a franchisee who appeared on the Franchise Empires podcast operates 14 Zaxby's locations, including the top-performing restaurant company-wide that recorded over $5.3 million in gross revenue the previous year.

Pros and Cons of Owning a Zaxby's Franchise

Advantages

Investing in a Zaxby's Franchise offers several benefits such as the established brand reputation built around savory chicken meals, salads, and signature dipping sauces. Franchisees can benefit from sophisticated corporate systems for site selection, vendor relationships, and localized marketing campaigns driven by area cooperatives. Zaxby's also extends active support to its new franchise partners through a comprehensive initial training program along with ongoing coaching and conferences. Leveraging Zaxby's 30-plus years of business experience in the chicken sector, franchise owners can manage the costs in fluctuating poultry markets. Furthermore, as a regional chain strongly based in the Southeast U.S., Zaxby's has potential for targeted expansion before reaching brand saturation. This allows incoming franchisees to secure favorable trade zones with limited nearby competitors.

Risks

On the flip side, Zaxby's regional nature also means a smaller footprint compared to national quick-service chains like McDonald's or Subway. Franchisees wishing to open restaurants outside Zaxby's core southern geography could face extra challenges in introducing the brand in new areas. Running any restaurant franchise has inherent challenges including managing food costs, recruitment and retention of staff, keeping up with evolving technology, and adjusting to changing consumer preferences. As a franchisee, major decisions concerning pricing, menus, and suppliers are mostly controlled by the parent company.

Final Thoughts on Zaxby's Franchising Opportunity

Over three decades, Zaxby's has carved a niche for itself by serving high-quality chicken meals along with its array of unique dipping sauces. The franchise exhibits strong financials in comparison with other quick-service concepts. Meanwhile, the core menu has remained loyal to customer favorites without overexpanding options that may complicate operations. Those seriously considering Zaxby's franchise opportunity should comprehensively

Edited by Jonathan Stoker