5 & Diner
Date Incorporation: 1993
Franchising Since: 1995
Headquarters: Arizona
Description: 5 & DINER sells restaurant franchises specializing in providing a 1950s diner's theme and ambiance serving burgers, shakes and other quality prepared food items in a casual dining atmosphere.
Franchise Offer: There are two different franchise agreements:
Single Franchise: 5 & Diner franchises the right to operate a 5 & Diner style restaurant with the right to use the trade name "5 & Diner".
Area Development Agreement available to develop multiple restaurants within a specific described geographic territory.
Financial Assistance: The franchisor does not offer any financial assistance nor do they guarantee any note lease or obligation.
Training and Assistance: The mandatory initial training program will last approximately 4 weeks consisting of the following subjects: The initial training program will be conducted for a maximum of 4 of the franchisee's employees, including the manager, assistant manager and kitchen manager, who must be directly involved in the daily operations of the restaurant. 5 & Diner will provide the franchisee with supervisory assistance at his/her restaurant in connection with the opening and initial operation of his/her restaurant, generally for one week pre-opening assistance and one week post-opening assistance, at no cost to the franchisee. 5 & Diner will provide the franchisee with operating procedures including a financial recordkeeping system and controls, personnel policies, production methods and approved sources of supplies.
Territory: Single franchise: The Franchise Agreement grants the franchisee the right to operate a 5 & Diner restaurant at a single location that he/she select and the franchisor approves. The franchisee must operate the restaurant only at the approved location and may not relocate the restaurant without first obtaining 5 & Diner's written consent. The approved location for the restaurant must be within the exclusive area granted to the franchisee by the Franchise Agreement.
Area Development: The Area Development Agreement grants the franchisee certain rights within a designated geographic area. The size of the exclusive area may be a single or multi-county area, single state area or some other area, with a minimum population of 50,000. The exclusive area will be determined by the franchisor based on various market and economic factors.
Term of Agreement and Renewal: The term of the franchise agreement is 20 years with an additional term of 10 years if the franchisee is in good standing.
Obligations and Restrictions: The 5 & Diner restaurant must at all times be under the direct, day-to-day, full-time supervision of the franchisee or an operating manager who 5 & Diner approves and who has satisfactorily completed 5 & Diner's training program. The franchisee must comply with all of the standards and specifications (including brand specifications and brand identity) relating to the purchase and sale of approved food products and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment, (including electronic cash register, computer hardware and software) and other products used or sold at the restaurant.
Total Number of Units: 15 units by year end 2007
Total Number of franchises Units: 14 franchised units by year end 2007
Investment Tables:
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| Initial Franchise Fee | $35,000 | $35,000 |
| Lease Deposits & Utilities | $6,000 | $16,000 |
| POS System Fees | $22,00 | $28,000 |
| Diner Building | $400,000 | $460,000 |
| Equipment, Furnishings | $250,000 | $352,000 |
| Site Preparation | $50,000 | $150,000 |
| Advertising | $5,000 | $5,000 |
| Inventory, Supplies & Miscellaneous Equipment | $9,000 | $15,000 |
| Building and Liability Insurance | $4,400 | $5,500 |
| Travel and Living Expenses While Training | $3,000 | $7,000 |
| Additional Funds -3 Months | $62,000 | $75,000 |
| Total | $846,400 | $1,148,500 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 5% of total gross sales |
| National Advertising and Promotional Fund | 2% of total gross sales |
| Local and Regional Advertising | 3% of total gross sales |
| Computer/Software Upgrades | $22,000 to $28,000 |
| Audit Fee | Delinquency of royalty fees and advertising contributions plus interest from the date due, unless an understatement of Gross Sales exceeds 2% in which case you must pay for the cost of the audit. The cost of an audit based on rates currently charged by a public accounting firm in Phoenix, Arizona is $140 per hour |
| Management services | Per diem of $400 |
| Transfer, Sale or Assignment | The greater of $5,000 or 5 & Diner's reasonable expenses in reviewing and approving a transfer, sale or assignment |
| Relocation | $5,000 |
| Public Offering | $3,500 |
| Interest | Lesser of prime rate plus 3% or highest rate allowed by applicable law. |
The above information has been taken from the UFOC/FDD of 5 & Diner
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