Golden Corral

Date of Incorporation: 1973

Franchising Since: 1986

Headquarters: Raleigh, North Carolina

 

Business Description: Golden Corral Franchising Systems, Inc. is the franchisor. Golden Corral Restaurants usually are situated in a free-standing building, with accompanying ample parking, and may be located in a rural or urban setting, a suburban location near a shopping mall, or in a strip shopping center. Restaurants come in three basic designs.

Franchise Offer: Golden Corral offers franchises to an individual, group of individuals, corporation, limited liability company, or partnership for a family-oriented buffet/grill style restaurant which features a wide variety of beef, pork, seafood, chicken, cold salads, vegetables, desserts at an in-store display bakery, and other food and beverage items for lunch, dinner, weekend breakfast (daily breakfast offered in some restaurants), and snacks.

Financial Assistance: Golden Corral does not offer direct or indirect financing, nor does it guarantee a franchisee’s note, lease or other obligations.

Training and Assistance: Golden Corral's initial training program for managers requires approximately 10 weeks to complete, and must be attended by each of the managers (general manager, associate manager-kitchen, and associate manager-service) prior to the opening of the Restaurant. The initial training program is divided into separate levels. Levels 1 and 3 involve in-store training, while Level 2 involves classroom training. Approximately eight to 16 of the Restaurant's employees who are paid on an hourly wage basis, such as meat cutters, bakers, cooks and servers, must participate in an on-the-job training program. This training program will involve approximately 20 to 60 hours, depending on the trainee's job classification, at an operating Restaurant. Immediately before, during, and after the opening of a Restaurant, Golden Corral will provide personnel from other Golden Corral Restaurants, referred to as the “A-Team,” and who will work at the Restaurant for such length of time as Golden Corral, in its sole discretion, deems necessary to assist in training and preparing the non-managerial employees for opening and operating the Restaurant.

Territory: During the term of the Franchise Agreement, Golden Corral will not establish and operate, nor license anyone else to establish and operate, a Restaurant under the Proprietary Marks and the System within a stated distance of the Restaurant (the “Protected Territory”), as described in the Franchise Agreement, except in the types of facilities excluded from the Protected Territory. The factors affecting the size of the Protected Territory will be demographic factors, concentration of other businesses in the vicinity, existing and potential restaurant competition, projections of growth in the area, and the economic environment. Except for unique facilities like an airport terminal, military base, etc., all franchisees will receive a Protected Territory. The Protected Territory usually will be described as a radius from the Restaurant that will vary from 1/20th of a mile to five miles in large metropolitan locations, and from one to five miles in other localities.

Term of Agreement and Renewal: The length of initial franchise term is from the date of agreement execution through the 15th anniversary date of the Restaurant's opening. The franchisee has two renewal terms of five years each, subject to contractual prerequisites.

Obligations and Restrictions: The franchisee (or if a corporation, limited liability company, partnership, or other entity, a principal who has been approved by Golden Corral as the Operations Principal) must devote full time, energy, and best efforts to the management and operation of the Restaurant or, in the case of a developer, to the management of the business. The Restaurant and business must be under the direct supervision of the franchisee or the Operations Principal. Any Operations Principal must possess an equity ownership interest of at least 51% of the developer and/or franchisee for which it serves as the Operations Principal. Unless the business is organized as a sole proprietorship, the franchisee must designate an individual to act as the franchisee’s spokesperson who will have full authority to speak on his/her behalf and bind and commit the franchisee with respect to all of his/her rights, obligations, and performance under the Franchise Agreement. Once the spokesperson is selected he/she cannot be changed without Golden Corral’s prior written consent. During the term of the Franchise Agreement, the franchisee must use the Restaurant premises solely for the operation of the Restaurant; must keep the Restaurant open and in normal operation for such minimum hours and days as Golden Corral may specify in the Manual or otherwise in writing at such times as it may determine; and must refrain from using or permitting the use of the premises for any other purpose or activity at any time without first obtaining the written consent of Golden Corral.

Estimated Number of Units: 400

Investment Tables:

Initial Investment

GC-10 Restaurant

Name of Fee Low High
Initial Franchise Fee $50,000
Purchase of Land $1,200,000 $2,700,000
Construction, Contractor Site Preparation, Leasehold Improvements $1,270,000 $2,550,000
Signage $47,000 $94,000
Furniture and Equipment $708,000 $885,000
Opening Advertising $10,000 $15,000
Initial Training $50,100 $143,000
On-Site Assistance Costs $24,600 $91,500
Inventory $55,000 $90,000
Insurance $14,000 $25,000
Additional Funds (Estimated expenditures during the first 3 months of operation) $19,000 $113,000
ESTIMATED TOTAL $3,447,700 $6,756,500

GC-11M Restaurant

Name of Fee Low High
Initial Franchise Fee $50,000
Purchase of Land $900,000 $2,300,000
Construction, Contractor Site Preparation, Leasehold Improvements $1,170,000 $2,400,000
Signage $45,000 $88,000
Furniture and Equipment $648,000 $736,000
Opening Advertising $10,000 $15,000
Initial Training $50,100 $143,000
On-Site Assistance Costs $24,600 $83,200
Inventory $50,000 $80,000
Insurance $12,000 $22,500
Additional Funds (Estimated expenditures during the first 3 months of operation) $19,000 $110,000
ESTIMATED TOTAL $2,978,700 $6,027,700

GS-11S Restaurant

Name of Fee Low High
Initial Franchise Fee $50,000
Purchase of Land $400,000 $1,300,000
Construction, Contractor Site Preparation, Leasehold Improvements $780,000 $1,800,000
Signage $45,000 $77,000
Furniture and Equipment $549,000 $642,000
Opening Advertising $10,000 $15,000
Initial Training $50,100 $143,000
On-Site Assistance Costs $18,400 $75,000
Inventory $40,000 $75,000
Insurance $10,000 $15,000
Additional Funds (Estimated expenditures during the first 3 months of operation) $19,000 $110,000
ESTIMATED TOTAL $1,971,500 $4,302,000

 

Ongoing fees

Type of Fee Amount
Royalty 4% of Gross Sales
Advertising Contributions 2% - 6% of Gross Sales. Currently 2.4%
Transfer Franchisees pay 5% of the then-current initial franchise fee.
Securities Offering The greater of the franchisor's reasonable costs and expenses to review the securities offering or $10,000.
Renewal The then-current initial franchise fee applicable to the Restaurant design being renewed divided by number of years in the initial term under the then-current franchise term multiplied by five.
Audit by Franchisor Cost of Audit
Late Fee for Overdue Payments $75
Interest on Overdue Payments Lesser of 1.5% per month (calculated daily) or maximum legal rate.
Additional Training $700 per additional manager plus the cost of materials which are currently $185.
Site Selection Reasonable expenses (including travel, meals, and lodging).
Costs and Attorneys' Fees Will vary under circumstances.
Indemnification Will vary under circumstances.
Relocation Fee The then-current initial franchise fee less unamortized portion of the previously paid initial franchise fee.
Approval if New Products or Suppliers Will vary depending on circumstances.
Operation and Maintenance of Computer System Varies depending on agreements selected.

The above information has been compiled from the FDD of Golden Corral.
Year of FDD: 2012.

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