McAlister's Deli
Date Incorporation: 1999
Franchising Since: 1994
Headquarters: Mississippi
Description: Full-size and non-traditional quick casual restaurant franchises offering counter service, on-premises dining and take-out services featuring a complete or limited line of deli foods, including hot and cold deli sandwiches, baked potatoes, salads, soups, desserts, iced tea and other food and beverage products under the name "McAlister's Deli" or "McAlister's Select".
Franchise Offer: The franchise offer includes the grant of full-size and non-traditional franchises for the establishment, development and operation of quick-casual restaurants providing counter service with carry-out and on-premises dining, featuring a complete or limited line of deli foods, all prepared in accordance with specified recipes and procedures. The franchisor offers a franchise for a single deli restaurant under a McAlister's Deli franchise agreement and a franchise for a single select restaurant under a McAlister's Select franchise agreement. The franchisor also offers the option to develop and operate a minimum of 3 deli restaurants under a McAlister's area development agreement.
Financial Assistance: The franchisor does not offer any direct or indirect financing.
Training and Assistance: The franchisor will provide training for the franchisee and up to 3 employees for a Deli Restaurant and the franchisee and 1 employee for a Select Restaurant before operations begin at the Franchised Restaurant. The duration of the initial training is approximately 8 to 10 weeks.
Territory: For a Deli restaurant, the franchisee will receive an exclusive territory. The typical territory will include a population base of approximately 30,000 people.
For a Select restaurant, the franchisee will not receive an exclusive territory, designated area or any territorial protections. If the franchisee enters into an area development agreement, they will be granted a specific territory in which they will develop franchised restaurants.
Term of Agreement and Renewal: The term of the agreement is 10 years and can be renewed for up to 3 additional successive terms of 5 years each, if certain conditions are met.
Obligations and Restrictions: The franchisee or a trained and competent employee acting as a full-time manager must directly supervise the franchised restaurant at all times. Even if the franchisee employs a full-time manager, however, the franchisee must supervise the operations of the franchised restaurant. The franchisee must offer and sell only those goods and services approved by the franchisor. They must use only displays, trays, napkins, boxes, bags, wrapping paper, labels, forms and other paper and plastic products imprinted with the McAlister’s brand and colors.
Total Number of Units: 249 units by year end 2007
Total Number of franchises Units: 226 franchised units by year end 2007
Investment Tables:
Initial Investment:
Existing Deli restaurant
| Expenditures | Low | High |
|---|---|---|
| Franchise Fee | $20,000 | $40,000 |
| Rent | $18,000 | $50,000 |
| Leasehold improvements | $175,000 | $500,000 |
| Furniture, Fixtures & Equipment | $120,000 | $175,000 |
| Signage | $20,000 | $50,000 |
| POS system | $15,000 | $35,000 |
| Initial inventory | $8,000 | $15,000 |
| Insurance | $2,500 | $10,000 |
| Training | $10,000 | $20,000 |
| Prepaid expenses | $10,000 | $15,000 |
| Grand opening advertising | $4,000 | $4,000 |
| Additional Funds (3 months) | $25,000 | $50,000 |
| Total | $417,500 | $949,000 |
New Deli restaurant
| Expenditures | Low | High |
|---|---|---|
| Franchise Fee | $20,000 | $40,000 |
| Land | $250,000 | $500,000 |
| Site work and parking lot | $60,000 | $125,000 |
| Building and pad | $360,000 | $500,000 |
| Furniture, Fixtures & Equipment | $120,000 | $200,000 |
| Signage | $25,000 | $60,000 |
| POS system | $15,000 | $35,000 |
| Initial inventory | $8,000 | $15,000 |
| Insurance | $2,500 | $10,000 |
| Training | $10,000 | $20,000 |
| Prepaid expenses | $1,000 | $2,500 |
| Grand opening advertising | $4,000 | $4,000 |
| Additional Funds (3 months) | $25,000 | $50,000 |
| Total | $899,500 | $1,559,000 |
Select restaurant
| Expenditures | Low | High |
|---|---|---|
| Franchise Fee | $25,000 | $25,000 |
| Rent | $3,500 | $20,000 |
| Leasehold improvements | $60,000 | $175,000 |
| Furniture, Fixtures & Equipment | $50,000 | $90,000 |
| Signage | $9,000 | $20,000 |
| POS system | $15,000 | $20,000 |
| Initial inventory | $5,000 | $10,000 |
| Insurance | $2,500 | $10,000 |
| Training | $5,000 | $10,000 |
| Prepaid expenses | $10,000 | $15,000 |
| Grand opening advertising | $1,000 | $1,000 |
| Additional Funds (3 months) | $15,000 | $30,000 |
| Total | $191,000 | $411,000 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Royalty Fee | 5% of gross sales |
| Advertising fund | Up to 3% of gross sales |
| Local advertising | 0% - 1% of gross sales |
| Cooperative advertising | Pro rata share of total expenditures split between all restaurants in the cooperative based upon prior 12 month sales |
| Refurbishing | Reasonable capital expenditures |
| Continuing education and refresher training | You must pay your expenses as well as your employee's expenses in attending these programs |
Date of FDD: April 30 2008
The above information has been taken from the UFOC/FDD of McAlister's Deli
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