Romano's Macaroni Grill
Date Incorporation: 1983
Franchising Since: 2002
Headquarters: Texas
Description: Romano's Macaroni Grill restaurants are full service restaurants featuring an upscale Italian menu and a full service bar, in an informal ambiance with an exposed kitchen including wood-burning ovens, sous stations and rotisseries.
Franchise Offer: The franchisor offers a development agreement which grants the right to establish 1 or more Romano's Macaroni Grill restaurants, and a separate franchise agreement for each restaurant established under the terms of the development schedule.
Financial Assistance: The franchisor does not offer direct or indirect financing.
Training and Assistance: The managing owner or operating partner and 5 of the managers (one restaurant) or 10 of the franchisee’s managers (two or more restaurants) must attend and complete the initial management training program. The initial training program will generally last 12 to 16 weeks, at a certified training restaurant. Training consists of 92 hours of classroom training and 555-640 hours of ‘On-the-Job’ training.
Territory: The franchisee will not receive an exclusive territory.
Term of Agreement and Renewal: The length of the franchise term is 20 years, with an option for renew for a successive 20 years.
Obligations and Restrictions: The franchisee, managing owner and operating partner must devote full time and best efforts to the daily operation of the restaurant.
Total Number of Units: 230 outlets at the end of 2007
Total Number of franchises Units: 13 franchised outlets at the end of 2007
Investment Tables:
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| Initial Franchise Fee | $40,000 | $40,000 |
| Leasehold Expense | $5,500 | $30,000 |
| Pre-Construction | $60,000 | $400,000 |
| Construction Costs | $900,000 | $ 1,900,000 |
| Site Work | $123,000 | $750,000 |
| Exterior Signage | $20,000 | $45,000 |
| Furniture/Fixtures | $55,000 | $95,000 |
| Kitchen/Bar Equipment | $285,000 | $360,000 |
| Opening Advertising | $10,000 | $ 12,000 |
| Initial Training | $58,680 | $335,230 |
| Opening Team Costs | $70,000 | $ 130,000 |
| Working Capital | $15,000 | $25,000 |
| Inventory | $15,000 | $25,000 |
| Bar/Kitchen Accessories | $35,000 | $55,000 |
| Liquor License | Varies | Varies |
| System Installation | $30,000 | $45,000 |
| Additional Funds (3 months) | $525,000 | $750,000 |
| TOTAL | $2,247,180 | $4,997,230 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 4% of Gross Sales |
| Advertising Production Fee | .5% of Gross Sales |
| Local Advertising Program (LAP) Fee | 2.5% of Gross Sales |
| Regional Advertising (RAP) Fee | Currently, none Maximum - 4% of Gross Sales |
| National Advertising (NAP) Fee | Currently, none Maximum - 4% of Gross Sales |
| Supplemental Marketing Programs | Varies |
| Replacement and Supplemental Training | Currently, $3,500, plus costs of personnel attending training. |
| Product Testing Fee | Less than $1,500 per product annually typically charged to the supplier; additional product testing may be required due to specification non-compliance. |
| Supplier Facility Inspection | Currently, approximately $ 1,025/day plus travel expenses normally charged to the supplier or distributor |
| Licensing Fees | Currently, none |
| Restaurant Inspection | Approximately $240 per visit if the franchisee does not receive a passing grade. There is no charge for a grade of 90% or higher. |
| Transfer | Franchise/Development Agreements-$5,000 or any greater amount necessary to reimburse for our expenses, with a single transfer maximum of $25,000 |
| Offering | Franchise/Development Agreements — $10,000 |
| Audit | Cost of audit, including travel, lodging, wages, and legal and accounting costs. |
| Interest | Lesser of 18% per annum or maximum legal rate. |
| Indemnification | Will vary depending on loss. |
| Enforcement Costs | Will vary. |
| Liquidated Damages for Unauthorized Solicitation of Employees | Three (3) times the employee's salary plus enforcement costs |
| Liquidated Damages for Failure to Meet Development Schedule | $10,000/month Maximum period: 1 year |
| Relocation or Reconstruction | Minimum royalty agreed |
| Warehouse/decor products | The price charged for the items plus a 12% administration fee. |
| Gift Cards | Approximately $ 1500/year/restaurant |
Date of FDD: 26/09/2007
The above information has been taken from the UFOC/FDD of Romano’s Macaroni Grill
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