Steak Escape
Date Incorporation: 1996
Franchising Since: 1996
Headquarters: Ohio
Description: The franchised system is a comprehensive food service operation that specializes in the retail sale of specialty sandwiches, specialty salads, specialty potatoes, fresh-cut french fries and fresh squeezed lemonade and utilizes certain unique in-store merchandising techniques, with a strict adherence to uniform procedures to offer products of the highest quality.
Franchise Offer: The franchisor, Escape, is offering the right to operate restaurants under Escape's "Steak Escape®" and "Steak Escape Grille™" systems. The franchisor may offer a development agreement giving developers exclusive rights to open and operate a specific number of restaurants in a particular territory.
Financial Assistance: Escape has no program presently in place to provide for subleasing or guarantees on a general basis but may offer this option only in unique, limited situations in the future. Escape may lease restaurant premises directly from the landlord and sublease those premises to the franchisee or guarantee the lease which a franchisee entered into for restaurant premises.
Training and Assistance: Escape requires that the franchisee (or principle owner) and two managers must complete the initial training program to Escape's satisfaction before the opening of the franchised restaurant. All training is performed at Escape's headquarters in Columbus, Ohio. It consists of 74 hours of classroom training and 80 hours of ‘On-the-Job’ training.
Territory: The franchisee will not receive an exclusive territory. The franchise may face competition from other franchisees, from company-owned outlets, or from other channels of distribution or competitive brands controlled by the franchisor.
Term of Agreement and Renewal: The length of the franchise term is 20 years, with an option for renew for additional consecutive 20-year periods.
Obligations and Restrictions: The franchisee does not have to devote full time to the franchised business although Escape recommends that the franchisee participates actively in the business. However, the restaurant must be directly supervised at all times by one of two "on-premises" managers who have been certified by Escape as having successfully completed Escape's training program.
Total Number of Units: 128 outlets at the end of 2007
Total Number of franchises Units: 125 franchised outlets at the end of 2007
Investment Tables:
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Initial Training Expenses | $2,500 | $2,500 |
| Initial Inventory of Food, Paper Products and Misc. Supplies | $5,000 | $5,000 |
| Space Lease (Security Deposit and First Three Months' Rent) | Varies | Varies |
| Construction and Leasehold Improvements | $71,500 | $239,000 |
| Landlord Chargebacks | Varies | Varies |
| Exhaust Package | $10,000 | $20,000 |
| Fixtures and Equipment | $25,000 | $110,000 |
| Signs and Graphics | $7,000 | $15,000 |
| POS System | $5,000 | $25,000 |
| Lease Negotiation Legal Expenses | Varies | Varies |
| Architectural Services | $3,000 | $15,000 |
| Insurance | $2,000 | $4,000 |
| Uniforms | $1,200 | $1,200 |
| Advertising | $1,000 | $4,000 |
| Utility Deposits, Business Licenses, and Prepaid Expenses | $2,000 | $4,000 |
| Additional Funds - 3 months | $30,000 | $30,000 |
| Total | $190,200 | $499,700 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 6% of Gross Sales |
| Marketing Fund | Currently 0.5% of Gross Sales but subject to increase up to 2% |
| Customary Initial Training | No fee |
| Refresher and Remedial Training | You must pay Escape's then-current standard training fees, currently $100 per day per trainee. |
| Rent | Varies |
| Renewal | You must pay 50% of the then-current system standard initial franchise fee. |
| Transfer | Unless otherwise specified, the fee equals $10,000. For transfers to an existing franchisee in good standing, the fee equals $5,000. For transfers among existing franchise owners (change of ownership), the fee equals $2,000. |
| Interest on Late Payments | 5% over JP Morgan Chase Bank's prime rate |
| Administrative | $25 per day |
| Late Charges | 1% of Gross Sales |
| Service Charge | $25.00 per day |
| Review of Proposed New Supplier | Varies |
| Audit | You must pay costs of inspection or audit. Audit costs are estimated to range from $2,500 to $5,000. In addition, you must reimburse the costs of travel, lodging, and meals for the auditor(s). |
| Lease Expenses | Costs and expenses, including attorneys' fees, incurred by Escape for the lease for the restaurant. |
| Costs and Attorneys' Fees | Will vary under the circumstances |
| Indemnity | Will vary under the circumstances |
Date of FDD: 31/3/2008
The above information has been taken from the UFOC/FDD of Steak Escape
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