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Culver’s Franchise Costs & Fees

Date of Incorporation: 1984
Franchising Since: 1988
Headquarters: Prairie du Sac, Wisconsin

Business Description: Culver Franchising System, Inc. is the franchisor. Culver’s restaurants offering burgers, sandwiches, salads, dinners, frozen custard desserts, beverages and other menu items in a quick-service setting.

Franchise Offer: The franchisor grants franchisees the right to operate a Culver’s restaurant within a certain geographic area.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not receive payments or other consideration for the placing of financing or guarantee any note, lease or other obligation franchisees may enter into or incur.

Training and Assistance: Before opening the Restaurant, the management team at the Restaurant, which in addition to franchisees will typically include 6 individuals, must have attended and completed an approved Culver’s Manager in Training Program to the franchisor’s satisfaction. All managers must be certified in their state’s sanitation program, the ServSafe equivalent, or, if no state requirement exists, in the national sanitation program. Each Restaurant must have a minimum of one management team member working each shift who is certified in the appropriate sanitation program, as described above. In addition, the Operator must complete the franchisor’s full-time, 16-week Management Training Program to its satisfaction, at one of the franchisor’s designated company-owned Restaurants. Franchisees and their managing shareholder or partner and/or managers must attend or participate in any periodic reconnection training courses or programs that the franchisor designates. In addition to the training courses and programs the franchisor provides, franchisees must participate in an electronic training program accessible via the Internet that it develops or select for the System, including all future updates, supplements or modifications.

Territory: Under the Franchise Agreement, franchisees may only operate their Restaurant at a specific location. If at the time that franchisees sign their Franchise Agreement, there are less than 40,000 people who live within a 2 mile radius of the location of their Restaurant and there are less than 40,000 people who work within a 2 mile radius of the location of their Restaurant, franchisees will receive a “Designated Territory” that will be a 3 mile radius around the location of their Restaurant, which area may be smaller if such area contains a natural barrier (e.g. a river).

Term of Agreement and Renewal: The length of the initial franchise term is 15 years. If franchisees are in good standing, they can renew the Franchise Agreement for one additional term of 10 years.

Obligations and Restrictions: If franchisees are an individual, they must be the full-time on-site owner-operator and personally manage the Restaurant unless they receive the franchisor’s prior consent to delegate their authority to do so. If franchisees operate more than one Restaurant, they may delegate certain management duties for additional Restaurants to one or more managers that the franchisor approves. If franchisees are a corporate entity or a partnership, one individual (the Operator) must retain at least 50% of the equity and voting interest in the corporate entity or partnership and will be obligated to be the full-time on-site Operator who personally manages the Restaurant. In the alternative, one individual Operator may retain at least 25% of the equity and voting interest in the corporate entity or partnership, so long as that individual also has at least 25% ownership in the building and real estate, and he or she must be the full-time on-site Operator and personally manage the Restaurant. If franchisees are a corporate entity or a partnership, they must indicate the ownership structure and identify the ownership interests on the Certification of Business Entity. Franchisees must offer and sell all, and only, those goods and services that the franchisor has approved. Except for off-site sales that the franchisor specifically agrees to in writing, franchisees may serve customers only from the Restaurant they have been authorized to operate.

Estimated Number of Units: 575

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $20,000 $55,000
Land $225,000 $1,600,000
Building $980,000 $1,550,000
Travel, Living and Expenses during Training $20,000 $80,000
Initial Inventory $35,000 $45,000
Furniture, Fixtures, Equipment and Supplies $495,000 $685,000
Miscellaneous Expenses $20,000 $40,000
Additional Funds (working capital for 3 months) $50,000 $100,000
ESTIMATED TOTAL $1,845,000 $4,155,000
Other Fees
Type of Fee Amount
Service Fee 4% of Gross Sales.
Advertising Fee 2.5% of Gross Sales.
Cooperative Advertising Up to 4% of the Gross Sales, as approved by a majority vote of the members of the Co-op Advertising Region.
Additional Training $1,000 per person.
E-Learning Program Currently $255 per quarter.
Additional Assistance $500 per week.
Site Review Site $300 per site after four site reviews.
Custom Design Fee Up to $5,000
Extraordinary Building Assistance Fee Up to $30,000
Building Conversion Fee Up to $5,000
Excessive Site Location Design Fee $500 per site location after four site locations.
Transfer Fee $10,000 plus our attorneys’ fees;
$5,000 plus our attorneys’ fees if the buyer is an existing franchisee.
Renewal $30,000
Insurance Will vary under the circumstances.
Audit Cost of inspection or audit.
Interest Lesser of 1.5% per month or highest contract rate of interest allowed by law.
Management Fee To be determined under circumstances.
Gift Card Fees Currently $.20 cents per redeemed transaction.
Indemnification Will vary under the circumstances.
Costs and Attorney's Fees Will vary under the circumstances.
Supplier Payments Will vary under the circumstances.
Testing Cost of Testing.
Relocation Expenses Costs of relocation.
Technology Fee Estimated $200 per month.
Development Schedule Extension Fee $5,000 per Restaurant for an extension of up to 6 months.
Development Agreement Termination Fee $10,000 for each Restaurant to be developed under the franchisee’s Development Schedule for which they have not signed a Franchise Agreement or paid an initial franchise fee.
Territory Reservation Extension Fee $10,000

The above information has been taken from the FDD of Culver’s. Year of FDD: 2016

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