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Johnny Rockets Franchise Cost & Fees

Date of Incorporation: 1986

Franchising Since: 1987

Headquarters: Aliso Viejo, California

 

Business Description: A Johnny Rockets Restaurant offers a menu of lunch and dinner products featuring hamburgers made to order (fresh never frozen), American fries, chili, hand-dipped shakes and malts, classic sandwiches and other items served in the style of a classic Americana sit-down restaurant setting. Some Restaurants may serve breakfast, and some may serve beer and wine. The menu items offered at a Restaurant may vary depending on the size and location of the Restaurant. The Restaurants also offer for sale certain branded merchandise including clothing, souvenirs, and novelty items. Johnny Rockets Licensing, LLC, (also referred to as JRL) is the Franchisor.

 

Franchise Offer: The franchisee will operate a restaurant serving hamburgers, American fries, chili, hand-dipped shakes and malts, and other menu items in a classic Americana restaurant setting under the name "Johnny Rockets," and "Johnny Rockets the Original Hamburger." Restaurants operate in several types of venues, typically in high traffic/high density areas, such as entertainment centers, tourist areas, specialty/lifestyle centers and downtown shopping districts. A Johnny Rockets Sports Lounge is different from a Johnny Rockets Restaurant. Specifically, the Johnny Rockets Sports Lounge's design, layout and atmosphere are similar to a typical sports bar. A Johnny Rockets Sports Lounge will usually operate in limited types of venues including amusement parks, hotels and other entertainment oriented venues.

 

Financial Assistance: JRL does not offer direct or indirect financing. JRL does not guarantee the franchisee’s note, lease or other obligations.

 

Training and Assistance: The Initial Restaurant Management Training Program for a Restaurant will last approximately four weeks and will include 24 shifts consisting of classroom and on-the-job training and self-study modules and applications. The Initial Restaurant Management Training Program will cover the procedures necessary to properly operate a Restaurant. The training will be offered at one the company certified training restaurants across the country. The location and duration of the training may be altered by based upon the franchisee’s training needs and other factors including the availability of a certified training restaurant. Training topics for include, but are not limited to, guest relations, positional training, marketing, human resource functions, health and sanitation requirements, leadership, hiring, staffing, profit and loss analysis, food cost controls, safety, purchasing, and Operational Systems Management, including use of the extranet and other computer based management and operational tools. In addition to the Initial Restaurant Management Training Program described, immediately before and after the opening of the Restaurant, JRL offers to franchisees, free of cost, the assistance of up to three operational representatives at their Restaurant for up to five days before and five days after they open their Restaurant or as otherwise deemed necessary by JRL to assist in all phases of opening the Restaurant. Ongoing training is held as designated by JRL. As a part of ongoing training, JRL may hold a Franchise Conference once each year and Webinars, as necessary. Franchisees are required to attend the Johnny Rockets Franchise Conference held during their first year of operation, and thereafter are required to attend at least three Franchise Conferences in any five year period.

 

Territory: The license granted under the Restaurant Franchise Agreement to use the Marks is nonexclusive. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that owned by JRL, or from other channels of distribution or competitive brands controlled by JRL.

 

Term of Agreement and Renewal: The Initial Term will be 10 years commencing on the date the franchisee opens the Restaurant for business. If the franchisee is in good standing, he or she can renew for two additional periods of five years each.

 

Obligations and Restrictions: If franchisees operate a Restaurant, they must be personally involved in the operation of the Restaurant on a full-time basis; however, they may delegate the day-to-day management responsibilities to a manager. The franchisee and three additional persons designated by the franchisee as managers or assistant managers responsible for the operation of your Restaurant must complete the training course. During the term of the Restaurant Franchise Agreement, the franchisee or an officer, director, shareholder, member, partner, Control Person, trustee or equity owner of the franchisee’s legal entity approved by JRL, or a manager or assistant manager who has attended the Restaurant Management Training Program and who has been approved by JRL must spend a minimum of 40 hours per week at the Restaurant overseeing and supervising the operation of the Restaurant. The franchisee must devote at least eight hours per week of physical presence at the Restaurant during open and operating hours. In addition, the franchisee must designate a sufficient number of assistant managers to assure that the franchisee, a manager or an assistant manager are on the premises of the Restaurant actually supervising the operation of the Restaurant during all open and operating hours.

 

Estimated Number of Units: 300

 

Investment Tables:

Initial Investment

Name of Fee Low High
Initial Franchise Fee $49,000 $49,000
Architectural Design $13,500 $21,000
Leasehold Improvements $175,000 $400,000
Furniture, Fixtures and Equipment $141,000 $185,000
Interior Decor Package $3,000 $6,000
Signs (Interior and Exterior) $20,000 $50,000
Information and Technology Systems POS System $14,000 $27,000
Gift Card Program Equipment $25 $575
Smallwares $12,000 $17,000
Initial Inventory $4,000 $6,000
Real Estate and Security Deposits $10,000 $18,000
Insurance and Performance Bonds $2,000 $6,000
Music System $8,000 $18,000
Training $18,000 $21,000
Pre-Opening Labor $14,000 $22,000
Grand Opening Marketing Support $5,000 $25,000
Liquor License $4,000 $45,000
Miscellaneous (Legal, accounting, licenses, permits, etc.) $7,000 $14,000
Additional Funds (Initial Period - 3 months) $40,000 $60,000
Estimated Totals $539,525 $975,575

 

Other Fees:

Type of Fee Amount
Weekly Royalty Fee 5% of Gross Sales.
Weekly Marketing Fee Up to 4% of Gross Sales. Currently, the Weekly Marketing Fee is 1.75%, but may increase the fee to an amount not to exceed 4.0%.
Cooperative Advertising Up to 3% of Weekly Gross Sales.
Local Advertising 2% of Weekly Gross Sales.
Renewal Fee The lower of:
(i) the Initial Franchise Fee paid when the franchisee signed the Restaurant Franchise Agreement; or
(ii) 25% of the Initial Franchise Fee then being charged by JRL to new Franchisees.
Reimbursement of Insurance Costs Cost of obtaining coverage.
Reimbursement of Repair Costs Cost of repairs.
Transfer Fee $5,000
Audit All amounts shown to be due, plus
(i) interest equal to the lower of the maximum rate permitted by law or 15% per annum of the deficient amount;
(ii) a penalty in an amount equal to 10% of the deficient amount; and
(iii) the cost of the audit. If the deficient amount is not paid within five days after the franchisee’s receipt of JRL’s demand, interest as described in (i) above will begin to accrue on the penalty described in (ii) above.
Late Charges The greater of:
(i) 10% of the amount due, or
(ii) $250, plus interest at the lower of the maximum rate permitted by law or 15% of the amount past due from the date a payment was due until it is paid.
Damages for Employee Raiding $100,000
Costs and Attorneys Fees JRL's costs and expenses.
Indemnification The losses and expenses incurred by JRL.
Supplier Review Fee The franchisee must reimburse JRL for all costs and expenses incurred by JRL in reviewing or approving a supplier proposed by the franchisee, including any travel and lodging expenses JRL incurs.
Taxes The franchisee must reimburse JRL for any state or local taxes imposed on JRL as a result of JRL’s receipt or accrual of the Initial Franchise Fee, Weekly Royalty Fee, Weekly Marketing Fee or other fees JRL collects under the terms of the Franchise Agreement.

The above information has been taken from the FDD of Johnny Rockets. Year of FDD: 2013

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