Shakey's
Date Incorporation: 2004
Franchising Since: 2004
Headquarters: California
Description: Shakey's restaurants serve pizza (thin, pan or gourmet), salad, chicken, potatoes, pastas and beverages, including beer and wine, where permissible. Shakey's restaurants offer quality meals in a pleasant, entertaining family atmosphere. Shakey's restaurants are usually quick-service or buffet-style. Additionally, a redemption game room, with prizes, provides an entertainment venue for adults and children.
Franchise Offer: The franchisor grants franchises for the Shakey's Pizza Parlor concept. They also offer to qualified persons rights to develop and operate a minimum of 3 Shakey's restaurants in a defined geographic area under an area development agreement.
Financial Assistance: The franchisor does not offer, directly or indirectly, any arrangements for financing the initial investment or the operation of the franchise.
Training and Assistance: Before the opening of the Shakey's restaurant, the franchisee and their management team will be required to successfully complete the management training program. A management team consists of at least 3 management people who will be in a "hands on" role on a daily basis in the restaurant. The management training program is a combination of classroom style and hands on training over an 8-week period. The management training program will be offered as needed at or near the franchisors’ corporate headquarters located in Alhambra, California. Hands-on training will be conducted in a certified Shakey's training location.
The franchisor will provide on-site assistance, for a period of no less than 7 days, some of which may be pre-opening and some after the restaurant opens to the public.
The franchisor will help with site selection as well as plans and specifications for the restaurant. The franchisor will also assist the franchisee in preparing development guidelines and periodically inspect the site during development.
Territory: Under the franchise agreement, the franchise is granted for a specific site. The franchise agreement provides for the designation of a "protected area". As long as the franchisee complies with the franchise agreement and other agreements with Shakey's or its related companies, the franchisor and its related companies will not operate or authorize another to operate a Shakey's restaurant, which is physically located within a protected area.
The franchise agreement authorizes the franchisee, with permission from Shakey's, to provide delivery services from the franchised restaurant only within a specific delivery area. The franchisee may not offer delivery services outside his/her delivery area.
Term of Agreement and Renewal: The term of the franchise agreement is 10 years. On expiration, the franchisee can acquire successor franchises on then-current terms, subject to other requirements.
Obligations and Restrictions: The franchisee or the operating manager (an approved on-site manager, if the franchisee owns more than 1 restaurant) or the operating owner, if applicable, must directly supervise the operation of the franchised business. The operating owner must have an equity ownership in a business entity franchisee, have full control over day-to-day activities of the restaurant, including control over standards of operation and financial performance, have successfully completed the initial training; and be approved by the franchisor. The franchisee must offer for sale and provide only those goods and services that have been authorized and may not sell or offer for sale products or services which have not been authorized by the franchisor.
Total Number of Units: 53 units
Investment Tables:
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| Initial franchise fee | $25,000 | $25,000 |
| Property insurance | $3,000 | $15,000 |
| Architectural & engineering | $20,000 | $30,000 |
| Attorneys & accountants | $5,000 | $10,000 |
| Inventory & supplies | $10,000 | $20,000 |
| Smallwares | $25,000 | $35,000 |
| Travel and living expenses while training | $3,000 | $12,500 |
| Licenses and permits | $5,000 | $15,000 |
| Real estate and lease deposits | $10,000 | $25,000 |
| Utility fees and deposits | $3,000 | $7,000 |
| Equipment, furniture, décor and signage | $240,000 | $500,000 |
| Construction of leasehold improvements | $400,000 | $1,300,000 |
| Games | $0 | $125,000 |
| Grand opening advertising | $25,000 | $25,000 |
| Additional funds (3 months) | $20,000 | $50,000 |
| Total | $794,000 | $2,194,500 |
Ongoing fees:
| Name of fee | Amount |
|---|---|
| Royalty fee | 5% of gross sales |
| Advertising fund | Not to exceed 5% of gross sales |
| Advertising cooperatives | Portion of national advertising fund contribution |
| Local advertising – Los Angeles | 2.4% of gross sales |
| Local advertising | Minimum of 1% of gross sales |
| Renewal | 50% of then-current initial franchise fee |
Year of FDD: 2008
The above information has been taken from the UFOC/FDD of Shakey's
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