Blimpie Franchise Costs, Fees & FDD

Year Business Began: 1964

Franchising Since: 1970

Headquarters: Scottsdale, Arizona

Estimated Number of Units: 100

Franchise Description: The franchisor is Kahala Franchising, L.L.C. Franchisees operate a quick casual restaurant called Blimpie, preparing and serving fresh deli sandwiches, salads, and other beverage and food items. If qualified, franchisees may (i) construct a new Blimpie restaurant; (ii) purchase one of the franchisor’s Blimpie franchises by acquiring an existing business from another franchisee or from the franchisor; or (iii) convert all of their existing retail operations from another brand to the Blimpie brand.
Training Overview: The franchisor will make a training program available to franchisees and their designated representative after they sign the Franchise Agreement. The classroom portion of the Training Program will be held at KTEC (Kahala Training & Education Center), which is located at the franchisor’s corporate offices in Scottsdale, Arizona, and the in-store portion of the training program will be held at one of its affiliated restaurants in the metropolitan Phoenix, Arizona area, or at such other location(s) as it may designate in its sole discretion. Currently, initial training consists of approximately 40 hours of classroom training and approximately 60 hours of on-the-job training. The franchisor will provide one of its representatives to come to the restaurant during opening week for up to six days at the franchisor’s expense to work with franchisees and their manager on their grand opening, and on operating and marketing the restaurant. The franchisor may, in the future, hold refresher or additional training programs, conferences and seminars. Attendance at these programs is mandatory.

Territory Granted: The franchise is granted only for the location specified in the Franchise Agreement or a location to be approved by the franchisor. The specific site of the Blimpie restaurant is subject to the franchisor’s approval. The franchisor will not unreasonably withhold approval of the location. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from restaurants that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls.

Obligations and Restrictions: While the Franchise Agreement does not specifically require franchisees or their principals to personally participate in the direct operation of the franchise, it is the franchisor’s intention to select as Blimpie franchisees only those who plan to actively participate in the direct operation and daily affairs of the Blimpie restaurant. The franchise must be personally managed with on-premises supervision and directly operated by franchisees or another partner, shareholder or member of their business organization, or a manager who must have successfully completed the training program. If franchisees are married individuals, their spouse must sign the applicable agreements. The franchisor requires that the business is solely that of a Blimpie restaurant, and franchisees may not conduct any other business or activity at the site of the restaurant without prior written approval. For traditional restaurants, franchisees must offer the full menu prescribed by the franchisor, subject to change from time to time in its sole discretion. Non-traditional restaurants may offer a more limited menu than the traditional restaurant, as detailed in the operations manual. The franchisor has the right to require franchisees to sell additional authorized products and services from time to time that it believes will be successful.

Term of Agreement and Renewal: For new Blimpie restaurants, the length of the initial franchise term is (i) 10 years from the date the restaurant opens to the public if franchisees own the property or enter into a lease directly with the landlord or other third party, or (ii) the term of the sublease if franchisees enter into a sublease with a Kahala Franchising affiliate. If franchisees are not in default and satisfy certain conditions, they may renew for a single term of five years.

Financial Assistance: The franchisor does not offer any direct or indirect financing or financing arrangement, nor will it guaranty a franchisee’s obligations under any note or other obligation, except potentially for the lease for the site or if the franchisee purchases a restaurant corporate-owned “as-is” by one of its affiliates, and only in its sole and absolute discretion. If franchisees are currently an active or active reserve member of the U.S. Armed Forces, have been honorably discharged from the U.S. Armed Forces, are a “wounded warrior” or the spouse of a currently active duty military member, or are a 501(c)(3) organization, they will receive a 20% discount on the initial franchise fee.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$5,520	$18,000
Rent/Security Deposit (for three months)	$3,000	$15,000
Travel and Living Expenses (2 persons) while training, not including salaries, if any, for franchisees and their employees	$3,000	$7,500
Real Estate	Varies
Lease Review Fee	$0	$2,500
Architectural Fees (and Project Management Fees, if applicable)	$5,000	$20,000
Construction Costs/Leasehold Improvements	$8,000	$311,850
Restaurant Equipment, Furniture, Small Wares, and Interior Signage (includes menu boards for traditional restaurants)	$22,000	$128,100
Exterior Signage (includes menu boards for non-traditional restaurants)	$8,000	$17,000
Computer Hardware, Software (POS System)	$2,510	$5,000
PCI Compliance Costs	$0	$1,300
Opening Inventory (food and paper)	$4,000	$6,000
Grand Opening Marketing	$5,000	$10,000
Business Insurance	$1,000	$5,000
Miscellaneous Opening Costs	$4,750	$18,500
Depository Account	$3,000	$3,000
Additional Funds – 3 month initial period	$15,000	$20,000
ESTIMATED TOTAL*	$89,780	$588,750

*The estimated initial investment range covers from the non-traditional restaurant size up to the traditional restaurant size. Range does not include real estate costs, construction of the building or rent for the business location except for the initial security deposit.

 
Other Fees

Type of Fee	Amount
Royalty Fee and Surcharge	The greater of the following: (i) 6% of total weekly gross sales or (ii) $300 per week. Surcharge is a maximum of $10 per week in addition to the royalty fee.
Advertising Fees	4% of weekly gross sales.
Additional Persons Training Fee	$1,250 per person ($500 per person for the in-store portion of the Training Program, and $750 per person for the new owner training portion of the training program).
Additional Training Fee	$300 per person per day.
Annual Meeting Registration Fee	Up to $1,000 plus incidental costs to attend.
Depository Account	$3,000 (Must be replenished on a regular basis.)
Data Fees	Up to $75 per month (subject to reasonable annual and/or service enhancement increases).
POS Help Desk Phone Support Maintenance Contract Fee	$55 per month.
Gift Card Redemption Fee	Currently 11% of the amount of the gift card redemption.
Online Ordering Activation Fee	Currently, one-time fee of $250.
Online Ordering Fees with Credit Card Payment	$0.07 per transaction plus online fee of $0.02 per each credit card transaction.
Online Ordering Fees	(i) 10% of online order sale plus $0.50 dispatch per order, or (ii) $60 per month plus $0.50 dispatch per order.
Renewal Franchise Fee	50% of the then current initial franchise fee not including any discounts or reductions.
Transfer Franchise Fee	$5,000
Transfer Training Fee	$1,500 for two individuals ($750 for each individual).
Document Administration Fee	$500
Relocation Fee	$500
Default Interest	$50 plus interest at 1.5% per month or maximum legal rate, if less.
Late Report Fee	$100 per report.
Sublease Late Charge	5% of the late or unpaid amount plus any late charges and interest incurred under the master lease as a result of the late payment (where applicable).
Collection Costs	All collection costs including reasonable attorneys' fees.
Non-Sufficient Funds Fee	$50 for each electronic funds transfer returned for non-sufficient funds; $25 for each check or draft returned for non-sufficient funds.
Audit	Cost of audit plus interest at Default Rate on underpayments or the maximum rate permissible by law.
New Supplier Approval Fee	A charge not to exceed the reasonable cost of the inspection and the actual cost of the test not to exceed $5,000.
Early Termination Fee	The average monthly royalty and advertising fees paid for any consecutive 12 month period within the preceding 48 month period multiplied by the number of months remaining in the term of the Franchise Agreement, and the product is divided by 2.
Non-Participation Fee	$100 per day.
Management Fee	6% of the franchised business’ gross sales (in addition to the royalty fee and advertising fee) plus the franchisor’s direct out-of-pocket costs and expenses.

The above information has been compiled from the FDD of Blimpie. Year of FDD: 2025.
Franchise Direct's Disclaimer