Schlotzsky's Franchise Costs, Fees & FDD

Year Business Began: 1971

Franchising Since: 1976

Headquarters: Atlanta, Georgia

Estimated Number of Units: 310

Franchise Description: The franchisor is Schlotzsky’s Franchisor SPV LLC. The franchisor is an indirect, wholly-owned subsidiary of GoTo Foods LLC (formerly Focus Brands LLC). Schlotzsky’s restaurants are fast casual restaurants featuring premium sandwiches of blended flavors typically served on proprietary breads, pizzas, calzones, soups, salads, desserts, and beverages, which may include alcoholic beverages. The franchisor also typically requires franchisees to purchase a Cinnabon Express franchise to operate inside the restaurant.
Training Overview: Prior to the opening of the restaurant, the required trainees must attend and successfully complete to the franchisor’s satisfaction the management training program. In addition, the primary contact must successfully complete (i) a limited version of the management training program designed for primary contacts, if they will not be involved in the day-to-day operation of the restaurant or (ii) the entire management training program, if they will be a manager involved in the day-to-day operation of the restaurant (in which case, they will count as one of the required trainees). All or certain portions of the Management Training Program may, in the franchisor’s discretion, be conducted online or in person at (i) its corporate headquarters in Atlanta, Georgia, (ii) a Restaurant that it designates that has been certified as an authorized training facility, and/or (iii) other locations authorized by the franchisor. Currently, the management training program consists of 50 hours of classroom training and 200 hours of on-the-job training. For the first three restaurants, the franchisor will provide one or more of its representatives to provide on-site training and assistance to facilitate the opening of such restaurants. The franchisor may, from time to time, conduct conferences, conventions, programs, webinars, teleconferences, or training sessions on any matters related to the system.

Territory Granted: The restaurant may only be operated at the accepted location. Unless franchisees operate a non-traditional restaurant, they will receive a territory with limited protected rights (an “area of protection”). Franchisees will not receive an exclusive territory. During the term of the Franchise Agreement, the franchisor will not establish or operate, nor license any other person to establish or operate, a restaurant operating under the proprietary marks and the system at any location within the area of protection, except in captive audience locations, delivery kitchens, and as otherwise provided in the Franchise Agreement.

Obligations and Restrictions: Franchisees are required to devote their best efforts to the proper and effective operation of the restaurant. Franchisees (if they are an individual) and their owners (if they are an entity) are not required to participate in the actual operation of the restaurant but may serve as the primary contact and/or a manager. However, the franchisor does not recommend investment in a restaurant for investors interested in an absentee management business. Franchisees must appoint a primary contact who will be responsible for, and have decision-making authority regarding, the restaurant and its operation. Franchisees may offer in the restaurant to customers only the approved products that the franchisor has approved in writing. Franchisees must produce and sell all approved products the franchisor specifies, including all menu items, trademarked product lines, and other products and services that the franchisor requires them to sell, as stated in the manuals or otherwise, which are all part of the system.

Term of Agreement and Renewal: The length of the initial franchise term is 20 years. One 20-year renewal term is available, if franchisees comply with renewal requirements.

Financial Assistance: The franchisor does not offer financing for trade fixtures, opening inventory, or any other purpose. The franchisor may refer franchisees to leasing or financing companies not affiliated with the franchisor. Currently, the franchisor will not guarantee a franchisee’s note, lease, or obligation, for any lender, or any other person or entity. The franchisor may engage an advisor to provide consulting services to franchisees to assist them with securing financing and it may pay the advisor for this assistance to franchisee. The franchisor will not be responsible for the consultant’s provision of services to franchisees and if they choose to use the consultant, they must sign the consultant’s form of agreement. The franchisor may modify the Franchise Agreement, if necessary, to comply with Small Business Administration (SBA) requirements for franchisees to participate in certain SBA loan programs. For qualifying veterans or members of the Armed Forces, the initial franchise fee is $20,000.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$35,500	$35,500
Construction and Build Out Costs	$288,000	$1,130,000
Permitting	$1,800	$13,700
Equipment Package	$133,950	$181,300
Millwork	$20,000	$29,900
Furniture	$2,850	$33,500
Menu Board, Graphics and Interior Signage	$6,840	$22,900
Exterior Signage	$15,300	$149,000
Computer System	$23,400	$53,700
Smallwares	$6,700	$15,400
TV/Music	$0	$4,200
Architect/Engineer	$5,000	$37,300
Rent	$3,300	$10,800
Grand Opening Marketing	$15,000	$25,000
Legal and Accounting Fees	$3,000	$10,000
Insurance	$1,825	$9,100
Misc. Opening Costs/Office Supplies	$500	$1,500
Security Deposits	$7,000	$8,000
Management Training Program Fee	$0	$10,000
Travel and Living Expenses During Training	$10,000	$40,000
On-Site Training Fee	$0	$9,600
Opening Inventory	$7,500	$21,800
Cinnabon Express Bakery Initial Franchise Fee	$8,000	$8,000
Cinnabon Express Bakery	$23,600	$40,100
Additional Funds  - 3 months	$39,000	$51,000
ESTIMATED TOTAL	$658,065	$1,951,300

 
Other Fees

Type of Fee	Amount
Royalty	6% of net sales.
Advertising Contribution	Currently, 4% of net sales, but it may be increased to up to 5% of net sales.
Marketing Technology Fee	Currently, $230 per month.
Local Advertising Group (LAG) Contribution	An amount set by the franchisee’s LAG.
Local Marketing Obligation	Currently, each calendar quarter, franchisees must spend not less than 0.5% of net sales on local market advertising.
Promotions and Advertising Materials	Up to 110% of the franchisor or its affiliates’ actual costs and expenses related to the goods the franchisee purchases from the franchisor or its affiliates.
Insufficient Funds Fee	Up to 110% of the franchisor or its affiliates’ actual costs and expenses.
Interest	The lesser of 1.5% per month or maximum legal interest rate.
Late Reporting Fee	The then-current fee. Currently, $50 per week.
Taxes and Other Payments	Franchisor’s cost.
Subsequent Trainee Initial Training Fee	Currently, $250 per trainee per day.
On-Site Training and Assistance	A reasonable fee. Currently, $500 per day per trainer plus their travel and living expenses.
Additional Support/Consulting Fee	A reasonable fee. Currently, $500 per representative per day, plus travel and living expenses.
Conference/Program Fee	A reasonable fee, which will vary by program. Currently, ranges from $0 to $2,500 per attendee.
Training Cancellation Fee	The fees for the cancelled program and the franchisor’s out-of-pocket costs.
Sublease Administration Fee	The then-current fee. Currently, $200 per month.
Lease Renewal/Extension Review Fee	The then-current fee.
Lease Documentation Fee	$500 per month (or partial month) until delivered.
Relocation Fee	10% of the then-current initial franchise fee.
Relocation Extension Fee	$1,500 per year that the term is extended.
Refresh/Remodel Site Survey and Design Fee	The then-current fee. Currently, such fee is approximately $1,200 to $6,000 depending on the scope of the required changes.
Transfer Fee	50% of the then-current initial franchise fee if it is a control transfer; if it is a transfer to a related party or that is a non-control transfer, 10% of the then-current initial franchise fee.
Renewal Fee	20% of the then-current initial franchise fee.
Computer Systems Fee	A reasonable fee, which will vary based on the services provided.
POS System License and Lease Fees	Currently, $530 to $672 per month if franchisees purchase the POS system under the CapEx program and $1,316 to $1,534 per month if you lease the POS system under the HaaS program.
POS System Support Fee	Currently, between $125 and $250 per month.
POS System Administration Fee	The then-current fee. Currently, between $1,500 to $2,000.
Non-GoTo Foods Portfolio POS Menu Setup	A reasonable fee. Currently estimated to be $500 per day.
Back Office and Polling Software Fee	Currently, estimated to be between $100 and $200 per month.
Credit Card Fees	Transaction fees estimated to be from 2.5% to 5% of transaction amounts. Other fees may apply depending on the vendor used for credit card processing.
Information Security and Compliance Fees	Currently, not charged.
Gift Card and Loyalty Card Fees	Amount of administrative fees.
Loyalty App Fee	Currently, $62 per month.
Online Ordering Fee	Currently, $99 per month, plus a per transaction fee (currently, 0.04% per transaction) and additional charges based on services subscribed to.
Ordering Support Fee	A reasonable fee, which will vary based on the services provided. Currently, 3% of the pre-tax transaction amount for each transaction that is processed through the online ordering system.
Technology Fee	The then-current fee. Currently not collected.
Purchasing Program Fee	Reasonable membership fees assessed by the purchasing program.
Supply Chain Fee	Currently, $0.47 - $0.66 per case purchased through certain appointed distributors.
Master Insurance Policy Fee	Currently not charged; the franchisor does not have an estimate at this time.
Insurance	If the franchisee fails to maintain required insurance coverage and the franchisor elects to obtain coverage for the franchisee: Amount of unpaid premiums and the franchisor’s costs.
Guest Relations Fee	Currently, $30 for each guest complaint or other contact request that franchisees do not timely respond to or for each excessive guest complaint.
Non-Compliance Fee	Currently, $25 to $500 for a single default, but may vary based on the severity of defaults and repetition of defaults.
Failure to Comply with Standards or Law Fee	Currently, up to a $5,000 fee plus the franchisor’s reasonable expenses connected with any inspection, examination, or analysis of products or the restaurant.
Development Deadline Extension Fee	$2,500 per missed deadline.
Repeated Inspection Fee	$500 non-compliance fee, plus any costs the franchisor is charged by third-party inspectors or otherwise incurs.
Reimbursement of Services After Default	All costs and expenses that the franchisor reasonably incurs.
Audit	Cost of audit.
Liquidated Damages	The average monthly amount of royalty that the franchisee owed the franchisor during the past 36 months times the lesser of remainder of the term of the Franchise Agreement or 36 months.
Appraiser’s Fee	50% of appraiser’s fee.
Indemnification of Franchisor	The franchisor’s costs and expenses.
Attorneys’ Fees	The franchisor’s costs and expenses.
Reinstatement Fee	10% of the amount of the then-current initial franchise fee, plus royalty fees that would have been payable in period between termination and reinstatement.
De-identification Fee	The franchisor or its affiliates’ actual costs and expenses, plus interest and an administrative fee equal to 15% of its or its affiliates actual costs and expenses.

The above information has been compiled from the FDD of Schlotzsky's. Year of FDD: 2025.
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