Franchising Since: 1987
Headquarters: Beverly Hills, California
Estimated Number of Units: 295
Franchise Description: Johnny Rockets Licensing, LLC is the franchisor. The franchisor is a wholly-owned subsidiary of FAT Brands, Inc. Johnny Rockets restaurants offer a menu of lunch and dinner products featuring made-to-order hamburgers, crispy fries, chili, hand-spun shakes and malts, classic sandwiches and other items served in a distinctive setting. Some restaurants may serve breakfast, and some may serve beer, wine and alcohol. The menu items offered at a restaurant may vary depending on the size and location of the restaurant. Some restaurants also offer for sale certain branded merchandise including clothing, souvenirs, and novelty items. All Johnny Rockets restaurants must be operated using unique and distinctive systems developed by the franchisor.
Training Overview: The franchisor will train the restaurant manager (which may be the franchisee) and four additional persons who have been designated as assistant managers or shift leaders in the day to day management of the restaurant. In total, five managers must attend and successfully complete the training program to become certified managers in order for franchisees to be approved for restaurant openings. The training program is three to six weeks in duration (three weeks @ 40 hours/week for shift managers and six weeks @ 50 hours/week for assistant managers, and general managers). In addition, franchisees, or the owner if the franchisee is a business entity, must attend an executive training program (one week @ 50 hours/week). Training may occur at one or more of the franchisor’s certified training restaurants which are currently located in Beverly Hills, California, or at another franchised or affiliate-owned restaurant that the franchisor designates. The franchisor will provide franchisees with pre-opening and post-opening supervision and assistance as it deems advisable based on the franchisee’s opening plan, subject (as to timing) to scheduling needs and availability of personnel. The franchisor will provide, as it deems appropriate, additional training for franchisees or their manager, operating partner, assistant managers, shift leaders or other employees and quarterly training and status meetings.
Territory Granted: Franchisees will be permitted to operate their restaurant at a location which the franchisor accepts. The protected territory will be described in an attachment to the Franchise Agreement. Although the franchisor has agreed to provide franchisees with certain protections in their protected territory, they will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. The size of the protected territory will vary depending on many factors, such as population density and residential versus commercial properties in the area. The protected area is typically within a one-mile radius of the restaurant but may vary. The protected area will not be modified during the term of the Franchise Agreement and franchisees will not have the right to open additional restaurants unless they have also signed a Multi-Unit Restaurant Agreement.
Obligations and Restrictions: Franchisees do not have to personally supervise the restaurant, however, if they (or their principal approved by the franchisor) do not personally supervise the restaurant, a manager or one of their assistant managers or shift leaders who has successfully completed the training program must directly supervise the restaurant “on premises.” The manager must assume responsibility for the day-to-day operation of the restaurant, oversight of the preparation of food products, and supervision of personnel and accounting and must spend at least 40 hours per week overseeing the operation of the restaurant. Franchisees must offer for sale only those menu items and approved sizes, products, and services that the franchisor has approved and they must use, in the preparation of food products, only the seasonings and chili that the franchisor requires that they use. Franchisees must participate in the designated in-store music system program, if and when one is established. Franchisees may not sell any alcoholic beverages without the franchisor’s consent.
Term of Agreement and Renewal: The length of the initial franchise term is 15 years. Two 10-year renewals are available if franchisees are in good standing.
Financial Assistance: The franchisor does not offer direct or indirect financing. Franchisees may not borrow more than 75% of the cost of constructing, equipping, supplying and operating the restaurant. If franchisees are a corporation or other entity, they or their owners must contribute to the franchise as equity at least 25% of the cost of constructing, equipping, supplying and operating the restaurant.
Investment Tables:
The above information has been compiled from the FDD of Johnny Rockets. Year of FDD: 2023.
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| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $50,000 | $50,000 |
| Leasehold Improvements; Construction Costs | $150,000 | $600,000 |
| Equipment, Decor & Furnishings | $160,000 | $600,000 |
| Signage | $10,000 | $100,000 |
| Point of Sale Systems (POS) and Related Technology | $14,638 | $20,988 |
| Restaurant Small Wares | $10,800 | $25,000 |
| Initial Inventory | $7,200 | $10,400 |
| Security Deposits (Utilities, Insurance, etc.) | $9,000 | $32,500 |
| Insurance and Bonds | $8,000 | $12,000 |
| Rent | $3,500 | $20,000 |
| Miscellaneous (legal, accounting, licenses, permits) | $14,000 | $25,000 |
| Liquor Licenses and Fees | $5,000 | $75,000 |
| Grand Opening & Marketing Materials | $7,500 | $10,000 |
| Training | $32,500 | $65,000 |
| Additional Funds (three months) | $25,000 | $40,000 |
| ESTIMATED TOTAL | $507,138 | $1,685,888 |
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 6% of total net sales; interest on any overdue amount of 1.5% per month and late fee of $25 per week. |
| Marketing Fund | Currently 2% of total net sales. |
| Local Advertising | 2% of net sales during each of the period January 1 through June 30 and July 1 through December 31 of each year. |
| Additional Training | Franchises must reimburse the franchisor for its costs of training, up to a maximum of $1,500 per week for each individual. |
| Reimbursement for Rescheduled Training Expenses | Franchisees must reimburse the franchisor for its additional travel expenses and wages resulting from changing the travel arrangements of its representatives scheduled to provide initial training. |
| Reimbursement for Pre-Opening and Post-Opening Assistance | Franchisees must reimburse the franchisor for travel expenses, including airfare, hotel, rental car and the then current per-diem charge per person for its personnel who provide pre-opening and post-opening assistance. Franchisees must also reimburse the franchisor for its direct and indirect wages and other labor costs and expenses for its personnel who provide pre-opening and post-opening assistance. |
| Brand Technology System Support Services | Currently, $840-$1,500 per year for mandatory services plus up to $3,250 per year for optional services. |
| Transfer | $15,000 |
| Audit | Cost of audit plus interest on unpaid amount of 1.5% interest per month and $25 per week. |
| Indemnification | Varies. |
| Reimbursement of Cost of Insurance | The franchisor’s cost to procure insurance and a reasonable fee to cover its related expenses. |
| Unapproved Product/Supplier Fee | $500 per day. |
| Damages, Costs and Expenses, including Attorneys’ Fees | Amounts the franchisor incurs. |
| Sales or Similar Taxes | Sales, gross receipts and similar taxes imposed on the franchisor because of payments the franchisee makes. |
| Renewal Fee | 40% of then-current initial fees. |
| Securities/ Partnership Interests in Franchisee Offering | $10,000 or the franchisor’s reasonable costs and expenses to review offering documents, whichever is greater. |
| Management Fee | See FDD. |
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