Great Steak Franchise Costs, Fees & FDD

Year Business Began: 1985

Franchising Since: 1986

Headquarters: Scottsdale, Arizona

Estimated Number of Units: 25

Franchise Description: The franchisor is Kahala Franchising, L.L.C. Franchisees operate a restaurant called “Great Steak”, preparing, specializing in, and serving Philadelphia cheesesteak sandwiches, baked potatoes with all of the toppings, hamburgers and related fast food menu items. Qualified individuals may (i) construct a new Great Steak restaurant; (ii) purchase one of the franchisor’s Great Steak franchises by acquiring an existing business from another franchisee or from the franchisor; or (iii) convert all existing retail operations from another brand to the Great Steak brand. Traditional Great Steak restaurants are easily accessible by the general public, such as a free-standing building, inline retail shop, shopping mall or street front location. Non-traditional location Great Steak restaurants are located in marketplaces such as an airport, amusement park, sports or entertainment venue, train station, travel plaza, toll roads, cafeteria, retail store, convenience store, military base, hospital, office building, movie theater, hotel, casino, kiosk, cart or high school or college campus.
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 online, at KTEC (Kahala Training & Education Center), which is located at the franchisor’s corporate offices in Scottsdale, Arizona, or at such other location(s) as the franchisor may designate in its sole discretion and the in-store portion of the training program will be held at the designated training restaurant in the metropolitan Phoenix, Arizona area, or at such other location(s) as it may designate in its sole discretion. Currently, there are 40 hours of classroom training and 40 hours of on-the-job training. The franchisor will provide one of its representatives to come to the franchisee’s restaurant during opening week for up to four days at its expense to work with the franchisee and manager on the grand opening, and on operating and marketing the restaurant. The franchisor may, in the future, hold refresher or additional training programs, conferences and seminars. The franchisee’s 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 Great Steak restaurant is subject to the franchisor’s approval. 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 Great Steak franchisees only those who plan to actively participate in the direct operation and daily affairs of the Great Steak restaurant. The franchise must be personally managed with on-premises supervision and directly operated by franchisees or another partner, shareholder or member of the business organization, or a manager who must have successfully completed the training program. Spouses of franchisees must sign agreements as well. The franchisor requires that the franchisees’ business is solely that of a Great Steak restaurant, and they may not conduct any other business or activity at the site of the restaurant without the franchisor’s prior written approval. For traditional Great Steak franchises, franchisees must offer the full menu prescribed by the franchisor. Non-traditional Great Steak franchises may offer a more limited menu than the traditional Great Steak franchises, as detailed in the manual.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date the restaurant opens to the public. If franchisees are not in default and satisfy certain conditions, they may renew for a single renewal 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, 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	$5,600	$30,000
Lease Review Fee	$0	$2,500
Rent/Security Deposit (for 3 months)	$6,000	$20,000
Travel and Living Expenses (2 persons) while training, not including salaries, if any, for franchisees and their employees	$2,500	$5,000
Real Estate	Varies	Varies
Architectural Fees	$15,000	$25,000
Leasehold Improvements	$45,000	$294,000
Restaurant Equipment, Furniture, Small Wares, Interior Signage and Menu Panels	$45,000	$200,550
Exterior Signage	$10,000	$17,000
Computer Hardware, Software (POS System)	$3,000	$10,000
PCI Compliance Costs	$150	$1,300
Opening Inventory (food and paper)	$2,500	$7,000
Business Insurance	$1,000	$5,000
Miscellaneous Opening Costs	$4,750	$17,500
Grand Opening Marketing	$5,000	$10,000
Depository Account	$3,000	$3,000
Additional Funds – 3 month initial period	$5,000	$15,000
ESTIMATED TOTAL*	$153,500	$662,850

*The estimated initial investment range covers from a non-traditional restaurant up to a traditional restaurant. The estimate does not include real estate costs and/or rent for the business location except for the initial security deposit.

Other Fees

Type of Fee	Amount
Royalty Fee and Surcharge	Royalty fee is the greater of the following: (i) 6% of total weekly gross sales or (ii) $400 per week. Surcharge is a maximum of $10 per week in addition to the royalty fee.
Advertising Fees	Up to 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.
Renewal Franchise Fee	50% of the then-current initial franchise fee, not including any discounts or reductions.
Transfer Franchise Fee – Traditional Locations	$7,500
Transfer Franchise Fee – Non-Traditional Locations	$5,000
Relocation Fee	$500
Transfer Training Fee	$2,500 for two individuals ($500 for each additional individual).
Document Administration 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.
Non-Participation Fee	$100 per day.
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.
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 Great Steak. Year of FDD: 2025.
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