Johnny Rockets Franchise Cost & Fees

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Description

Year Business Began: 1986Franchising Since: 1987Headquarters: Lake Forest, CaliforniaEstimated Number of Units: 400Franchise Description: Johnny Rockets Licensing, LLC, (also referred to as JRL) is the franchisor. A Johnny Rockets Restaurant offers a menu of lunch and dinner products featuring hamburgers made to order (fresh never frozen), crispy fries, chili, hand-dipped shakes and malts, classic sandwiches and other items served in a distinctive setting. Some restaurants may serve breakfast, and some may serve beer and wine. The menu items offered at a Restaurant may vary depending on the size and location of the restaurant. The 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. There are several formats of Johnny Rockets Restaurants, including: Traditional Restaurants, Express Restaurants, and Drive-Thru Restaurants.Training Overview: The Initial Restaurant Management Training Program for a Restaurant will last approximately four weeks and will include 24 shifts consisting of classroom and on-the-job training and self-study modules and applications. For their first Restaurant, the franchisor will provide the Restaurant Management Training Program to franchisees (or, in the case where they are a corporation or other legal entity, to a principal or Control Person who has been approved in writing by the franchisor) and one additional person designated by franchisees as the manager or assistant manager responsible for the operation of the Restaurant must attend the Initial Restaurant Management Training Program. At their option, up to two additional persons designated by franchisees as their Restaurant managers or assistant managers may also attend our Initial Restaurant Management Training Program. The Initial Restaurant Management Training Program will cover the procedures necessary to properly operate a Restaurant. The location and duration of the training may be altered by based upon the franchisee’s training needs and other factors including the availability of a certified training restaurant. In addition to the Initial Restaurant Management Training Program, immediately before and after the opening of the Restaurant, the franchisor offer to franchisees, free of cost, the assistance of up to three operational representatives at their Restaurant for up to five days before and five days after they open their Restaurant or as otherwise deemed necessary by the franchisor to assist in all phases of opening the Restaurant. As a part of ongoing training, the franchisor may hold a Franchise Conference once each year and Webinars, as necessary, during the year. Either franchisees or their designee must attend each Franchise Conference.Territory Granted: The license granted under the Restaurant Franchise Agreement to use the Marks is nonexclusive. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that owned by the franchisor, or from other channels of distribution or competitive brands controlled by the franchisor. Obligations and Restrictions: If franchisees operate a Restaurant, they must be personally involved in the operation of the Restaurant on a full-time basis; however, they may delegate the day-to-day management responsibilities to a manager. Franchisees and three additional persons designated by them as managers or assistant managers responsible for the operation of the Restaurant must complete the training course. During the term of the Restaurant Franchise Agreement, the franchisee or an officer, director, shareholder, member, partner, Control Person, trustee or equity owner of the franchisee’s legal entity approved by the franchisor, or a manager or assistant manager who has attended the Restaurant Management Training Program and who has been approved by the franchisor must spend a minimum of 40 hours per week at the Restaurant overseeing and supervising the operation of the Restaurant. Franchisees must devote at least eight hours per week of physical presence at the Restaurant during open and operating hours. In addition, the franchisee must designate a sufficient number of assistant managers to assure that the franchisee, a manager or an assistant manager are on the premises of the Restaurant actually supervising the operation of the Restaurant during all open and operating hours. Franchisees must prepare and serve all items on the Johnny Rockets menu and only those items unless a variation from this requirement is first approved in writing by the franchisor. Franchisees must cooperate with the franchisor in conducting test marketing programs and must comply with all rules and regulations established by the franchisor.Term of Agreement and Renewal: The Initial Term will be 10 years commencing on the date the franchisee opens the Restaurant for business. If franchisees are in good standing, they can renew for two additional periods of five years each.Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or other obligations. The franchisor and its affiliates do not guarantee or co-sign a franchisee’s notes, leases or any other obligations. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $49,000 $49,000 Architectural Design $15,000 $30,000 Leasehold Improvements $200,000 $450,000 Furniture, Fixtures and Equipment $175,000 $250,000 Interior Decor Package $3,000 $10,000 Signs (Interior and Exterior) $20,000 $50,000 Information and Technology Systems POS System $17,000 $75,000 Smallwares $12,000 $20,000 Initial Inventory $6,000 $8,000 Real Estate and Security Deposits $10,000 $18,000 Insurance and Performance Bonds $2,000 $6,000 Music and Video System $8,000 $30,000 Training $18,000 $21,000 Pre-Opening Labor $14,000 $22,000 Grand Opening Publicity Support $5,000 $10,000 Liquor License $4,000 $45,000 Miscellaneous (Legal, accounting, licenses, permits, etc.) $7,000 $14,000 Additional Funds (Initial Period – 3 months) $40,000 $60,000 Estimated Totals $605,500 $1,144,500 Other Fees Type of Fee Amount Weekly Royalty Fee 5% of Weekly Gross Sales Weekly Marketing Fee Up to 4% of Weekly Gross Sales. Currently, the Weekly Marketing Fee is 1.75%, but the franchisor may increase the fee to an amount not to exceed 4.0%. Cooperative Advertising Up to 3% of Weekly Gross Sales Local Advertising 2% of Weekly Gross Sales. Renewal Fee $12,500 Reimbursement of Insurance Costs Cost of obtaining coverage. Reimbursement of Repair Costs Cost of repairs. Transfer Fee $5,000 Audit All amounts shown to be due, plus (i) interest equal to the lower of the maximum rate permitted by law or 15% per annum of the deficient amount; (ii) a penalty in an amount equal to 10% of the deficient amount; and (iii) the cost of the audit. If the deficient amount is not paid within five days after the franchisee’s receipt of JRL’s demand, interest as described in (i) above will begin to accrue on the penalty described in (ii) above. Late Charges The greater of (i) 10% of the amount due, or (ii) $250, plus interest at the lower of the maximum rate permitted by law or 15% of the amount past due from the date a payment was due until it is paid. Damages for Employee Raiding $100,000 Costs and Attorneys Fees The franchisor’s costs and expenses. Indemnification The losses and expenses incurred by the franchisor. Supplier Review Fee The franchisee must reimburse the franchisor for all costs and expenses incurred by the franchisor in reviewing or approving a supplier proposed by the franchisee, including any travel and lodging expenses it incurs. Taxes The franchisee must reimburse the franchisor for any state or local taxes imposed on it as a result of the franchisor’s receipt or accrual of the Initial Franchise Fee, Weekly Royalty Fee, Weekly Marketing Fee or other fees it collects under the terms of the Franchise Agreement. Relocation$5,000 or any greater amount necessary to reimburse the franchisor for any reasonable costs it incurs in considering the franchisee’s request.InMoment Fee$115.38 quarterlyEcoSure Fee$322.51 twice per year The above information has been taken from the FDD of Johnny Rockets. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Weekly Royalty Fee 5% of Weekly Gross Sales
Weekly Marketing Fee Up to 4% of Weekly Gross Sales. Currently, the Weekly Marketing Fee is 1.75%, but the franchisor may increase the fee to an amount not to exceed 4.0%.
Cooperative Advertising Up to 3% of Weekly Gross Sales
Local Advertising 2% of Weekly Gross Sales.
Renewal Fee $12,500
Reimbursement of Insurance Costs Cost of obtaining coverage.
Reimbursement of Repair Costs Cost of repairs.
Transfer Fee $5,000
Audit All amounts shown to be due, plus (i) interest equal to the lower of the maximum rate permitted by law or 15% per annum of the deficient amount; (ii) a penalty in an amount equal to 10% of the deficient amount; and (iii) the cost of the audit. If the deficient amount is not paid within five days after the franchisee’s receipt of JRL’s demand, interest as described in (i) above will begin to accrue on the penalty described in (ii) above.
Late Charges The greater of (i) 10% of the amount due, or (ii) $250, plus interest at the lower of the maximum rate permitted by law or 15% of the amount past due from the date a payment was due until it is paid.
Damages for Employee Raiding $100,000
Costs and Attorneys Fees The franchisor’s costs and expenses.
Indemnification The losses and expenses incurred by the franchisor.
Supplier Review Fee The franchisee must reimburse the franchisor for all costs and expenses incurred by the franchisor in reviewing or approving a supplier proposed by the franchisee, including any travel and lodging expenses it incurs.
Taxes The franchisee must reimburse the franchisor for any state or local taxes imposed on it as a result of the franchisor’s receipt or accrual of the Initial Franchise Fee, Weekly Royalty Fee, Weekly Marketing Fee or other fees it collects under the terms of the Franchise Agreement.
Relocation $5,000 or any greater amount necessary to reimburse the franchisor for any reasonable costs it incurs in considering the franchisee’s request.
InMoment Fee $115.38 quarterly
EcoSure Fee $322.51 twice per year