Long John Silver’s Franchise Cost & Fees

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Description

Long John Silver’s is America’s largest quick-service seafood chain with more than 1,200 units worldwide. The first Long John Silver’s Fish ‘n’ Chips opened in 1969 in response to growing consumer demand for quick-service seafood. This new approach gained overwhelming acceptance and has led to bold modern restaurants and a menu that meets the taste of today’s consumers. As the concept has grown, Long John Silver’s menu has likewise evolved. Today, they offer a menu that meets the desire of consumers looking for more variety and great taste. Their exciting array of flavor profiles and taste sensations includes a variety of signature batter-dipped fish, chicken, and seafood; breaded fish; a signature sandwich line; salads and desserts.

Year Business Began: 1969

Franchising Since: 1969

Headquarters: Louisville, Kentucky

Estimated Number of Units: 1,000

Franchise Description: The franchisor is Long John Silver’s, LLC. Long John Silver’s (sometimes referred to as “LJS”) is a United States-based fast-food restaurant that specializes in seafood. Long John Silver’s restaurants offer a limited menu featuring fish, seafood, chicken and related items. The restaurants are designed to serve food promptly and offer dine-in, take-out and in a significant number of restaurants, drive-thru service. The restaurant must be built to the franchisor’s specifications and operated in accordance with LJS’s standards. There are three types or restaurants: traditional, co-brand, and express.

Training Overview: For Traditional Restaurants and Express Restaurants, LJS certifies franchisee-owned training units at locations determined by the franchisor for training and those of the franchisee’s employees as it deems necessary. Training is currently conducted at franchisee-owned restaurants and at meeting facilities such as hotels and/or convention centers at various locations throughout the United States. For Co-Brand Restaurants, the franchisor upon request provides franchisees with a pre-opening management training program and other training at the locations and for the periods as the franchisor customarily provides LJS franchisees. The franchisor will provide a pre-opening management training program at locations and for periods of time as it designates. Four managers for a Traditional Restaurant, one manager for an Express Restaurant and five managers for a Co-Brand Restaurant must be certified by completing training in a certified LJS training restaurant to the franchisor’s satisfaction within 30 days before opening. The franchisee or Above Restaurant Leader must also attend training if they are not a manager. The franchisor may require and provide refresher courses and retraining programs for the franchisee’s executive, managerial, supervisory and other employees as designated by LJS. Additional training classes may be offered or required for restaurant management teams and above store managers.

Territory Granted: Franchisees of Traditional Restaurants will be authorized to operate one Traditional Restaurant at a specified address. The Territory for a Traditional Restaurant is typically a one and one-half mile radius from the Traditional Restaurant. If a Traditional Restaurant is in a convenience and gas store, the Territory is generally a one mile radius from the Restaurant.

The franchisor determines the Territory for Traditional Restaurants in its sole discretion and may base its determination on anticipated customer counts and other factors. Except as described in the FDD, the franchisor will not operate or franchise others to operate a Restaurant within a Territory equal to the smaller of a circle created by a 1.5 mile radius as measured from the center of a Co-Brand Restaurant or a circle measured from the center of the Co-Brand Restaurant within which a population of 30,000 people reside and/or work. The franchisor generally does not grant any protected Territory for Express Restaurants.

Obligations and Restrictions: Franchisees do not have to participate personally in the direct operation of their restaurant, but the franchisor strongly recommends direct personal participation. If franchisees are a corporation, limited liability company or partnership, or if franchisees will not personally supervise restaurant operations, they must designate at least one on-premises supervisor (manager). The manager, and other of the franchisee’s employees as the franchisor designates, must successfully complete LJS’s training programs. Franchisees may sell only those food and beverage products that the franchisor designates in the Operations Manual and meet the standards contained in the Operations Manual.

Term of Agreement and Renewal: The term of the agreement is generally 20 years with two five-year options or concurrent with lease term not to exceed a total of 30 years. Renewal terms are subject to the franchisee being in good standing and complying with renewal conditions.Financial Assistance: The franchisor does not offer, directly or indirectly, any arrangements for financing the franchisee’s initial investment or the continuing operation of the LJS business. The franchisor does not guarantee a franchisee’s note, lease or obligation.

Investment Tables: 

Estimated Initial Investment
Name of Fee Low High
Real Estate Varies
Construction Costs $2,000 $900,000
Furniture, Fixtures & Equipment $5,000 $300,000
Signage/Awnings $4,000 $75,000
Computer Equipment $6,500 $28,000
Initial Franchise Fee $10,000 $20,000
Training Expenses $6,000 $25,000
Start-Up Inventory $3,000 $20,000
Pre-Opening and Opening Advertising Fee $0 $12,000
Security Deposit, Utilities Deposits, Licenses and Other Prepaid Expenses $3,000 $30,000
Support Services Agreement One-Time Charge $750 $2,500
Additional Funds – 3 month $10,000 $200,000
ESTIMATED TOTAL* (excluding real estate costs) $50,250 $1,612,500

*

Disclaimer : The above information has been taken from the FDD of Long John Silver’s. Year of FDD: 2018

 

Other Fees
Type of Fee Amount
Royalty 5% of gross receipts for Traditional Restaurants and Co-Brand Restaurants; 2.5% of gross receipts for Express Restaurants
Advertising 5% of gross receipts for Traditional Restaurants and Co-Brand Restaurants; 1% of gross receipts for Express Restaurants
Cost of Testing Products and Equipment The franchisor’s actual costs.
Transfer $2,000 per Franchise Agreement transferred. Cost varies if transferring multiple Franchise Agreements.
Audit Costs and expenses of audit, and interest of (i) the maximum permitted by Kentucky law or (ii) 1.5% per month from the due date until paid on any understated or underpaid amount, if Understatement or underpayment is 3% or more.
Late Fee The lesser of (i) the maximum permitted by Kentucky law or (ii) 1.5% per month from the due date until paid.
Indemnification Will vary.
Attorney’s Fees and Costs The franchisor’s actual costs.
Liquidated Damages Amount equal to the gross receipts for the 12 month period immediately preceding the termination or breach multiplied by a factor equal to 2 times the royalty rate.
Insurance Premiums Will vary.
Supports Services Agreement Fees $1,800-$2,400 annual charges for Traditional Restaurants and Co-Brand Restaurants; $1,140-$1,440 annual charges for Express Restaurants
Standards Excellence Review The franchisor may cause a third party vendor to conduct Food Safety Audits of the Restaurant. The franchisor currently does not charge franchisees any fees for the first assessment, but they will be required to pay for reassessments after a failure and in the case of a refused entry.
Customer Loyalty Tool $288-$325 annual charges per restaurant.