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All American Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for an All American Franchise?
To open an All American franchise, you should prepare for a significant initial investment ranging from $278,285 to $1,594,889. This includes a franchise fee of $30,000. Additionally, you will need to have cash on hand between $30,000 and $150,000, and a net worth requirement of $300,000 to $500,000. These financial commitments are crucial in ensuring you have the resources to successfully launch and operate your franchise.
What Are the Ongoing Fees Associated with an All American Franchise?
As a franchisee, you can expect to pay ongoing fees that include a royalty fee of 5% of your gross revenue and a marketing fee of 5%. These fees are essential for maintaining brand standards and supporting marketing efforts that drive customer traffic to your location. Understanding these costs upfront can help you effectively budget and plan for your franchise’s financial performance.
What Are the Revenue Expectations for an All American Franchise?
All American franchises can anticipate an average annual revenue of approximately $689,143, with a median of $653,902. The revenue can vary widely, with the lowest reported annual revenue at $186,897 and the highest reaching $1,430,651. These figures highlight the potential for profitability, but they also emphasize the importance of effective management and location selection to maximize revenue.
How Long Will It Take to Break Even with an All American Franchise?
Franchisees can expect to reach their breakeven point within 12 months of operation. Moreover, the investment payback period is estimated at 14 months. This relatively quick return on investment can be appealing for aspiring entrepreneurs, but it's vital to execute a solid business strategy and maintain operational efficiency to achieve these timelines.
All American Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
All American Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 242 | 231 | 221 |
| Net Change YoY | -11 | -10 | |
| Franchised Units | 239 | 229 | 219 |
| Net Change YoY | -10 | -10 | |
| Corporate Units | 3 | 2 | 2 |
| Net Change YoY | -1 | 0 |
Investment Overview
The All American franchise chain presents an attractive investment opportunity with an initial investment range from $278,285 to $1,594,889. The initial franchise fee is set at $30,000, with ongoing royalty and marketing fees each at 5%. Prospective franchisees should prepare for a cash requirement between $30,000 and $150,000, alongside a net worth requirement of $300,000 to $500,000.
Financial Performance
Franchisees can expect robust financial performance, with average annual revenue per unit reported at $689,143 and a median of $653,902. The revenue can vary significantly, with the lowest recorded at $186,897 and the highest reaching $1,430,651. This diverse revenue range highlights the potential for profitability within the franchise model.
Breakeven and Payback
The All American franchise has a relatively quick breakeven time of 12 months, allowing franchisees to recover their initial investment swiftly. Additionally, the investment payback period averages around 14 months, making it an appealing choice for those looking to see a return on their investment in a timely manner.
Franchise Growth
The franchise has experienced a slight decline in total units over the past three years, decreasing from 242 units in 2020 to 221 units in 2022. This trend indicates a shift in focus or market conditions, which potential franchisees should consider when evaluating the long-term viability of the brand.
Operating Expenses
Average operating expenses for All American franchisees total approximately $642,430 annually. This includes controllable general and administrative expenses of $75,214 and non-controllable expenses, which encompass royalty and advertising fees, amounting to $245,401. Understanding these costs is crucial for effective financial planning.
Corporate Structure
The All American franchise operates under a well-defined corporate structure, with a mix of franchised and corporate-owned units. As of 2022, there were 219 franchised units and 2 corporate units. This balance allows for a blend of franchisee independence and corporate oversight, providing support while also encouraging entrepreneurial spirit among franchise owners.
Frequently Asked Questions
The initial investment for an All American franchise ranges from approximately $278,285 to $1,594,889, depending on various factors such as location and build-out costs.