Alamo Drafthouse
Alamo Drafthouse is a theater/restaurant concept offering first-run movies with in-theater food and beverage service. Known for its unique cinema experience, it operates in the entertainment and hospitality industry.
Alamo Drafthouse franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation ranges widely depending on whether you own or lease the land and building. For a new build venue where you own the land and building, the range is from $13,330,166 to $16,112,868. If you lease the building, this cost drops significantly to a range of $5,330,166 to $8,112,868 for a new build venue and $5,048,133 to $8,194,684 for a conversion venue. [p.1]
What is the initial franchise fee?
The initial franchise fee is $125,000 [p.12, p.86, p.123], which is nonrefundable and covers costs such as training, support, software, and general corporate expenses [p.86]. This fee must be paid in full upon signing the Franchise Agreement [p.12, p.123].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 5% of Gross Sales, paid weekly via electronic fund transfer [p.124]. For advertising, franchisees must spend at least 1% of their Venue's Gross Sales annually on local advertising, with quarterly reports required [p.141]. Initially, the Fund contribution (for marketing) is 0.5% of Gross Sales and may be increased up to 1% by the franchisor [p.34].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement and renewal terms are not specified in these excerpts. This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you must sign a general release if you transfer your franchise [p.78]. However, California law specifically voids any waiver of rights under the Franchise Investment Law or the Franchise Relations Act when transferring a franchise in California [p.78]. This isn't specified in the excerpts for other states.
On what grounds can the franchisor terminate the agreement?
This isn't specified in the excerpts. The provided FDD sections discuss termination rights for the franchisee and mention potential legal grounds that could supersede the agreement, but do not detail specific grounds for the franchisor to terminate the agreement.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD excerpts do not detail specific net worth or liquid capital requirements for qualification as a franchisee.
Do I get an exclusive or protected territory?
You do not receive an exclusive territory. However, you are granted a protected territory where competition from other Alamo Drafthouse venues is restricted, though this territory's size can vary based on market factors [p.48].
What training and ongoing support does the franchisor provide?
The franchisor provides initial core training to the Operating Principal and Managers at their corporate headquarters or a designated location [p.36]. This training can last between 6 to 12 weeks depending on the position being trained [p.36]. For new venue openings, a team of up to 24 opening trainers will provide on-site support for up to two weeks before and after opening [p.37]. Additionally, Corporate IT provides standard NVO support packages to assist with planning and implementing computer systems [p.45]. The franchisor also offers additional training programs and seminars that are optional but may be mandatory in certain cases [p.36], and these can cover new products or services [p.36].
How many franchised outlets are there, and how many have closed or been terminated?
At the end of 2022, there were 21 total franchised Venues in the network. This number includes only those that had been open for at least twelve months, as no Venues closed after having been open for less than twelve months are mentioned [p.59]. The FDD does not specify how many outlets have closed or been terminated; it only lists venues that were terminated, cancelled, not renewed, or otherwise ceased to do business during the most recently completed fiscal year [p.276], but this information is not quantified in the provided excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if requested by a prospective franchisee [p.71]. Additionally, the franchisor can include financial performance information for its outlets, provided there is a reasonable basis and it is included in the Disclosure Document [p.58]. However, this information has not been audited [p.59].
What am I restricted to selling, and where must I buy supplies?
You are required to sell all menu items, food products, and other products and services as specified and approved by the franchisor [p.55]. For supplies, you must obtain most items from suppliers approved by the franchisor, with some flexibility for non-proprietary products if approved through a formal process [p.25, p.55]. This includes following specific standards and specifications for both sales and supply procurement [p.3, p.25, p.55].