Broken Yolk Cafe
Broken Yolk Cafe offers moderately-priced, freshly-cooked homestyle meals in a casual atmosphere, specializing in breakfast and lunch with off-premise catering options. Known for its area development agreements and single-restaurant franchise opportunities, it operates in the casual dining restaurant industry.
About Broken Yolk Cafe
The Broken Yolk Cafe is an American restaurant chain serving American breakfast foods, mixed with Tex-Mex cuisine. Founded in 1979, it has 42 locations as of 2026, primarily based in Southern California, with additional restaurants situated throughout other areas of the Western United States. The restaurant operates for breakfast, brunch, and lunch, and is most known for its Eggs Benedict.
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Broken Yolk Cafe franchise FAQ
How much does it cost to open one — the total initial investment?
The total estimated investment necessary to begin operation of a single Broken Yolk Cafe ® Restaurant ranges from $543,950 to $1,627,500. This includes a $20,000 Initial Franchise Fee and a $25,000 Training and PreOpening Support Fee paid to the company, as stated on [p.2].
What is the initial franchise fee?
The initial franchise fee includes both pre-opening support services and the use of the license and intellectual property. It is typically split into two parts: one half ($5,000) towards the Development Fee (which is credited toward the Initial Franchise Fee and Training & Pre-Opening Support Fee for each Restaurant), and the remaining half towards the Initial Franchise Fee itself [p.125]. This fee is considered fully earned by the Company upon execution of the Agreement [p.125], and it constitutes part of their general operating funds as discretionally used [p.90].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is up to 4% of the gross sales of each restaurant operated by each franchisee, while the advertising fee is 1% of the franchise's gross sales. These fees are recognized monthly when the sales are reported by the franchisees [p.108].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement generally lasts for 20 years [p.107]. According to [p.54], there are provisions that prevent the franchisor from awarding a franchise location in the same area during this term. Regarding renewal, while specific terms aren't detailed in these excerpts, you can be refused renewal without fair compensation unless certain conditions are met, such as the franchise term being less than 5 years and specific notice requirements not being satisfied [p.6].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot sell or transfer your franchise without the prior written consent of the Company [p.150]. However, certain transfers due to permanent disability, by will or intestate succession, or through a conservator, executor, or administrator are exempt from this requirement and do not incur a transfer fee [p.147]. The Company must approve the qualifications of any heir or beneficiary; if not approved, you have 12 months to sell the franchise to an acceptable assignee, with the Company having a right of first refusal during this period [p.147].
On what grounds can the franchisor terminate the agreement?
The franchisor may terminate the franchise agreement if there is good cause, such as the failure of the franchisee to comply with any lawful provision of the franchise agreement and failing to cure such failure after being given written notice and a reasonable opportunity to do so, which cannot exceed 30 days. This information can be found on [p.6] of the FDD excerpts provided.
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a franchisee, you must be financially responsible, possess a favorable credit rating, be economically capable of carrying on the Restaurant business, and have sufficient net worth as required by the Company [p.145]. The specific amount of liquid capital needed is not detailed in these excerpts; however, you will need additional funds to cover initial expenses such as payroll and utilities for your first 3 months of operations [p.25, p.29].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. According to [p.54], you may face competition from other franchisees, outlets owned by the company or its affiliates, and other competitive brands controlled by them. The FDD also states that you must obtain approval for each Restaurant location and the company can open additional restaurants in your designated area at its discretion ([p.117] and [p.54]).
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for up to 5 attendees designated by the franchisee, including site review and development guidance [p.14]. Additionally, the franchisor requires that managers, including an Operations Director, complete its management training program and be ServSafe certified before operating a Restaurant [p.146]. Ongoing support includes travel, lodging, transportation costs, and operational support through a third-party consulting company [p.108].
How many franchised outlets are there, and how many have closed or been terminated?
The reporting Restaurants comprise the total number of franchised Broken Yolk Café ® Restaurants operating for that calendar year. Four additional franchised Broken Yolk Café ® Restaurants opened during 2024 but did not operate for the full calendar year and are therefore not included in the figures. The document does not specify how many outlets have closed or been terminated, stating that there were no franchisees who had an outlet terminated, canceled, not renewed, or otherwise ceased to do business under the franchise agreement during the most recently completed fiscal year or within 10 weeks of the issuance date of this Disclosure Document [p.80].
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations other than the one specified in Item 19. They do not authorize their employees or representatives to make such representations either orally or in writing [p.77]. However, if you are purchasing an existing Restaurant, they may provide actual records of that Restaurant's performance [p.77].
What am I restricted to selling, and where must I buy supplies?
You are required to sell only approved products, merchandise, and services as specified by the franchisor, including items from their standard Broken Yolk Cafe® menu and any specials or featured items they may designate. You must also offer these authorized products and services to all customers without limitation [p.62]. Additionally, you may have to buy or lease certain items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than alternatives [p.4]. This isn't specified in the excerpts regarding where you must buy supplies; however, it implies that you are not restricted to purchasing from specific locations beyond the approved suppliers.