Chilis
Chili's Grill & Bar offers casual dining in full-service restaurants, while Chili's Special Venue provides a more compact option. Known for its bar atmosphere and menu variety, this franchise operates in the casual dining restaurant sector.
About Chilis
Chili's Grill & Bar is an American casual dining restaurant chain founded by Larry Lavine in Texas in 1975 and is currently owned and operated by Brinker International.
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Chilis franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for opening a Chili's Grill & Bar ranges from approximately $4,289,695 to $6,603,695, while for a Chili's Special Venue, it ranges from about $1,864,195 to $5,241,695. These totals include the initial franchise fee and do not cover additional expenses such as site purchase or liquor license acquisition [p.1, p.26, p.30].
What is the initial franchise fee?
The initial franchise fee can vary depending on whether a Development Agreement is signed. If not, it falls within a range that does not include the development fee. For details, refer to [p.28] and [p.340]. This isn't specified in the excerpts for a specific amount or exact range when a Development Agreement is involved.
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 1.25% of Gross Sales [p.206]. Advertising fees are collected through a National Advertising Program, with an unaudited statement of its operations provided upon request [p.229]. The specific percentage for advertising fees is not detailed in these excerpts.
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you generally cannot transfer ownership of your franchise without the franchisor's permission, except for good cause. Good cause includes but is not limited to specific reasons determined by the franchisor [p.5]. This isn't specified in the excerpts.
On what grounds can the franchisor terminate the agreement?
According to the FDD excerpts, a franchisor can terminate an agreement for good cause, which includes 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 (no more than 30 days) to do so [p.5]. Additionally, termination may be allowed under specific state laws or court decisions that can supersede the terms of the franchise agreement, particularly regarding termination and renewal [p.294, p.340].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by the company, or competitive brands controlled by them [p.45]. However, if you sign a Development Agreement, it will grant you a defined Territory, though this is not guaranteed [p.45].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training conducted by certified staff from their Certified Training Restaurants or CTRs, with trainers having at least 6 months of experience. This includes training for the Managing Owner, Operating Partner, and up to five managers. Ongoing support may include additional training fees if more than six representatives are trained, a new manager is hired after the first two restaurants open, or if the opening date is delayed and another initial training session is required [p.203, p.43].
How many franchised outlets are there, and how many have closed or been terminated?
As of the end of their last fiscal year (June 28, 2023), there were 100 franchised Chili's Restaurants. In the last year, a large number of franchised outlets (74) were terminated, not renewed, re-acquired, or ceased operations for other reasons [p.34, p.4]. Additionally, during the last 3 years, a high percentage of franchised outlets (68%) were terminated, not renewed, re-acquired, or ceased operations for other reasons [p.4].
Does the franchisor share any financial performance or earnings information?
The franchisor can provide financial performance information if there is a reasonable basis for it and if such information is included in the disclosure document [p.64]. However, the franchisor does not make any representations about future financial performance or past financial performance of company-owned or franchised outlets, nor do they authorize their employees to make such representations [p.65].
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering only the menu items, products, and services that have been expressly approved in writing by the franchisor. You must purchase all food items, ingredients, supplies, materials, and other products used or offered for sale at the Restaurant solely from suppliers approved in writing by the franchisor [p.33].