Fatburger
Fatburger is a fast-casual hamburger chain offering customizable burgers and fries. Known for its fresh ingredients and creative toppings, it operates in the competitive quick-service restaurant sector.
About Fatburger
Fatburger North America Inc. is an American fast casual restaurant chain owned by FBG Bid Co. Its tagline is The Last Great Hamburger Stand. While it is a fast-food restaurant, the food is cooked and made to order. Some Fatburger restaurants have liquor licenses as well as "fat bars". Its franchise headquarters are located in Beverly Hills, California. In addition to the United States, the chain operates in 19 other countries. The Fatburger menu is centered primarily on hamburgers, offering various sizes and numbers of patties, along with add-ons such as cheese, bacon and eggs.
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Fatburger franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of one Fatburger Restaurant ranges from $509,300 to $1,996,900. This includes an initial fee of $50,000 per restaurant that must be paid to the franchisor or its affiliates. [p.1]
What is the initial franchise fee?
The initial franchise fee is $50,000 when you sign the Franchise Agreement [p.22]. This fee is fully earned and non-refundable upon execution of the agreement [p.108].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a percentage of Net Sales, paid weekly during the term of the agreement [p.108]. Additionally, franchisees must pay an advertising contribution based on a percentage of net sales [p.97].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is typically for 15 years with two additional 10-year options available [p.96]. The agreement will automatically renew for successive one-year terms unless either party provides written notice of non-renewal at least 60 days prior to the then-current term's expiration [p.273].
Can I sell or transfer my franchise, and what does that require?
According to the FDD excerpts, a franchisor can generally refuse to permit the transfer of ownership of a franchise except for good cause [p.311]. Good cause is defined but not fully detailed in these excerpts [p.5]. Therefore, specific requirements or criteria for transferring your franchise would need to be reviewed directly within the franchise agreement.
On what grounds can the franchisor terminate the agreement?
According to the FDD excerpts, a franchisor can terminate a franchise agreement prior to its expiration 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, p.521].
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?
You do receive a protected territory, but it is not exclusive. Your protected territory (the 'Protected Territory') will be described in an attachment to your Franchise Agreement and typically covers a one-mile radius of the Restaurant, though this can vary based on factors like population density. However, you may face competition from other franchisees, outlets owned by the company, or other competitive brands within this area. [p.57]
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program for the franchisee's management team, including executive training for owners and a general manager training program. This training is supervised by FAT’s Director of Training, Jennifer Bonilla. The franchisor also offers customer support services related to the Brand Technology System, but if issues could have been resolved through proper training, the franchisee may be invoiced for such support at current hourly rates [p.278].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
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 it is included in the disclosure document. However, they do not make any financial performance representations other than those specified, nor do they authorize their employees or representatives to make such representations [p.81]. For existing outlets, actual records may be provided upon request [p.81].
What am I restricted to selling, and where must I buy supplies?
You are required to sell only those menu items and products that the franchisor has approved [p.39, p.62]. You must purchase merchandise from suppliers designated by the franchisor [p.117], and you may have to buy or lease certain items from the franchisor or a limited group of suppliers they designate [p.3].