Garbanzo
Garbanzo Mediterranean Fresh offers Mediterranean cuisine franchises featuring hummus, falafel, and shwarmas in casual dining restaurants. Known for authentic Middle Eastern flavors, it operates in the quick-service restaurant sector.
Garbanzo franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operating as a multi-unit owner ranges from $581,500 to $875,000. This includes a development fee of $105,000 upon execution of your development agreement and the initial investment to open and commence operations of the first restaurant within your designated area. [p.1]
What is the initial franchise fee?
The initial franchise fee is $35,000 [p.60]. This fee is non-refundable upon payment and is considered fully earned by Franchisor for administrative and other expenses incurred in granting the franchise [p.60].
What are the ongoing royalty and advertising fees?
The franchisee pays ongoing royalties between 3.00% and 6.00% of net sales (or a minimum as defined) to the company, with these fees billed on a weekly basis and debited from the franchisee's checking account through an ACH transaction initiated by the company [p.175]. Advertising service fees are recognized when related restaurant sales occur, typically billed and paid weekly, and presented as franchise contributions for advertising and other services [p.176].
How long is the initial franchise agreement, and can I renew it?
The length of the initial franchise agreement isn't specified in the excerpts provided. Additionally, whether you can renew the franchise agreement and under what conditions isn't detailed either [p.5].
Can I sell or transfer my franchise, and what does that require?
You can sell or transfer your franchise, but it requires payment of a transfer fee unless certain conditions are met [p.16]. The franchisor has the right to refuse transfers for good cause, which includes but is not limited to unspecified reasons [p.5].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on various grounds, including failure to comply with the franchise agreement and cure such failure after receiving written notice and a reasonable opportunity (no more than 30 days) [p.219]. Additionally, the franchisor may terminate if the franchise does not open within twelve months from the date the franchise agreement is signed for cause [p.219], or if the franchisee voluntarily or involuntarily files for bankruptcy [p.226]. However, termination due to lack of reasonable cause is unlawful under Virginia Retail Franchising Act [p.241].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific requirements regarding net worth or liquid capital needed to qualify as a franchisee. However, it does state that you must maintain sufficient working capital at all times to properly operate your franchised business [p.71]. Additionally, the financial performance representations do not reflect all costs and expenses, so an independent investigation is recommended [p.219].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory; instead, you are provided with a protected territory for your Approved Location. However, the franchisor may operate and license others in captive locations within your Territory. [p.36]
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program lasting about 4 weeks, which includes practical experience in areas such as financial controls, food preparation, operational techniques, marketing, sanitation, maintenance procedures, and quality standards [p.75]. This training is conducted by Katie O'Rourke or a designated trainer, and all related expenses are the franchisee's responsibility [p.75]. Additionally, ongoing support is provided through royalty fees, which are between 3.00% and 6.00% of net sales and billed weekly [p.175]. However, the specific nature and extent of other ongoing support beyond the financial terms are not detailed in these excerpts.
How many franchised outlets are there, and how many have closed or been terminated?
As of September 29, 2024, there were 18 total franchised outlets, with 15 open and operating during the entire 2024 fiscal year. The number of closed or terminated Company-owned locations is specified as seven (7) for the period ending September 25, 2022, and two (2) for the period ending September 24, 2023, but this does not specify the number of franchised outlets that have closed or been terminated. [p.180] This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
Yes, 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.49]. However, the franchisor does not make any financial performance representations other than those specified, nor do they authorize their employees or representatives to make such representations [p.50].
What am I restricted to selling, and where must I buy supplies?
You are restricted from operating a business that sells similar Mediterranean cuisine items [p.117]. You may have to buy or lease items from the franchisor or a limited group of suppliers they designate, which might be more expensive than other options [p.3].