Gyu Kaku
Gyu Kaku offers yakiniku restaurants where customers cook meats, seafood, and vegetables on charcoal roasters. Known for its proprietary dipping sauces and state-of-the-art cooking systems, it operates in the Japanese-style grill restaurant sector.
Gyu Kaku franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for opening a Licensed Restaurant is not specified in the provided excerpts. The costs can range widely depending on whether you lease or purchase a location, with typical estimates suggesting that the initial investment could be substantial, potentially ranging from 72% to 90% of the total initial investment [p.21].
What is the initial franchise fee?
The initial franchise fee is $50,000 per restaurant for a typical ten-year term. For additional restaurants opened by existing franchisees, the initial fee is $25,000 for a ten-year term [p.9, p.127]. Half of this fee ($25,000) is due and payable upon signing the Franchise Agreement and is not refundable [p.9].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 0.3% of the gross profit margin in the restaurants [p.130, p.114]. Additionally, each restaurant operated by the company or its affiliates contributes to the advertising program as if it were a franchised restaurant, and any excess funds can be accumulated for later use [p.26].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is typically ten years [p.112]. Absence of any financial and/or compliance issues, a franchisee will generally renew their agreement for an additional term upon expiration [p.127].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot sell or transfer your ownership of the franchise without good cause as determined by the franchisor [p.152]. The franchisor may exercise a right of first refusal to purchase the franchise in such cases.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so [p.152]. Additionally, the franchisor can terminate the agreement if there is mutual agreement in writing between both parties to not renew or terminate the franchise [p.147]. This isn't specified in the excerpts for other specific grounds of termination.
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a franchisee, if your entity has a net worth of at least $1,000,000 (as verified by its financial statement), no written guaranty will be required from your Principal Equity Owners. Additionally, you should have some cash reserves available to cover initial operating expenses, though specific amounts are not detailed in the excerpts [p.7, p.17].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You will face competition from other franchisees, outlets owned by the franchisor, and other channels of distribution or competitive brands controlled by the franchisor [p.30]. However, the franchisor and its affiliates are prohibited from opening or operating any Traditional Restaurants within your defined Territory during the term of the Franchise Agreement [p.53] [p.99].
What training and ongoing support does the franchisor provide?
The franchisor provides an Initial Training Program as specified on [p.30], but it may not be provided if the prospective franchisee already owns a similar business or is renewing an agreement. Ongoing support includes quarterly conferences with optional additional training courses, which may cover topics like new procedures, marketing strategies, and operational improvements ([p.64]). The franchisor also has the right to enter the licensed restaurant for training purposes at any time ([p.64]).
How many franchised outlets are there, and how many have closed or been terminated?
The FDD does not provide information on the number of closed or terminated franchised outlets. It only states that as of January 31, 2023, there were 10 franchised Outlets open and operating in Canada [p.41]. This isn't specified in the excerpts for the other aspects of your question.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information if it has a reasonable basis and either actual records from an existing outlet are provided, or additional information is given under specific circumstances. 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 employees to make such claims [p.39].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only those Authorized Gyu-Kaku Products that have been approved by the franchisor [p.34]. Additionally, you must purchase and maintain in stock proprietary products, sauces, marinades, beverages, food products, and other ingredients from RIU or a supplier designated by the franchisor [p.20], as these items are required to be grown, produced, or manufactured according to their trade secrets, proprietary recipes, specifications, and formulas.