Lime House
Lime House Sushi & Ramen offers fast-casual dining with fresh sushi and ramen dishes. Known for its diverse menu options, this franchise operates in the competitive quick-service restaurant sector.
Lime House franchise FAQ
How much does it cost to open one — the total initial investment?
The estimated initial investment for developing one Lime House Sushi & Ramen Restaurant under a Franchise Agreement ranges from $348,278 to $781,653. This includes an amount of $66,557 to $74,447 that must be paid to the franchisor or its affiliates [p.1].
What is the initial franchise fee?
The initial franchise fee is $35,000 and it is non-refundable [p.11, p.18]. This fee applies to a single franchise under a Franchise Agreement [p.210].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a continuing weekly payment equal to 5% of the franchisee's weekly Gross Sales [p.119]. For advertising, all marketing materials used by the franchisee must be pre-approved by the franchisor and conform to their standards [p.30], though the franchisor may provide approved marketing templates at the franchisee's expense [p.30]. Additionally, a Brand Development Fund fee of up to 2% of weekly Gross Sales is required, with the current rate being 1% [p.15, p.49].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in detail here. However, you have the option to renew the franchise for one additional 10-year term under certain conditions [p.3, p.147]. This renewal is not available if the business was previously operated or developed under a prior Franchise Agreement with the franchisor or its predecessors [p.147].
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires Franchisor's approval. The transferee must meet certain criteria including having good moral character, sufficient business experience, aptitude, and financial resources to operate a Lime House Sushi & Ramen Restaurant. Additionally, the transferee cannot own or operate a Competitive Business. This isn't specified in the excerpts.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.234]. Additionally, the franchisor may change its business model or manuals without consent, which could require additional investments or harm the franchise business [p.3], but these changes do not explicitly provide grounds for termination. Good cause for termination includes failure to comply with lawful provisions of the agreement and failing to cure such failures after notice and a reasonable opportunity [p.236].
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 financial requirement details such as net worth or liquid capital needed to qualify for the franchise. However, it does mention that if the franchisor's most recent financial statements are unaudited and show a net worth of less than $100,000, you may request escrow of initial investment funds until obligations related to real estate, improvements, etc., are fulfilled [p.231]. Additionally, franchisees are required to maintain sufficient working capital to fulfill their obligations under the agreement [p.130].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory [p.35]. However, during the term of the Franchise Agreement, provided you comply with your obligations, the franchisor will not establish another Lime House Sushi & Ramen Restaurant in your designated territory [p.35]. This protection does not extend to competition from other franchisees, outlets owned by the franchisor, or other channels of distribution controlled by the franchisor [p.35].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial Training Program that includes classroom and on-the-job instruction, which can be conducted remotely through online web-based conferencing [p.117]. This program is structured by the franchisor and must be completed in phases [p.118]. Additionally, the franchisor may offer supplemental training at the franchisee's location or remotely upon approval, with fees applicable for such services [p.118]. Ongoing training standards are to be maintained by the franchisee, who is responsible for training their employees and staff according to the franchisor’s specifications [p.117].
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 does not make any financial performance representations other than the one provided in Item 19 of the FDD. The franchisor also prohibits its employees or representatives from making such representations either orally or in writing [p.53]. However, if you are purchasing an existing outlet, the franchisor may provide actual records of that outlet's performance [p.53].
What am I restricted to selling, and where must I buy supplies?
You are required to exclusively offer and serve the Approved Services and Products as per the system's standards and specifications [p.127(2)]. Additionally, you must purchase and use System Supplies from the franchisor or its designated suppliers [p.3, p.127(2)(c)-(d)], and also buy interior displays, point of sale displays, uniforms, supplies, marketing materials, and promotional materials as designated by the franchisor, again only from them or their approved suppliers [p.127(2)(e)]. This means you must source a significant portion (approximately 90% in initial setup and 80% ongoing) of your goods and services according to the franchisor's specifications [p.23].