Long John Silvers
Long John Silvers offers quick-service seafood restaurants, known for their fish and chicken dishes. Part of the casual dining industry, it requires significant investment to open a franchise.
Long John Silvers franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation under a Development Agreement ranges from $1,090,000 to $4,177,500 for establishing your first Restaurant. This includes a development fee of $17,500 per Restaurant (minimum 2 Restaurants) and does not include the cost for establishing any additional Restaurants or real estate costs. [p.1]
What is the initial franchise fee?
The initial franchise fee varies based on the type of restaurant: - For a Non-Traditional Restaurant, it is $20,000 [p.14, p.23]. - For a Traditional Restaurant, it is $35,000 [p.14, p.20].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 5% of the franchisee's gross receipts, paid monthly by the 20th day of each month. For traditional restaurants, there is also an initial $20,000 grand opening marketing contribution for pre-opening and opening advertising expenses [p.35].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is generally 20 years for a LJS Traditional Restaurant, with an option to renew for two consecutive five-year terms. For a LJS Non-Traditional Restaurant, the initial term is generally 10 years, though this may be negotiated on a case-by-case basis and has no option to renew [p.9]. To exercise any option to renew, you must meet certain criteria, including remodeling the LJS Restaurant to the franchisor's then-current standards [p.9].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you can sell or transfer your franchise interest upon dissolution or death of Franchisee, with the personal representative or trustee obtaining consent from the franchisor if a bona fide offer is not accepted [p.129]. Additionally, you may be able to sell or assign your interest in certain circumstances, such as the death or dissolution of a stockholder, member, or general partner, subject to conditions set forth in the agreement [p.347]. This isn't specified in the excerpts for other voluntary transfers without these specific scenarios.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if the franchisee fails to comply with any lawful provision of the franchise agreement and does not cure such failure within a reasonable time, which cannot exceed 30 days [p.332]. This is subject to state law, including Illinois law as specified in section 705/19 and 705/20 of the Illinois Code [p.329].
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 details on net worth or liquid capital requirements for qualification as a franchisee. However, it does state that financial statements and other financial information will be required to assess your capability to develop and operate the restaurant [p.229].
Do I get an exclusive or protected territory?
No exclusivity or protected territory is provided under this agreement. Franchisees do not receive territorial protection [p.173], and the franchisor retains discretion over the operation and franchising of restaurants, including those offering similar products [p.468] and may engage in business activities wherever they desire [p.173].
What training and ongoing support does the franchisor provide?
The franchisor provides pre-opening and ongoing training programs for franchisees and their employees [p.39]. Additionally, the franchisor certifies training units and determines the number of employees to be trained, the necessary training period, and whether they have satisfactorily completed it [p.101]. This includes ensuring that at least three managers per restaurant are certified and trained for the first two restaurants, with at least one fully trained manager required for subsequent locations [p.101].
How many franchised outlets are there, and how many have closed or been terminated?
There are a total of 170 single-brand Long John Silver's restaurant units franchised by LJS. However, this number does not include the status of any outlets that may have closed or been terminated, as the provided excerpt [p.72] only lists franchisees who had signed agreements but not yet opened their outlets as of December 29, 2024. This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if you are purchasing one, but they do not make representations about future or past financial performance. They also do not authorize their employees or representatives to make such representations [p.53]. Any financial performance information must be reported to the franchisor's management and relevant regulatory bodies if received from another source [p.53].
What am I restricted to selling, and where must I buy supplies?
You are generally required to purchase between 90% and 95% of your total purchases for both establishing and operating the restaurant from the franchisor (LJS), its affiliates, or approved suppliers. This includes refraining from selling certain food items within the structure where the LJS Non-Traditional Restaurant operates and limiting sales of adult-related products. [p.27] [p.47]