Nathans Famous
Nathan's Famous offers franchises for fast-service restaurants known for their hot dogs and crinkle-cut fries. Operating since 1916, it's a well-known name in the quick-service food industry.
About Nathans Famous
Nathan's Famous, Inc., is an American company that operates a chain of fast-food restaurants specializing in hot dogs. The original Nathan's restaurant stands at the corner of Surf and Stillwell avenues in the Coney Island neighborhood of Brooklyn, New York City. Its restaurants are primarily in the Northeastern United States. The company's headquarters are at One Jericho Plaza in Jericho, part of Oyster Bay, New York.
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Nathans Famous franchise FAQ
How much does it cost to open one — the total initial investment?
The estimated total initial investment necessary to begin operation of a "Nathan's Famous" restaurant franchise varies widely depending on the type of restaurant operated, ranging from $82,200 to $3,032,610. This includes an initial fee of $30,000 (with different amounts for specific types of restaurants) and does not include co-branding costs [p.1].
What is the initial franchise fee?
The initial franchise fee is Thirty Thousand Dollars ($30,000) [p.89]. However, if you operate from a Kiosk or Mobile Unit, the initial franchise fee would be $15,000 instead [p.16]. This fee is nonrefundable in all cases [p.89, p.16].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 5.5% of the Gross Sales of the Franchised Business [p.89]. The Advertising Fund, which includes marketing expenses, may also be used to provide rebates or reimbursements to franchisees for local expenditures on approved products, services, or improvements [p.111].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
According to [p.155], any proposed sale or transfer of the Kiosk is deemed a sale or transfer of 'substantially all of the assets of the franchised business,' and thus must comply with the provisions of Section 12.4 of the Agreement.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement under any grounds permitted by law, as stated on pages [p.289], [p.288], and [p.289]. This isn't specified in more detail regarding specific grounds within these excerpts.
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a franchisee, you must demonstrate adequate financial resources and capital to operate the business [p.174]. This includes having good moral character, a business reputation, and a credit rating, along with the aptitude and ability to conduct the business [p.174] [p.122]. However, specific net worth or liquid capital requirements are not detailed in these excerpts.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. The franchise is non-exclusive, meaning that both you and other franchisees can operate in the same general area without being mutually exclusive to each other [p.49, p.84]. This also applies to any potential competition from outlets owned by the company or other channels of distribution [p.50].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program at a designated location, typically in the New York metropolitan area or their corporate headquarters. This includes classroom sessions where adherence to policies and personal appearance standards is mandatory. The franchisor also offers ongoing refresher courses, seminars, and additional training programs as needed. All initial training costs are covered by the franchisor, but expenses like transportation, lodging, meals, and wages are the franchisee's responsibility [p.47].
How many franchised outlets are there, and how many have closed or been terminated?
As of March 31, 2024, there were 71 domestic franchised Restaurants (including 25 franchised 'Miami Subs' restaurants that conduct Nathan's Famous Co-Branded Operations) and 81 locations that conduct Nathan's Branded Menu Program Operations. The FDD does not specify the number of franchises that have closed or been terminated, but it lists the names and contact information of franchisees who have had their agreements terminated, canceled, or otherwise ceased to do business under a franchise agreement in Exhibit J-1 (for Nathan's Famous operations) or Exhibit J-2 (for Miami Subs operations). [p.78]
Does the franchisor share any financial performance or earnings information?
The franchisor does not provide any financial performance or earnings projections [p.66]. They also do not authorize their employees or representatives to make any representations regarding revenues, profits, or operating costs of a franchise operation [p.275]. However, if you are purchasing an existing outlet, the franchisor may provide actual records of that specific location's performance [p.66].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the menu items, products, and services expressly approved in writing by the franchisor. You must not sell any other kind of service or product without first obtaining their written consent [p.56]. Additionally, you must buy all equipment, ingredients, and other supplies used in preparing these items from NFSI or an authorized vendor as specified [p.196].