Newks
Newks offers fast-casual dining with fresh salads, sandwiches, pizzas, soups, and cakes under brands 'Newk's' or 'Newk's Eatery.' Known for its proprietary recipes and menu variety, it operates in the competitive quick-service restaurant sector.
About Newks
Newk's Eatery is an American chain of fast casual cafés which operates over 100 restaurants in 13 states.
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Newks franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Newk's Restaurant franchise ranges from $1,022,000 to $1,414,350. This includes items such as the initial franchise fee, leasehold improvements, and other startup costs but does not include real estate expenses [p.1].
What is the initial franchise fee?
The initial franchise fee is $40,000 and must be paid upon signing the Franchise Agreement. This fee is nonrefundable and covers costs related to training and developing the restaurant [p.15].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 5% of the Net Sales of the franchised restaurant [p.89]. These royalty fees are recognized as revenue based on the occurrence of the underlying franchisee sales transactions [p.208]. Advertising contributions to the advertising fund are considered part of the consideration from franchise agreements and are also recognized over the term of the franchise agreement [p.216].
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.170], a transfer fee must be paid when transferring the franchise. Specifically, if requested by the franchisor, an Area Developer must pay a transfer fee equal to 50% of the current initial franchise fee for one Franchised Restaurant. Additionally, for any transferred Franchise Agreements, a similar transfer fee applies as per the terms of those agreements. However, certain transfers are exempt from this fee if they meet specific conditions related to ownership changes and prior notice [p.170].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if either all monies in a Cooperative Ad Fund have been expended for advertising and/or promotional purposes, or if the franchisor has transferred any unexpended monies to the National Marketing Fund when no longer any Newk's Restaurants operate within the geographic area covered by such fund. [p.112]
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does mention the need for adequate financial resources and capital [p.117], but it doesn't provide specific details on net worth or liquid capital requirements.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You will have a Protected Area defined in your Franchise Agreement, but this area is smaller than the Development Area and may vary based on demographic factors specific to your Approved Location. This Protected Area provides some level of territorial protection, but you may still face competition from other franchisees or outlets controlled by the company. [p.46]
What training and ongoing support does the franchisor provide?
The franchisor provides pre-opening training and opening assistance, covering the establishment and standardization of procedures essential for operating a Newk's Restaurant. They will also offer refresher courses, seminars, and other training programs as needed, not exceeding seven days per person annually, with up to three days allowed for attending conventions. [p.42, p.94]
How many franchised outlets are there, and how many have closed or been terminated?
Based on [p.66], the financial performance representation covers 60 Franchised Covered Restaurants that were open continuously for fiscal year 2024. The excerpts do not specify the number of closed or terminated franchised outlets beyond mentioning exclusions from the AUV information due to various reasons such as new openings, temporary closures, and non-traditional locations.
Does the franchisor share any financial performance or earnings information?
The franchisor does provide financial performance information, specifically the Actual Unit Volume (AUV) data for certain franchised restaurants. However, this information is not intended as a forecast of future earnings and should be considered only as a reference [p.62]. The AUV data is based on weekly sales reports from 60 franchised restaurants that were open continuously during fiscal year 2024 [p.66].
What am I restricted to selling, and where must I buy supplies?
You are limited to offering and selling Products at or from the Franchised Restaurant, specifically for customer consumption on the premises or carry-out. You must purchase all Products and other Required Items solely from manufacturers, distributors, and suppliers approved by the franchisor [p.27]. This includes obtaining prior written approval from the franchisor before purchasing from any supplier other than those previously designated or approved [p.100].