Rachels Kitchen
Rachel's Kitchen offers breakfast, lunch, and dinner menus in restaurants branded as Rachel's Kitchen, Little Rachel's Kitchen, or Rachel's Kitchen Express, focusing on a variety of menu items including breakfast dishes, soups, salads, and burgers. Known for its proprietary recipes and formulas, it operates in the casual dining restaurant industry.
Rachels Kitchen franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Rachel's Kitchen franchise ranges from $46,500 to $52,000 that must be paid to the franchisor and/or its affiliate [p.1]. However, this amount does not include other expenses such as leasehold improvements, POS systems, or additional funds needed for start-up operations [p.17, p.19, p.26].
What is the initial franchise fee?
The initial franchise fee is $40,000 for the first Restaurant. For subsequent Restaurants, the fee decreases to $30,000 for the second and $20,000 for each additional Restaurant you commit to open under the Area Development Agreement [p.10, p.210].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is six percent (6%) of the Gross Sales of the Franchised Restaurant [p.77]. Additionally, a marketing fee equal to two percent (2%) of the Gross Sales must be paid weekly and in the same manner as the Royalty Fees [p.102].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The provided FDD does not mention the duration of the initial franchise agreement or the renewal process beyond stating that a general release must be signed if you renew or transfer your franchise [p.162, p.166].
Can I sell or transfer my franchise, and what does that require?
This isn't specified in the excerpts. The provided FDD sections do not detail the process for selling or transferring a franchise. For specific information on this topic, you would need to refer to the full franchise agreement or contact the franchisor directly.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if a mutually acceptable site cannot be agreed upon within 120 days after signing [p.79], or if they choose to terminate any Cooperative Ad Fund under specific conditions [p.103]. This isn't specified in the excerpts for other grounds of termination.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD mentions that a transferee must have adequate financial resources and capital to operate the Franchised Restaurant [p.108], but it does not provide specific details on net worth or liquid capital requirements.
Do I get an exclusive or protected territory?
Your territory is generally protected, but non-traditional sites such as airports, hotels, and hospitals are excluded from your protected area. You will have no rights to these specific locations within your Development Area [p.34, p.73]. Additionally, upon the expiration of the term or execution of a Franchise Agreement for the last restaurant in the Development Area, your exclusive rights terminate, allowing us to operate and grant franchises to others within the Development Area [p.37].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for approximately 10 days at their headquarters in Las Vegas or another designated location [p.31], which they bear the cost of [p.32]. Additionally, pre-opening training and opening assistance are conducted at your Franchised Restaurant for up to five days before and after opening, with costs also borne by the franchisor [p.28]. The franchisor may require ongoing refresher courses and seminars not exceeding three days per year, either at their headquarters or a convention, where they cover the cost if it's conducted at their premises [p.32]. This training is mandatory for franchisees to complete satisfactorily [p.6.1.2].
How many franchised outlets are there, and how many have closed or been terminated?
Based on the provided excerpts, there are 7 franchised operated Rachel's Kitchen Restaurants in total. However, only the gross sales of 6 restaurants are included due to one restaurant operating only 6 days a week and being excluded from the chart [p.48]. This isn't specified in the excerpts regarding closed or terminated outlets.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations [p.48], and its employees or representatives are not authorized to make such representations either orally or in writing [p.149, p.238]. However, if you are purchasing an existing outlet, the franchisor may provide actual records of that outlet's performance [p.48]. Additionally, financial performance information can be included in Item 19 of the disclosure document if there is a reasonable basis for it and if the information is substantiated by written records [p.47].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling Products at the Franchised Restaurant for customer consumption on the premises or carry-out, and you may not sell any Products wholesale, through catalogs, mail order, toll-free numbers, or electronic means like the Internet [p.72]. You must purchase all Restaurant Items from suppliers approved by the franchisor, which may include a designated computer software and POS system supplier, as well as other items that meet the franchisor's standards and specifications [p.20].