Schlotzskys
Schlotzsky's offers quick-casual dining with premium sandwiches, pizzas, and more in a restaurant format. Known for its unique menu offerings, Schlotzky's franchises typically require purchasing an additional Cinnabon Express inside each location.
About Schlotzskys
Schlotzsky's is an American franchise chain of restaurants, specializing in sandwiches and pizza. The company is headquartered in Atlanta, Georgia. Schlotzsky's has over 310 franchised and company-owned locations throughout the United States. Most locations are in the south and southwestern United States, but the company is expanding into areas across the country, particularly the north and southeast.
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Schlotzskys franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Schlotzsky's® franchise with a Cinnabon® Express inside it ranges from $647,875 to $1,951,300. This includes payments ranging from $36,030 to $103,734 that must be paid to the company or its affiliates [p.2].
What is the initial franchise fee?
The initial franchise fee is $35,500 and it is fully earned and nonrefundable upon signing the Franchise Agreement [p.28, p.148].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is non-refundable and must be paid at times specified in Schedule A [p.148]. There is also a possibility of paying an agreed minimum royalty during periods when the Franchised Business is not in operation [p.154]. For advertising, you may need to conduct grand opening advertising as required by the franchisor, with approval and implementation details provided [p.163].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The provided FDD does not contain information about the duration of the initial franchise agreement or options for renewal.
Can I sell or transfer my franchise, and what does that require?
Yes, you can transfer your franchise ownership, but it requires giving advance notice and submitting requested information. The transferee must meet certain conditions, and a transfer fee equal to 10% of the initial franchise fee is required. Additionally, the franchisor may withhold consent for any reasonable grounds or subject it to reasonable conditions [p.186].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if there is good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and not curing such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so [p.6].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
You do not receive an exclusive territory. You will receive limited protected rights (an 'Area of Protection') in your designated location, but you may face competition from other franchisees, outlets owned by the company, or other competitive brands controlled by them [p.76]. The specific details of your Area of Protection depend on whether a location is accepted and documented through an addendum to the Franchise Agreement [p.77].
What training and ongoing support does the franchisor provide?
The franchisor provides certain support and services through a management agreement with GoTo Foods, which may delegate some responsibilities to affiliates. However, the franchisor remains responsible for ensuring all promised services are performed in compliance with the Franchise Agreement [p.59, p.11]. Additionally, franchisees who meet specific requirements can provide portions of the Management Training Program on behalf of the franchisor [p.73]. This isn't specified in the excerpts regarding initial or ongoing training fees related to developing or implementing standards under the Fast Food Act [p.290].
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 provide specific financial performance or earnings information except as may be stated in the FDD. If such information is provided, it must have a reasonable basis and be included within this disclosure document [p.88]. Additionally, written substantiation for any financial performance representation can be made available upon reasonable request [p.90].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the Approved Products that the franchisor has approved in writing. This includes menu items, Trademarked Product Lines, and other products and services specified by the franchisor [p.82]. You may have to purchase or lease certain equipment from an Approved Supplier that complies with the franchisor's Standards [p.49]. Additionally, you might need to buy items from suppliers designated by the franchisor, which could be more expensive than other options [p.4].