Scramblers
Scramblers is an Ohio-based restaurant franchise offering franchises to operate Scramblers restaurants. Known for quick-service dining, it requires a significant investment of $535,000 to $1,083,000 per unit or more for multiple units. Part of the broader fast-food industry.
Scramblers franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to begin operation of a single-unit Scramblers restaurant is between $535,000 and $1,083,000. This includes a mandatory payment of $40,000 to the franchisor [p.1].
What is the initial franchise fee?
The initial franchise fee is $40,000 unless you are operating 4 or more Scramblers restaurants at the time you sign the agreement and are in compliance with all agreements, in which case it is $30,000. Additionally, if you are currently an employee of the company or a company they own, you receive a $10,000 discount for your first franchise, making the fee $30,000 [p.10, p.67].
What are the ongoing royalty and advertising fees?
The franchisee must pay a royalty fee of 4% of gross sales each accounting period [p.67]. Additionally, there is an obligation to contribute to local advertising funds (LAF) as specified in Item 6 and Item 7, with these contributions credited toward the LAF advertising expenditures required by the Franchise Agreement [p.27]. This isn't specified in the excerpts for exact amounts of ongoing advertising fees beyond the LAF requirement.
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 the FDD, you can transfer ownership of your franchise, but it must be done for good cause as determined by the franchisor. The franchisor also has a right of first refusal if they wish to purchase the franchise instead. [p.6] [p.149]
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement prior to its expiration for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and failing to cure such failure within a reasonable time, typically no more than 30 days [p.6, p.149, p.99].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD excerpts focus on the franchisor’s financial situation rather than the franchisee’s qualifications or required net worth and liquid capital.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You are required to use your best efforts to develop your Franchised Business in the Protected Area, but you may face competition from other franchisees, outlets owned by the company, or other channels of distribution or competitive brands that the company controls [p.31].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training at their restaurant or corporate headquarters before opening the Scramblers restaurant [p.30]. This includes various forms of instruction such as handouts, tours, workbooks, computer training, classroom sessions, field training, and hands-on experience [p.29]. For replacements, the franchisee must ensure that new managers or assistant managers successfully complete the initial training program before taking up their roles [p.65]. The franchisor also offers ongoing support to maintain operational standards, requiring certified personnel at all times [p.73].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2023, there were thirteen franchised outlets in operation. This information is not specified regarding the number of closed or terminated outlets directly from these excerpts. However, it can be inferred that two franchise agreements had terminated by the end of the 2022 fiscal year, one due to the expiration of its term and another because of market factors related to COVID-19 [p.45].
Does the franchisor share any financial performance or earnings information?
The franchisor shares historical financial performance information based on actual annual Gross Sales for both corporate and franchised restaurants that were open and operated by the same owner. This information is provided without an audit, and prospective franchisees can request written substantiation upon reasonable request [p.47]. However, the franchisor does not make any other financial performance representations or projections unless specific conditions are met [p.43].
What am I restricted to selling, and where must I buy supplies?
You are required to sell all food, beverage, other products, merchandise, and services that the franchisor determines from time to time to be appropriate for your Scramblers restaurant. You may have to buy or lease items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than similar items you could purchase on your own [p.3, p.35].