Shakeys Pizza Parlor
Shakey's Pizza Parlor offers family-friendly quick-service restaurants serving pizza, salads, chicken, and more in an entertaining atmosphere. Known for its buffet-style Bunch of Lunch® and game rooms, Shakey’s is a traditional player in the casual dining industry.
Shakeys Pizza Parlor franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary for a traditional Shakey's Restaurant ranges from $624,000 to $2,204,500. This includes a mandatory payment of $35,000 that must be paid to the company [p.1].
What is the initial franchise fee?
The initial franchise fee for a Shakey's Restaurant is $35,000, payable in a lump sum when you sign the Franchise Agreement. [p.12] This fee is nonrefundable and is used to cover training, sales, legal compliance, salary, general administrative expenses, and profit. [p.190]
What are the ongoing royalty and advertising fees?
Ongoing royalties from franchisees are based on a percentage of sales from restaurants operated by franchisees and are recognized at the time the underlying sales occur [p.229]. Advertising fees, which are also based on a percentage of restaurant sales, are collected for use in advertising and promotional programs designed to increase sales and enhance the reputation of the Company and its franchise owners [p.211]. These contributions are recorded as revenue by the Company [p.237].
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, a franchisor can refuse to permit the transfer of ownership of a franchise except for good cause [p.5]. Good cause includes but is not limited to unspecified factors. Additionally, Shakey's approval of a transfer does not guarantee the fairness of terms or the success of the restaurant post-transfer [p.76].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement 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 after being given written notice and a reasonable opportunity, not exceeding 30 days, to do so. [p.5]
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?
No, you do not receive an exclusive territory. Your rights are limited to a 'Protected Area' typically around your Restaurant within a radius of 1-3 miles, based on demographics and other considerations [p.29]. This area is not guaranteed and can be altered by mutual agreement or unilaterally by the franchisor for demographic changes or to meet delivery standards [p.30]. Additionally, you are granted a Development Area if you sign an Area Agreement, but this too does not provide exclusivity [p.30].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for you and your management team if it is your first location or if you are opening the first location in a new development area [p.28]. Additionally, you must attend and complete an initial training program on the operation of a Shakey's Restaurant to Shakey's satisfaction before opening, and periodic or additional training programs may be required [p.58]. This isn't specified in the excerpts for ongoing support beyond these training requirements.
How many franchised outlets are there, and how many have closed or been terminated?
There are currently 25 franchised Shakey's Restaurants operating in the United States. Additionally, all corresponding Mexican locations operated by Shakey's Mexico, LLC were closed during November 2020 after their franchising agreement was terminated [p.229].
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if you are purchasing one, but they do not make any representations about future financial performance or past performance of company-owned or franchised outlets. Additionally, they do not authorize their employees or representatives to make such representations either orally or in writing [p.38, p.39].
What am I restricted to selling, and where must I buy supplies?
You are not specifically restricted to selling any particular items, but you may have to buy certain supplies from the franchisor or designated suppliers. For example, you must purchase or lease fixtures, furnishings, signs, equipment, point of sale/computer systems, products, ingredients, and paper goods in accordance with the franchisor's standards and specifications [p.18]. Additionally, you are required to buy your full requirement of proprietary spice blends and mixes from approved suppliers licensed by the franchisor [p.18]. This isn't specified in the excerpts for other specific selling restrictions.