Sonnys BBQ
Sonnys BBQ offers full-service family-style barbeque restaurants. Known for their Southern-style barbecue, the franchise provides an investment range of $717,500 to $1,110,500 (excluding real estate) and is part of the casual dining restaurant industry.
About Sonnys BBQ
Sonny's BBQ is a barbecue restaurant chain founded by Floyd "Sonny" Tillman in Gainesville, Florida, in 1968. Bob Yarmuth purchased the company in 1991 and continues as the company's owner and CEO today. As of 2016, Sonny's BBQ has 113 restaurants across eight Southeastern states and is headquartered in Maitland, Florida. The restaurant specializes in Southern-style BBQ.
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Sonnys BBQ franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Sonny's restaurant ranges from $717,500 to $1,110,500 (excluding real estate and building costs). This includes a mandatory payment of $35,000 to the franchisor. [p.1]
What is the initial franchise fee?
The initial franchise fee is $35,000.00, which is non-recurring and non-refundable upon signing of the agreement [p.94, p.11]. This fee is typically paid in two installments, with a $5,000 application fee applied against it at the time of application [p.11].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is currently between 3.5% and 4.5% of gross revenues, while the marketing and advertising fee is between 1% and 2% of gross revenues [p.76]. These fees are recognized as revenue when the franchisee's revenue occurs [p.76].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is twenty years [p.75]. Upon expiration, you have the option to renew for a single ten-year term [p.90], provided you pay a renewal fee equal to the greater of $17,500 or 50% of the current initial franchise fee [p.90].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you can sell or transfer your franchise, but it requires approval from the Company. At the time of the request for approval, the Franchisee or the transferee must pay a transfer fee equal to the greater of $17,500 or 50% of the Company's current initial franchise fee [p.112(g)]. If the transfer does not occur, the Company will refund the excess portion of the fee paid [p.112(g)].
On what grounds can the franchisor terminate the agreement?
The franchisor has the right to terminate the agreement if certain conditions are met, such as violations of the Anti-Terrorism Laws by the developer, developer owners, or their employees [p.200], and also explicitly through the Company's right to terminate stated in Section 16.1 on page 115. Additionally, termination may be due to grounds for default specified in the agreement, though these must constitute 'reasonable cause' under Virginia law [p.223].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific details on net worth or liquid capital requirements for franchisees to qualify. [p.111] mentions that the transferee must have sufficient business experience, aptitude, and financial resources, but it does not detail exact figures for net worth or liquid capital.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by Sonny's, or other channels of distribution or competitive brands that Sonny's controls [p.30, p.184]. This isn't specified in the excerpts for area development agreements either [p.30, p.91].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training of franchisees and staff [p.75], as well as ongoing operations support [p.75]. This training and support are considered part of the single performance obligation related to the transfer of the franchise license [p.74].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2023, there were 90 franchised Sonny's restaurants in the Sonny's franchise system. According to Exhibit A-2, there are 4 franchisees listed who had an outlet terminated, canceled, not renewed, or otherwise ceased to do business during Sonny's most recently completed fiscal year. [p.45]
Does the franchisor share any financial performance or earnings information?
The franchisor can provide financial performance information under certain conditions, such as having a reasonable basis for the information and including it in the disclosure document [p.41]. However, other than the financial performance representation specified in Item 19, the franchisor does not make any financial performance representations and does not authorize its employees or representatives to make such representations either orally or in writing [p.42], [p.89].
What am I restricted to selling, and where must I buy supplies?
You are generally not restricted as to the products you sell in your catering business, but all products used and sold in your catering business must be approved by the franchisor [p.34]. For supplies, you may have to buy or lease items from the franchisor or a limited group of suppliers designated by them, which could be more expensive than other options [p.4]. Specifically, you are required to purchase barbecue sauce, soft drinks, your point-of-sale system, kitchen display system, online ordering technology, guest management software, loyalty and restaurant management software, curbside pickup technology, music packages, core menu items, promotional materials, promotional menu inserts, and gift cards from the franchisor or their approved suppliers [p.19].