🍟 11/17/2022 – Fried Chicken, Haircuts, and Healthy Profits!
FRANCHISES OF THE WEEK
1) Diesel Barbershop
Fast Facts
Background
- Founded in 2011, franchising since 2017
- Based in San Antonio, Texas; 29 locations open at the start of 2022
- Haircare and grooming services
Fees + Investment
- Royalty: 7.5%
- Brand Fund: 1%
- Franchise Fee: $50,000
- Initial Investment: $322,014 – $432,924
Financial Performance
- The below table disclose average & median gross revenue for 6 affiliate locations in 2021
The Wolf’s Take 🍟
Diesel barbershop is not your average barbershop. They’re mission is to “create a community where clients can come for affordable, luxury, and exceptional grooming in a masculine environment with unmatched energy.”
In addition to haircuts, they have arcade games, and even serve up beers while you’re inside the shop.
While the revenue disclosed in the 6 affiliate locations probably didn’t blow you away, it comes with a healthy margin that results in an average net profit of $149,096 (they disclosed full P&L’s in the FDD – I did not include all the screenshots for brevity’s sake).
If you’re looking for a hair care business and align with Diesel’s vibe, the business could be a good match for you!
Resources
2) Zaxby’s
Fast Facts
Background
- Founded in 1990, franchising since 1994
- Based in Athens, Georgia; 911 locations open at the start of 2022
- Chicken fingers, Buffalo wings, sandwiches, salads
Fees + Investment
- Royalty: 6%
- Brand Fund: 1.5%
- Franchise Fee: $35,000
- Initial Investment: $501,700 – $950,200
Financial Performance
The Wolf’s Take 🍟
This chicken franchise is doing shockingly impressive numbers. I say “shockingly”, because when you think of the top fried chicken concepts, it’s typically Chick-Fil-A, Popeyes, and KFC.
Yet Zaxby’s is averaging a cool $2.5M in revenue per location, and ~$420K in average EBITDA!
You’ll note that they have 900+ locations open already – and they’re heavily concentrated in the southeastern portion of the US (the franchise started in Georgia).
If you’re an aspiring QSR operator, this is a franchise where if they aren’t in your market yet, you’d want to get an understanding on when they’re willing to build a presence, so you can be a part of the ride!
If you are in Zaxby’s territory, there’s no reason why you couldn’t try to acquire existing locations from operators who are leaving the system. To learn more about that strategy, check out my conversation with Michael Horowitz.
Mike is a 20 unit Wingstop owner who – in his franchise acquisition search – talked to all the big food brands, from Wendy’s to Domino’s.
Zaxby’s is ripe for new builds or the ETA method!
Resources
FROM THE POD
Brianna Keefe – Toastique
This was a super fun convo with the youngest guest to date I’ve had on Franchise Empires!
Brianna graduated college in 2016, and then quit her job to start Toastique in 2018.
Today, she has 5 corporate stores open, 3 franchises open, and 60+ locations being built nationwide.
Check out our conversation here!
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