🍟 9/20/21 – Rise Southern Biscuits And Mighty Dog Roofing
Today’s edition highlights Rise Southern Biscuits and Mighty Dog Roofing (the first service franchise to be covered in the newsletter)
Rise Southern Biscuits was started in 2012 by a CIA trained chef, and has been named to QSR’s 40/40 List for 2021: America’s Hottest Startup Fast Casuals. They serve breakfast and lunch, offering up tasty breakfast sandwiches on biscuits, donut options, and are known for their chicken as well. It’s also a waitstaff free restaurant as they use an efficient service line to serve customers. This innovative fast casual restaurant also shuts down by 3pm each day, which could be attractive for solo or multi-unit operators.
Mighty Dog Roofing offers commercial and residential roof repairs, as well as gutter cleaning, storm damage, and skylight installation/repair. They started franchising halfway through 2020, and sold 100 territories within the first 6 months. After I looked into them further, they have a fantastic executive team that includes a founder of a 225+ territory franchise, and multiple multi-unit franchisees of other brands. The model involves offering strong lead gen for franchisees while primarily subcontracting out the labor. Given the executive team experience and quick unit growth thus far, they’re a great fit to be the first service brand I’ve analyzed.
Rise Southern Biscuits
- Founded in 2012 in Durham, NC; franchising since 2014
- 17 locations open nationwide; 14 franchised
- Serves breakfast, lunch, and brunch in a QSR fashion
Fees + Investment
- Royalty: 6% of gross sales
- Brand Fund: 2% right now, but can be up to 1.5% of gross sales
- Franchise Fee: $35,000
- Initial Investment: $355,600 – $524,000
- The following table illustrates gross revenue and expense information for 3 affiliate owned restaurants in 2019
- The following table illustrates gross revenue information for franchisee owned restaurants during the 2019 calendar year
The Wolf’s Take 🍟
Location #1 of the affiliate location is what caught my attention for this brand, and then franchisee revenues from the second table also showed promise, specifically location 1, 5, 6, & 7. To me the brand is unique given it’s serving up traditional southern food and donuts, but does so in a fast-casual way. Earning $180k-$200k in EBITDA off of what is on the high end a $524k investment is a great return for business owners.
- Rise Southern Biscuits Unlocks Sales With Tech & Innovation
- Rise Southern Biscuits Tackles Labor Shortage With In-Store Kiosks
Mighty Dog Roofing
- Founded in 2018, franchising since November 2020
- 100+ territories sold
Fees + Investment
- Royalty: 6.5% of gross sales
- Brand Fund: 2% of gross sales
- Franchise Fee: $59,500
- Initial Investment: $200,335 – $303,035
Franchise Fee Per Territory
- The below table contains data from two affiliate outlets for the full year 2019
- Outlet A operates in an area containing 4 territories, while Outlet B operates in an area containing 3 territories
The Wolf’s Take 🍟
The above numbers don’t take into account expenses such as royalties, the national marketing fund, call center fee, etc. But regardless, they offer strong return potential based on the initial investment. Something to keep in mind as well is the number of territories required to reach certain revenue thresholds. As I listed above, the initial franchise fee of $59,500 is for one “territory”, but yet Outlet A operates in a 4 territory market, which would add up to $159,500 in franchise fees. Not necessarily a dealbreaker if you believe in Mighty Dog’s subcontracting heavy model, but must be factored in!
- Mighty Dog Offers 100 Franchise Territories in First 6 Months
- Horse Power Brands Acquires Mighty Dog Roofing, Revs Up Opportunity
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