For all potential investors in the fast food industry, we have made a breakdown of the Slim Chickens franchise investment cost. Also, according to actual data, we will estimate the salary/profit that franchisees of this brand can expect to make per year.
- More than 130 Slim Chickens franchised restaurants are currently operating in the U.S.
- Starting a new Slim Chickens franchise has an initial investment cost that ranges between $1,307,000 and $4,052,000 per single restaurant.
- This food franchising system charges its franchisees in total 8% of the gross revenue for the expenditure associated with franchisor royalties.
- Slim Chickens franchises make, on average, $2,366,491 in gross sales per year with 7% of the profit margin.
- The Slim Chicken franchise owner, who is operating an average earning location, can expect to make $168,000 of profit in salary per year.
How Much Does The Slim Chicken’s Franchise Cost
The launch of the new Slim Chickens franchise requires an initial investment between $1,307,000 to $4,052,000, including the $30,000 Initial Fee and all other expenses before opening day.
The highest pre-operating cost that investors will need to bear is one related to the real estate in which the business will operate. The traditional franchise from this brand operates in a huge space, so it will be necessary to purchase or lease the appropriate building.
If an investor decides to start from scratch and buy rather than lease a restaurant building, it will be necessary to purchase land between 0.80 and 1.5 acres, which will cost between $500,000 and $1,200,000.
However, investors who don’t have extensive startup capital and cannot afford to buy land to build a restaurant site can always opt for leasing restaurant premises. In that case, leasehold improvement will cost approximately $400,000 without expenses associated with buying land!
Table of initial costs:
- Initial Fee: $30,000
- Real Property / Site Lease / Site Review Fees: $0 to $15,000
- Construction/Site Work/Building Conversion: $600,000 to $1,800,000
- Furniture, Fixtures, and Equipment: $275,000 to $325,000
- Smallwares: $13,000 to $16,000
- Building Signage and Interior Graphics: $45,000 to $75,000
- Soft Costs: $137,000 to $278,000
- Insurance: $9,000 to $15,000
- Opening Inventory: $6,000 to $10,000
- Initial Training and Opening Assistance Costs: $23,000 to $39,000
- POS System/Drive-Thru Components/Menu Boards: $80,000 to $130,000
- Low voltage/Security/Network Installation: $35,000 to $45,000
- Security and Utility Deposits: $2,500 to $12,000
- Business Licenses: $400 to $2,000
- Grand Opening Ad Expenditure: $10,000
- Additional Funds: $40,000 to $65,000 – working capital for first three months
- ESTIMATED TOTAL INVESTMENT COST: $1,307,000 to $4,052,000
If you lease the real estate for your restaurant, the initial investment cost will be on the lower end of the necessary capital estimation. Purchasing the restaurant’s real estate will have a much higher initial cost and can go all the way to $4M+.
Options To Fund Slim Chicken’s Franchise Investment
This franchisor doesn’t offer direct financing options nor provide franchisees loan assistance to cover the initial investment. So potential franchise owners will need to search for third-party funding options to close financing.
Launching this type of franchise demands enormous investments, so investors must have a high net worth if they want to be approved by lenders!
This franchise will not be available to many investors because it demands a high budget. There are a lot of other franchising concepts that are much cheaper. We suggest that you check out the Crumbl franchise opportunity, which is a more affordable option!
Slim Chicken’s Franchise Fees
The investor who decides to launch the Slim Chickens franchise will need to pay a $30,000 Initial Fee and a $10,000 cost associated with Grand Opening Advertising Fee.
The Initial Fee cost franchisee will need to pay immediately after signing the franchise agreement! The grand opening expense will occur one month before opening and in the first six months when the operation of the franchised restaurant starts!
All Slim Chickens franchisees must pay 8% of the gross revenue for the cost associated with franchisor royalties. Potential investors must be aware that this cost will be presented every month during the whole duration of the agreement with the franchisor.
We will now break down these franchisor royalties and touch on the topic of rent fees, which represent one of the highest operating costs these franchises have monthly.
Slim Chickens Royalty Fee is 5% of all Gross Sales that the restaurant makes per month/year. For paying it, the franchisee gets franchisor assistance regarding all business aspects during the whole duration of the franchise agreement.
Ad Royalty Fees
The franchises must contribute 3% of gross revenue every month for the marketing campaigns that this franchisor launch on the national and local level.
The ad/marketing fees are:
- Advertising Fund Contribution Fee, which is 2% of Gross Sales
- Local Advertising Cooperative Contribution Fee, which is 1% of Gross Sales
Same as the royalty fee, the franchisees are obligated to pay this marketing outlay on a regular base every month during the whole duration of the franchise agreement!
The new Slim Chickens franchise owner can expect to pay between $15,000 to $17,000 per month to the landlord for costs associated with renting the restaurant building.
As we mentioned before, these franchises are huge in space, and they usually operate in free-standing buildings on land between 0.80 and 1.5 acres. These types of facilities are costly, so investors must be aware that a big chunk of their profit will go to paying rent to the landlord.
The cost of leasing or purchasing real estate for operating this franchised restaurant varies, depending primarily on geolocation. Hence, every investor needs to research how much leasing costs are in the State where their business will be run, and according to that, they will be to be able to calculate precise rent prices!
How Much Is Slim Chicken’s Franchise Profit
To determine Slim Chickens’ profit potential, we will reveal financial data that we have found about the average gross revenue and the estimated profit margin that owners can expect to make!
Average Gross Revenue Per Year
On average Slim Chickens franchises make $2,366,491 in gross sales per year; the median gross sales these restaurants deliver is $1,787,386 per restaurant per location.
It is good to know that in 2021, the highest-earning franchised restaurant location made $5,764,715, and the lowest-earning restaurant made $1,145,623 in gross sales for that year.
From this data, we can conclude that these franchises are one of the highest earning in the food industry if we look only at the numbers that are related to gross sales level!
Slim Chicken’s Franchise Profit Margin
Slims Chickens franchise owners can expect their franchised restaurant to deliver 7% of the profit margin from all gross sales generated from selling food and beverage products.
These restaurants sell chicken tenders, chicken wings, salads, sandwiches, wraps, and a wide variety of hot and cold beverages. All these products deliver a good margin, but that doesn’t mean that owner can expect to make a huge profit on them!
The franchisor’s royalties will take 8% of the gross sales level, which will be reflected in the franchise owner’s profit. Our estimation of about 7% of profit margin is pretty accurate if we consider that monthly operating costs are really high.
Potential franchisees must be aware that this restaurant operates in huge real estate, plus there are payroll and food supply-related expenses which all add operating costs of this franchised business.
How Much is Slim Chicken’s Franchise Owner Salary
The Slim Chickens franchise owner who is operating a location that makes average gross sales(approximately $2.4M) that this franchising system has can expect to make $168,000 of salary per year.
However, that doesn’t mean that investors who launch this restaurant business can expect to make this amount of salary immediately after opening!
Usually, it is necessary to pass 2+ years to establish and promote a business in a particular area to make a high sales level!
In the first year after opening, it is expected that the Slim Chickens franchise owner will make approximately $50,000 salary, since these restaurants, on average, make roughly $700,000 in the first year of business.
How We Estimate Slim Chicken’s Franchise Owner Salary Per Year
All data about average gross sales of these restaurants we have collected from this franchisor Franchise Disclosure Document ITEM 19. To the sales level, we have applied profit margin to show investors how much profit potential this franchising system has.
Let’s see what financial data the Slim Chickens disclosure document(2022) has revealed to us!
Gross sales volume for restaurants that are opened for 2+ years:
- The data is collected on 66 franchise locations that were open for the entire 2021 fiscal year.
- The average Gross Sales for all 66 Restaurants was $2,366,491.
- Median Gross Sales for all 66 Restaurants was $1,787,386.
- The Highest Gross Sales restaurant has made $5,764,715
- The lowest Gross Sales restaurant has earned $1,145,623
Gross sales volume for new restaurants(first year of business):
- The data is collected in 8 new restaurants that operated for at least six months in the fiscal year 2021
- These 8 Restaurants averaged $65,007 per week ($390,042 for six months) in Gross Sales per Restaurant
- The median that this restaurant was $67,593 per week in Gross Sales
According to Upserve, fast food franchises deliver margins that are between 6% to 9%! So we applied an average 7% profit margin to gross sales data, and according to this calculation, we get an estimation of the Slim Chickens franchise owner’s salary/profit per year.
Is it Profitable to Own Slim Chicken’s Franchise?
Yes, it is profitable to own the Slim Chicken franchise. However, these restaurants have a substantial initial cost which means that it will pass a few years until investors return their investment and start to make a profit.
The expected ROI (Return Of Investment) time is ten years for this investment, and investors must be aware of this. However, the ROI time is pretty similar if we compare it with other high-cost franchises, so this can’t be considered a disadvantage of this system.
The owner can expect to make sufficient gross sales per month, from which it will cover the operating cost and associated loan expenses and make a good salary per month.
Requirements to Own Slim Chicken’s Franchise
The franchise applicants need to have a net worth of min $3,000,000 if they want the franchisor to approve them as a new restaurant developers.
Owner participation in business requirement
The franchise owner must be actively and personally involved in the business regularly. However, that doesn’t mean that franchisee will need to be all the time on work; the restaurant can be under the on-premises supervision of an employee who is acting as a full-time Supervisor.
Spousal Liability Requirement
The investors and its spouse must sign a document that makes them liable for all financial obligations under the franchise agreement, even if the spouse doesn’t have any ownership interest in the franchise.
You, as an investor, must be aware that this requirement will put your and your spouse’s marital and personal assets at risk if the franchise fails. So it is necessary to determine if this business is worth all the risk involved.
Inventory and supplies requirements
This franchisor has Sysco as its primary approved distributor for supplies and other products; In practice, it means that you as a franchisee will be obligated to purchase necessary work material from this company or from other companies that the franchisor has approved in advance.
Also, this franchisor deals with certain brands in the beverage industry, and all Slim Chickens franchises must offer and sell soft drink products manufactured by Coca-Cola and Dr. Pepper Snapple Group.
Slim Chicken’s Franchisee Training
The Slim Chickens’ initial franchisee training program consisted of the so-called “Franchisee Ownership Training” and “Unit Operation Training last approximately 280 hours and is conducted in-store and classroom.
Franchisee Ownership Training Program:
- CLASSROOM= 12 hours
- IN-STORE / FIELD = 20 hours
Unit Operation Training Program:
- CLASSROOM = 15 hours
- IN-STORE / FIELD = 231 hours
There is no fee associated with the initial training of the owner, supervisor, or manager, which means it is free of charge for investors!
However, new franchisees will need to finance all travel and living expenses of participants; the initial training usually lasts up to 6 weeks, and it takes part in the franchisor headquarters in Fayetteville, Arkansas.
We must mention that this franchisor also provides an opening training team that visits new Restaurants for a minimum of 14 business days during the pre-and post-opening period.
The opening training team consists of experienced business people who help new owners with all tasks that starting a restaurant business demands.
How Much Is Slim Chicken’s Franchise Agreement Duration
The Slim Chicken franchise has an initial term of 10 years; after that time passes franchisee is obligated to pay a renewal fee to continue using this brand trademark in the restaurant.
Renewal Fee that this franchisor charge is currently 25% off the cost of the Initial Fee; $7,500
How to Terminate Franchise Agreement
If the restaurant has negative EBITDA, it is possible to terminate the franchise agreement without any penalties. In other cisrcustames, the franchisee must pay specific compensation to terminate this contract.
Are All Slim Chicken’s Franchises
Approximately 95% of all Slim Chickens restaurants are franchises, and 5% of their locations are company owned. There are 134 of these restaurants in the U.S, and only 9 of them are company owned and operated!
Who Owns Slim Chicken’s
Thomas Gordon and Gregory Smart, entrepreneurs from Arkansas, are founders and owners of Slim Chickens. They operate a business under Slim Chickens Global, LLC, and currently, Gordon is Chief Executive Officer (CEO), and Smart is Chief Concept Officer of this company!
We have summarized all the essential facts about Slim Chickens’ initial starting cost and profit potential that a franchisee can expect once a business opens its door.
Is this a good business opportunity? It depends on every investor individually; we only suggest that every potential franchisee must do their due diligence properly. The best practice is to contact existing franchisees and ask them a few questions!