Capriotti’s Franchise Costs, Fees & Owner Salary (2023)

Initial Franchise Fee ($35,000 to $40,000)

• This fee is payable upon signing the Franchise Agreement and is non-refundable.

Royalty Fee (6% to 7% of monthly Gross Sales)

• The royalty fee is due on the 5th day after the end of each calendar month. If the franchisee's royalty fee is initially 6% but fails to comply with development obligations, the franchisor may increase the royalty fee to 7%.

Marketing Fund (Up to 4% of monthly Gross Sales)

• This contribution is for the Marketing Fund and is payable when the Royalty Fee is paid.

Technology Fee (Currently 2% of monthly Gross Sales)

• While the franchisor does not currently charge this fee, they have the right to begin collecting it on 30 days' prior written notice. This fee covers technology expenditures deemed best for the franchise system, including mobile training, operational performance software, cloud-based franchise-management solutions, IT phone support, database maintenance, digital marketing, online ordering, and loyalty programs.

Capriotti’s Sandwich Shop offers potential franchisees two primary models for investment: the traditional restaurant and the Virtual Kitchen. If you're considering joining the Capriotti’s family, understanding the initial investment is crucial.

• Traditional Capriotti’s Sandwich Shop: The initial investment for a traditional Capriotti’s Sandwich Shop ranges between $417,100 and $748,500. This includes a fee of $65,000 that must be paid directly to the franchisor or its affiliate.
• Virtual Kitchen Model: For those looking at a more modern approach, the Virtual Kitchen model requires an investment ranging from $109,000 to $184,000, inclusive of a $52,000 fee for the franchisor or affiliate.

Both these models come with their own set of advantages and cater to different market needs. However, the core essence of delivering quality sandwiches remains consistent. It's essential to note that these figures are estimates and actual costs can vary based on location, size, and other factors.

Investment for Traditional Restaurant:

‍

Here's a closer look at what they provide to their franchisees:

Training Program: Capriotti’s offers a blended learning training program, which includes internet-based, classroom, and on-site training at an approved training restaurant. This comprehensive program covers a wide range of topics, from sales techniques and product orientation to accounting procedures, food preparation, and operations management.

Who Needs to Attend: At least two individuals must complete the full Capriotti’s training program, including the Franchisee’s Managing Owner. Additionally, two other employees must undergo an hourly-team-member training program.

Location and Duration: The training is provided at Capriotti’s headquarters or other designated locations. It includes uncompensated on-the-job training at an approved training restaurant. The training may be presented in installments, and all designated personnel must attend all sessions.

Ongoing Training: Capriotti’s may require the franchisee's Managing Owner and other managerial personnel to participate in an extensive on-site training program at the restaurant for up to six weeks after its opening.

Training Expenses: While Capriotti’s covers the direct training costs, such as instructors, manuals, and classrooms, the franchisee is responsible for all indirect training costs.

Single-unit franchisees do not receive an exclusive territory. They may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands controlled by the franchisor.

There is no territorial protection provided, and the franchisor and its affiliates retain all rights with respect to CAPRIOTTI’S Restaurants and any other activities they deem appropriate, without regard to the competitive impact on the franchisee's restaurant.

For those entering into a Development Rights Agreement (DRA) with a commitment to develop 3 or more CAPRIOTTI’S Restaurants, the designated Territory will be defined by various factors such as radius, zip code boundaries, county boundaries, and other factors deemed appropriate by the franchisor.

The size of the Territory is primarily based on the number of CAPRIOTTI’S Restaurants the franchisee agrees to develop, demographics, the number of distinct development areas, competitive businesses within the Territory, and site availability.

The franchise emphasizes the role of a "Managing Owner" who is responsible for overseeing the restaurant's operations. This Managing Owner should have the authority to make essential business decisions and communicate directly with Capriotti’s on matters related to the restaurant.

While the Managing Owner can be the primary manager of the restaurant, they also have the option to designate another individual as the manager.

If there's a need to change the designated Managing Owner, a new individual, termed the "Replacement Managing Owner," must be appointed within 30 days of the former Managing Owner's departure.

This Replacement Managing Owner must be approved by Capriotti’s and is required to hold a minimum ownership interest specified by the franchisor. Additionally, they must complete the necessary training as outlined by Capriotti’s.