Is
McAlister’s Deli
a franchise?
How many
McAlister’s Deli
franchises
are there?
What are the
McAlister’s Deli
franchise
fees?
Initial Franchise Fee ($35,000)
The fee for the right to open and operate a single McAlister’s Deli restaurant.
Royalty Fee (5% of Net Sales)
Franchisees are required to pay a royalty fee of 5% of their Net Sales. This fee is payable weekly and is for the continued use of the McAlister’s Deli System and Marks.
Advertising (3% of Net Sales)
- Advertising Contribution (2% of Net Sales for new or renewing Restaurants): For Restaurants that are transferred, the percentage of Net Sales paid by the transferor at the time of the transfer is either 1.75% or 2% of Net Sales. However, this is expected to increase to 2% of Net Sales by the end of 2023. This contribution goes to the Ad Fund.
- Local Marketing Obligation (1% of Net Sales): Franchisees are required to spend not less than 1% of Net Sales on local market advertising each calendar quarter. If franchisees fail to make the minimum advertising expenditures, McAlister’s Deli may do so on their behalf, and the franchisees must reimburse them for their expenses.
Grand Opening Advertising ($25,000)
Franchisees must spend at least $25,000 on grand opening advertising promoting the opening of the Restaurant. This expenditure covers the period beginning four weeks before the restaurant's opening and ending eight weeks after the opening. All advertising and promotional content used for this obligation is subject to approval.
Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.
How much does
it cost
to start a
McAlister’s Deli
franchise?
McAlister’s Deli offers franchise opportunities for individuals or entities interested in operating a fast-casual restaurant. There are three primary types of McAlister’s Deli franchise opportunities:
- Traditional Restaurant (Endcap or Inline Shopping Center Location): The total investment required for this type ranges from $921,450 to $1,565,900.
- Traditional Restaurant (Newly-Constructed Freestanding Location): The investment for this format ranges from $1,328,050 to $2,329,400.
- Express Restaurant: For those interested in the Express format, the total investment ranges from $436,850 to $898,050.
The table below provides a detailed breakdown of the estimated initial investment for a Traditional Restaurant (at an endcap or inline shopping center location):
Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.
Does
McAlister’s Deli
provide
training
to its
franchisees?
McAlister’s Deli offers a robust training program for its franchisees. This training is essential for those who wish to operate a McAlister’s Deli franchise, ensuring they have the necessary knowledge and skills.
This program is tailored to introduce franchisees to the specific operational techniques of McAlister’s Deli. It covers a wide range of topics, from maintaining the brand's operational standards to understanding the nuances of the menu.
Beyond the initial training, the company offers ongoing operational training programs. These are designed to reinforce and update the brand's operational standards, ensuring consistency across all locations.
Does
McAlister’s Deli
provides
territory
protection?
Franchisees are granted the right to operate a McAlister’s Deli Restaurant within a specific "Designated Area" as specified in the Franchise Agreement. This Designated Area is solely for site selection purposes.
If franchisees default under the Franchise Agreement and fail to cure the default in the applicable cure period, McAlister’s Deli has the right to reduce or eliminate the franchisee's Area of Protection.
The Area of Protection may not be altered before the expiration or termination of the Franchise Agreement. Franchisees' territorial protection is not dependent on achieving a certain sales volume, market penetration, or other factors, other than compliance with the Franchise Agreement.
Can a
McAlister’s Deli
franchise
be run as
a passive
investment?
The franchisee is expected to give their best efforts to ensure the proper and effective operation of the restaurant. While the franchisee and their owners aren't mandated to be directly involved in the restaurant's daily operations, they can, with the company's consent, serve as the "Primary Contact" and/or a "Manager."
However, it's worth noting that McAlister’s Deli doesn't recommend their franchise for those looking for an absentee management business.
A "Primary Contact" must be appointed by the franchisee, responsible for the restaurant and its operations. This individual should either hold a direct or indirect interest of 5% or more in the franchisee's entity or have a written agreement that provides for such authority.
The Primary Contact can also serve as a Manager for the restaurant, given that it's their full-time job and they've successfully completed the Management Training Program.
