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

Initial Franchise Fee ($30,000)‍

Upon signing the agreement, the franchisee is required to pay an initial franchise fee of $30,000. This fee is non-refundable and is charged to cover administrative and other expenses incurred by the franchisor in granting the franchise.

Royalty Fee (5.5% of Gross Sales)

‍Franchisees are obligated to pay a continuing royalty fee amounting to 5.5% of the Gross Sales of the Franchised Business. This fee is due monthly, based on the Gross Sales of the previous month.

Marketing Development Fund (2.0% of Gross Sales)

‍Franchisees are required to contribute 2.0% of their Gross Sales to the Marketing Development Fund. This fund is utilized for various marketing and promotional activities to benefit the brand. If a Regional Fund is established, franchisees must join, but the total contribution between the Marketing Development Fund and any Regional Fund will not exceed 2.5% of Gross Sales.

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Nathan's Famous, a renowned name in the fast-food industry, offers a diverse range of franchise formats tailored to fit various market needs and preferences. Each format is uniquely designed to cater to specific customer bases, from bustling malls to standalone establishments.

If you're considering diving into the world of franchising with Nathan's Famous, it's crucial to understand the financial commitment associated with each format. Here's a concise breakdown of the estimated initial investments for their primary franchise options:

1. Traditional Free-Standing Restaurant: A classic choice, the traditional free-standing restaurant is a standalone establishment designed to serve a broad range of customers. With an ambiance that resonates with the Nathan's Famous brand, this format requires an investment ranging from $554,350 to $2,032,610.
2. In-Line Restaurant or Food Court: Tailored for malls or shared commercial spaces, this format is perfect for entrepreneurs looking to tap into the foot traffic of bustling commercial centers. The investment for this option ranges from $359,100 to $1,146,860.
3. Kiosk: Ideal for entrepreneurs with limited space or those looking to set up in high-footfall areas like transit hubs, the kiosk format offers flexibility and efficiency. The investment for this compact setup ranges from $103,850 to $305,000. If you're considering enhancing the kiosk with an optional preparation area, be prepared for additional costs ranging from $21,000 to $90,000.
4. Mobile Unit: Embodying the essence of flexibility, the mobile unit is designed for those who wish to take Nathan's Famous on the go. Whether it's events, fairs, or any transient location, this format requires an investment between $82,200 and $364,100.

It's also worth noting that these figures exclude co-branding costs. For those interested in integrating an "Arthur Treacher's Co-Branded Operation" with their "Nathan's Famous" restaurant, there's an additional estimated cost of $19,500 to $38,000.

Free-Standing Restaurant

Nathan's Famous offers a comprehensive training program for its franchisees. The training program encompasses both classroom and on-the-job training sessions. Specifically, the program covers various subjects, including:

• Food Preparation:  The training ensures that franchisees understand the nuances of preparing dishes that align with the brand's quality standards.
• Equipment Operation: To ensure the food's consistency and quality, it's crucial to understand how to operate the equipment correctly. This segment of the training focuses on that.
• Sanitation: This segment ensures that franchisees understand and adhere to sanitation standards.
• Food Cost: An understanding of food costs is vital for maintaining profitability. This training segment delves into this aspect.
• Labor Scheduling:  This segment equips franchisees with the skills to manage their staff schedules effectively.
• Train the Trainer: This unique segment is designed to empower franchisees to train their staff, ensuring that the brand's standards are consistently met across the board.
• Customer Service: Given that customer satisfaction is a top priority, this segment focuses on delivering exceptional service.

The duration of the classroom training varies based on the menu level for the restaurant and the participant's prior experience. The frequency of these training sessions can range from two to three times per month to bi-monthly, depending on the subject.

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Franchisees of Nathan's Famous do not receive an exclusive territory. This means they might face competition from other franchisees, outlets owned by the company, or other distribution channels or competitive brands controlled by the company.

Franchisees are allowed to operate a "Nathan's Famous" Restaurant only at a specific site designated in the Franchise Agreement. Any relocation of the restaurant site requires prior approval from the company. Additionally, for those operating a Mobile Unit, there are specific territorial restrictions.

The Mobile Unit Territory will exclude any areas within a two-mile radius from any existing or newly-established permanent "Nathan's Famous" restaurants located within the Mobile Unit Territory. If the Mobile Unit operates outside of this designated territory or at an unapproved location, the company has the right to terminate the Franchise Agreement immediately.

The franchise must be actively managed full-time by either the franchisee or an Operating Partner. This Operating Partner should have an ownership interest in the franchisee entity.

While the franchise agreement doesn't mandate personal participation by the franchisee in the direct operation of the restaurant, it does emphasize the importance of either the franchisee or the Operating Partner dedicating their full time, energy, and best efforts to the management of the restaurant.

If the franchisee is a corporation or partnership, an approved Operating Partner must supervise the restaurant's operation.