Perkins Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$1,184,000

-

$3,290,000

LOCATIONS

270

Emily

Updated

April 11, 2024

Is

Perkins

a franchise?

Yes,
Perkins
currently
accepts
franchise
applications

Perkins is a leading American casual dining concept headquartered in Sandy Springs, Georgia. The chain was founded in 1958 by Matt and Ivan Perkins, as a single pancake house in Cincinnati, Ohio.

The chain welcomes its guests to a varied menu that encompasses a delightful selection of pancake and waffle creations, cherished American classics served throughout the day, steak offerings, burgers, a diverse selection of handcrafted handhelds, soups, salads, a tantalizing assortment of pies, and delectable muffins.

Perkins began franchising in 1965, and today it enjoys a widespread presence of both corporate and franchised locations totalling over 270 restaurants, spread across 32 states in the United States and two provinces in Canada.

How many

Perkins

franchises

are there?

In 2022, there were
270
outlets in
the United
States, of which
189
are franchises, and
81
are corporate-owned.

What are the

Perkins

franchise

fees?

Advertising fee

4.00%

Initial Franchise Fee ($40,000)

This fee is in consideration of administrative and other expenses incurred by the Company in entering into the Agreement, for the lost or deferred opportunity of the Company to enter into the Agreement with others, and for the franchisee's immediate access to the Company’s confidential trade secrets, Licensed Marks, and the Perkins System.

Royalty (4.0% of Net Sales)

In return for the rights and licenses granted under the Agreement and the continuing services of the Company, franchisees are required to pay a weekly royalty fee equal to 4.0% of their Net Sales.

Advertising (4% of Net Sales)

Franchisees must spend on a quarterly basis at least 1% of the Net Sales on local advertising and promotional activities, known as the "Local Advertising Requirement." The Company has the right to require that, in lieu of the franchisee directly spending monies on local advertising to satisfy the Local Advertising Requirement, the franchisee will instead contribute such amounts to the Fund for use under specified terms.

If the franchisee does not fully comply with the advertising requirement, the Company may require that the franchisee contribute the Local Advertising Requirement monies to the Fund or to a designated account.

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

Perkins

franchise?

It costs between
$1,184,000
and
$3,290,000
to start a
Perkins
franchise.

When considering an investment in a Perkins franchise, potential franchisees have two primary options: Traditional Units and Non-Traditional Units. Each comes with its own set of initial investment costs, which are crucial to understand before making a decision.

For a Traditional Perkins Restaurant Unit, the estimated initial investment ranges from approximately $1,534,715 to $3,290,465. This investment covers a variety of costs, from the initial franchise fee to real estate, improvements, and additional funds required for the first three months of operation.

On the other hand, the Non-Traditional Unit offers a different investment structure. The estimated initial investment for this option ranges from $1,183,715 to $2,836,465. While there are similarities in the types of costs involved, the amounts and specifics can vary, especially considering the non-traditional nature of the establishment.

The table below provide a detailed breakdown of the costs for a Traditional Perkins Restaurant, offering potential investors a clear picture of the financial commitment required for each franchise option:

Type of Expenditures Amount
Initial Franchise Fee $40,000
Training Fee and Travel and Living Expenses While Training $97,000 - $119,000
Real Estate – Rent for First 3 months $20,000 - $60,000
Improvements $575,000 - $1,967,000
Interest during construction $25,000 - $30,000
Equipment and Seating $490,000 - $650,000
Signs and Décor $53,000 - $82,000
Site Plan/Engineering Drawings $12,500 - $18,500
Travel Expenses for Opening Guide Meeting $0 - $750
Smallwares, Small equipment, Opening Inventory and Uniforms $53,000 - $82,000
POS System $15,000 - $20,000
Help Desk (total for first 3 months) $215 - $215
Hardware and Software Components $2,500 - $3,000
Other Computer and Technology Expenses (first 3 months) $2,500 - $3,000
Grand Opening Promotion $4,000 - $10,000
Miscellaneous Opening Costs $45,000 - $55,000
Additional Funds-3 Months $100,000 - $150,000
Total $1,534,715 - $3,290,465

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

Perkins

provide

training

to its

franchisees?

Yes,
Perkins
provides
training

The Perkins training program is designed to cover a broad spectrum of restaurant operations. This includes:

  • On-the-Job Training: Before starting their business, franchisees undergo a comprehensive training program. This program, which spans up to 35 days, is tailored to provide hands-on experience in various aspects of the restaurant business.
  • Operational Assistance: Perkins provides guidance on site evaluation and selection, equipment layouts, accounting methods, merchandising, advertising techniques, and more.
  • Computer Systems:Perkins ensures that franchisees are well-versed in their computer systems. They offer maintenance services, help desk assistance, and even proprietary software programs tailored for the Perkins System.
  • Marketing and Advertising: Perkins has dedicated resources for media advertising, market surveys, website maintenance, and other digital marketing strategies. This ensures that the brand remains top-of-mind for its target audience.
  • Continuous Support: Whether it's through additional training programs, seminars, or refresher courses, Perkins ensures that their franchisees are always updated with the latest in the restaurant industry.

Does

Perkins

provides

territory

protection?

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

Franchisees are allowed to operate a "Perkins" Restaurant only at a specific site designated in the Franchise Agreement. The designated territory, referred to as the "Territory," is specified in Exhibit B of the agreement. While the agreement is in effect, the company commits not to establish or operate, or franchise others to establish or operate, a Perkins Unit within this designated "Territory."

However, there are certain rights retained by the company and exclusions from this territorial protection, allowing the company to conduct various business activities outside of these territorial confines.

Can a

Perkins

franchise

be run as

a passive

investment?

For those considering a franchise with Perkins, there are specific operational guidelines to be aware of. The franchise must be operated either by the franchisee or by a designated manager.

While Perkins recommends that franchisees personally oversee the operation of their franchise, there are provisions for those who might not be directly involved in day-to-day operations.

Specifically, during the first two months after the franchised business opens to the public, either the franchisee or one of the owners with at least a 10% equity in the franchisee entity must serve as an on-site designated manager for a minimum of 30 peak operating hours per week. This designated manager must be certified by Perkins as meeting its qualifications.

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