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

INVESTMENT

$1,392,000

-

$3,266,000

OPERATING PROFIT

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Emily

Updated

February 24, 2024

Is

Zaxby’s

a franchise?

Yes,
Zaxby’s
is a franchise and
currently
accepts
franchise
applications

Zaxby’s is a premier American fast-casual chain with a formidable presence, currently boasting over 912 thriving establishments spread across the United States and a trajectory that signifies continued growth.

The remarkable journey of Zaxby’s began in the city of Statesboro, Georgia, in 1990, where it was established by entrpreneurs Zach McLeroy and Tony Townley.

Positioning itself within the realm of fast-casual dining, Zaxby’s tantalizes taste buds with a menu featuring made-to-order delights such as succulent chicken fingers, savory chicken wings, mouthwatering sandwiches, wholesome salads, and delectable appetizers.

Elevating the experience are Zaxby’s signature dipping sauces, which include enticing flavors like teriyaki, BBQ, and hot honey mustard.

Its remarkable franchising journey began in 1994 with the awarding of its first franchise location in Bowling Green, Kentucky.

Operating under the banner of Zaxby's SPE Franchisor LLC and headquartered in Athens, Georgia, Zaxby’s continues to position itself as a successful fast-casual dining franchise.

How many

Zaxby’s

franchises

are there?

In 2022, there were
912
outlets in the United States, of which
768
are franchises, and
144
are corporate-owned.

What are the

Zaxby’s

franchise

fees?

Initial franchise fee

$35,000

Royalty fee

6.0%

Advertising fee

4.0%

Initial Franchise Fee ($35,000)

The initial franchise fee for a standard Franchise Agreement with Zaxby's is $35,000. This fee is payable upon the execution of the Franchise Agreement.

Royalty Fee (6% of Gross Sales)

Franchisees are required to pay a continuing royalty fee of 6% of the Gross Sales of the Restaurant for each specified period.

Marketing Fund Contributions (Up to 3.5% of Gross Sales)

Franchisees are required to contribute up to 3.5% of Gross Sales to the National Marketing Contribution. This contribution rate may be modified and reallocated among the National Marketing Contribution and the Co-op Marketing Contribution or the Multi-DMA Advertising Contribution.

Co-op Marketing Contribution or Multi-DMA Advertising Contribution (Up to 3% of Gross Sales per week)

If a local marketing cooperative (Co-op) is established in the franchisee's designated market area (DMA), franchisees must contribute this fee to such Co-op as the Co-op Marketing Contribution. If no Co-op is established, franchisees must contribute this fee to ZMAA or a designated affiliate as the Multi-DMA Advertising Contribution. The fee charged may be modified from time to time.

Initial Marketing Contribution (Up to $10,000)

Franchisees must remit an Initial Marketing Contribution of up to $10,000 no later than five days prior to the opening of the Restaurant. This contribution will be expended on behalf of the franchisee pursuant to the initial marketing plan.

How much does

it cost

to start a

Zaxby’s

franchise?

It costs between
$1,392,000
and
$3,266,000
to start a
Zaxby’s
franchise.

The total estimated initial investment to start a Zaxby's franchise ranges between $1,391,700 to $3,266,200.

Type of Expenditure Amount
Initial Franchise Fee $35,000
Lease Deposit and Payment $10,000 to $19,000
Utility Deposits $0 to $9,000
Building & Sitework $772,000 to $2,200,000
Architect & Engineer $45,000 to $75,000
Permits and Licenses $2,000 to $24,000
Accounting and Legal Fees $500 to $25,000
Furniture, Fixtures & Equipment Package $410,000 to $440,000
Technology System $60,200 to $92,200
Signage $23,000 to $134,000
Insurance $1,000 to $17,000
Printing/Business Supplies $300 to $1,000
Initial Marketing Contribution $5,200 to $10,000
Initial Inventory $5,000 to $22,000
Uniforms $1,500 to $5,000
Training Expenses $10,000 to $25,000
Pre-Opening Payroll $10,000 to $37,000
Additional Funds - 3 months $1,000 to $96,000
TOTAL $1,391,700 to $3,266,200

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

Zaxby’s

provide

training

to its

franchisees?

Yes,
Zaxby’s
provides training to its franchisees.

Before the opening of a restaurant, the designated principal, key operator, and certain managers must attend and successfully complete an initial management training program known as the Training Program.

This program comprises three segments: Operations Basics, Operations Leadership, and Operations Excellence Capstone.

The duration of the training can range from six to nine weeks, depending on job role and experience, and should conclude no later than 21 days before the opening of the restaurant. The training is offered on an as-needed basis.

There's no tuition charged for four individuals to attend the Training Program, however, a fee of $2,500 per person is required for each additional manager attending. All travel and living expenses for representatives attending the training are to be borne by the franchisee.

Does

Zaxby’s

provides

territory

protection?

Franchisees are granted the right to operate a Zaxby's Restaurant within a specific location referred to as the "Protected Area." The Single Unit Development Agreement is signed for each location and grants franchisees the right to construct a single Zaxby's restaurant within the Development Area. This Development Area could be a specific site or a larger area agreed upon and described in the Agreement.

The Company will not grant new Zaxby's franchises to any person or entity other than the franchisee for the operation of, and the Company will not open, any new Zaxby's restaurant within the Development Area. However, if the Company or any other franchisee already operates one or more Zaxby's restaurants within the Development Area, there are no guarantees of exclusivity.

Can a

Zaxby’s

franchise

be run as

a passive

investment?

Zaxby’s recommends but does not require the franchisee's Designated Principal to be actively engaged in the operation of the Restaurant.

However, the Designated Principal or Key Operator must have authority over all business decisions related to the restaurant. The Key Operator must have full control over the day-to-day activities, including operations.

Each restaurant must maintain a certain number of Certified Managers, who are not required to have an ownership interest in the franchisee entity.

Initially, a restaurant must have at least four Certified Managers, but this requirement can be reduced to three Certified Managers if the restaurant has been open for business for more than one year and is in good standing with Zaxby’s.

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