If you like desserts, especially cheesecakes, you probably heard of or have been to Cheesecake Factory.
They are serving in various locations across different countries with great popularity with extended lines in front of their stores.
It is obvious that Cheesecake Factory is a great business with a great return on investment.
Since they are a lucrative business, you might have thought of owning a Cheesecake Factory franchise branch.
Even though this is a good idea, it is a little bit tricky to be a franchise to Cheesecake Factory. This is because they do not franchise.
They only do licensing, and that is to certain companies and not individuals.
This article will cover all about Cheesecake Factory, the business itself, franchise opportunities, and associated costs.
About Cheesecake Factory Business History
Cheesecake Factory Incorporated is a restaurant based in the United States with headquarters in California. They distribute cheesecakes across the United States and abroad.
They are famous for their original cheesecake recipe. However, they also offer various foods like steaks, burgers, seafood, chicken, and other various cuisines.
Cheesecake Factory currently operates over 340 stores under different brands in various countries, including the United States and Canada.
They currently have about 310 restaurants in the US and Canada and 30 stores abroad through licensing agreements.
The brands include The Cheesecake Factory, North Italia, Fox Restaurant Concepts Business, and Grand Lux Café.
Their aim is to create great satisfaction for guests and also treat their employees well.
Cheesecake Factory was chosen to the “100 Best Companies to Work For” list by Forbes for the tenth consecutive year.
They also focus on providing the same food and service quality in all their locations.
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Cheesecake Factory History
The original starting story of Cheesecake Factory goes back to the 1940s when Evelyn Overton found her original cheesecake recipe.
She opened a small bakery but gave it up after a while, wanting to focus on her family.
Then in 1972, she moved to Los Angeles to give them a last try on their business, selling their cheesecakes.
That’s when they found the Cheesecake Factory brand and started selling their cakes to different restaurants.
The first restaurant opened in 1978 in Beverly Hills by their son David to showcase his mother’s cheesecakes.
The restaurant opened with an extensive dessert menu, and it became a huge hit, having lines in front of the store from day one, and that line is still there to this day.
They quickly grew, opening a second restaurant in 1983 and reaching the 100th store milestone in 2005.
Cheesecake Factory now operates in different countries outside of the United States, with 30 stores operating abroad.
Currently, they have 348 stores in total under different brands that they acquired or founded until today since they were founded.
Their mission is to keep providing superior guest satisfaction at every location and keep the food’s quality.
Cheesecake Factory Franchise Model
| Franchise | NO |
| Franchise-Fee | NO (Doesn’t Franchise) |
| Estimated Outlets | 348 |
Interested In CheeseCake Factory Franchise?
How Much Does It Cost To Open A Cheesecake Factory Franchise?
Cheesecake Factory doesn’t franchise in the United States and Canada. All of their stores are company owned and operated by them.
However, they do offer licensing opportunities in certain countries. They only give this licensing right to certain organizations and not to individuals.
Therefore, there are no costs associated with opening a Cheesecake Factory franchise, whether domestic or international.
Why Doesn’t Cheesecake Factory Offer Franchising?
All of the locations of Cheesecake Factory are company owned and operated by them in the United States and Canada.
The main reason for this decision is that the company wants to maintain the quality and consistency of its food and service.
They believe that by owning and operating all of their locations in the domestic market, they can easily uphold the same high standards everywhere.
This mainly comes from the fact that Cheesecake Factory’s mission is to guarantee high guest satisfaction.
Even though franchising is a tool for rapid expansion, the lack of control over the quality of the food and service might damage the brand.
Though they don’t offer franchising in the domestic market, they do give their brand name’s right to other companies through licensing in the international market.
The Cheesecake Factory branded restaurants operate in some Middle Eastern countries, Mexico, the Chinese Mainland, and Hong Kong.
These licensing agreements are only given to certain brands and corporations and not to individuals.
This means that even though licensing, individuals still can’t operate a Cheesecake Factory franchise abroad.
Only certain companies and brands have the right to use the licensing, and they are still maintained by them.
Cheesecake Factory Average Revenue & Profit
| Year | Revenue (in billions) | Profit (in millions) |
|---|---|---|
| 2021 | $2.93 | $82.3 |
| 2022 | $3.3 | $38.9 |
Cheesecake Factory’s reports show that they are increasing their revenue year over year but not their profit. Their latest reports show us a revenue of $3.3B for 2022.
The company’s revenue in 2021 was $2.93B showing a positive year-over-year increase of about 12%.
Considering that they lost 20% in revenues in 2020 with $1.98B, this is a considerable increase.
Despite the growth in revenue, their profits went down by quite a margin in 2022. The company had $38.9M in profit in 2022, a 50% decrease from the $82.3M profit in 2021.
The difference in the revenue and the profit shows that even though the company is increasing its client base, they are not able to keep up with the profit margin.
The company also shows a strong financial situation with its liquidity and cash balance.
Cheesecake Factory has a liquidity of $354 million. $115 million of it is in cash. Even though their profit is decreasing, they still have a certain amount of cash on the side.
What Are Some Alternatives to Cheesecake Factory Franchise?
You might not be able to franchise a Cheesecake Factory franchise, but there are similar alternatives. You can choose one of these alternatives to the franchise.
TGI Fridays
TGI Fridays is a popular American restaurant chain focusing on American cuisine and casual dining.
They offer a diverse menu of appetizers, salads, entrees, sandwiches, desserts, and their popular signature drinks and cocktails.
They are a popular spot for socializing and happy hours with stores all around the globe.
You have the option to franchise TGI Fridays. The initial investment you need is between $2.5 million and $3.8 million.
This investment includes the initial franchise fee of $50,000. Similar to other franchises, they charge a royalty fee, which is 4% of gross sales.
Once you become a TGI Fridays franchisee, you also get training and ongoing support for daily operations.
TGI Fridays were founded in 1965 in New York City to provide a fun and casual atmosphere for people to unwind and socialize.
This concept quickly became popular, and they grew to over 1,000 stores in almost six decades of business.
Today, they continue to offer a lively atmosphere and diverse menu, catering to a wide range of tastes and preferences.
Outback Steakhouse
Outback Steakhouse is a casual dining restaurant chain known for its Australian-themed décor and menu.
The chain, that’s based in Tampa, Florida, offers a variety of dishes, including signature steaks, chicken, ribs, seafood, and pasta.
In addition to their main dishes, they also have a variety of appetizers, salads, and desserts.
Outback Steakhouse prides itself on its relaxed, casual atmosphere and friendly service. They have more than 1,300 locations across the United States and other countries.
You have the option to own an Outback Steakhouse franchise branch.
The initial investment you need to make is between $1.3 million to $6 million, depending on the country and the size of the branch.
This initial investment includes the $10,000 franchise fee you pay upfront initially. Once you get things going, you also need to pay a royalty fee of 3.5% of gross sales.
Outback Steakhouse’s history goes back to 1988, when they were founded in Tampa, Florida. The aim of the restaurant was to offer a relaxed atmosphere and affordable, high-quality food.
The restaurant quickly became popular, and within a few years, it began expanding across the United States and the world. They now have over 1,000 stores all around the globe.
Cheesecake Factory Comparison
| Company | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Chili’s | $40,000-$60,000 | 1.25% | $1.7 million-$5.6 million |
| Red Robin | $35,000 | 5% | $1.8 million-$4.1 million |
| Cheesecake Factory | N/A | N/A | N/A |
Conclusion
Cheesecake Factory is one of the most popular restaurant chains in the United States with its original cheesecake recipe.
They make billions of dollars in revenue each year and open up new stores.
Unfortunately, they do not franchise in the United States and Canada, and they only license certain partners abroad.
Even though they are extremely popular, they chose the path to not franchise, and this means you can’t take a piece of it.
However, there are alternatives that you can open up a franchise with. Chili’s, Outback Steakhouse, and TGI Fridays are just one of the examples that allow you to franchise.
FAQ
Who is the CEO of Cheesecake Factory?
David M. Overton is both the CEO and the founder of the company. He has been running the business since February 1992.
Why don't the Cheesecake Factory franchise?
The main reason is that all their stores are company owned and they don’t want to change this.
They believe that franchising could affect the quality of food and service in a bad way.
What are the costs of licensing a Cheesecake Factory?
Cheesecake Factory opens up stores abroad through licensing, but individuals can’t get this license. They only license certain companies that they have agreements with.
Sources
https://investors.thecheesecakefactory.com/about-us/international/default.aspx
https://en.wikipedia.org/wiki/The_Cheesecake_Factory
https://investors.thecheesecakefactory.com/ir-resources/franchise-information/default.aspx
https://www.thecheesecakefactory.com/about-us
https://investors.thecheesecakefactory.com/about-us/company-overview/default.aspx
https://en.wikipedia.org/wiki/Outback_Steakhouse
https://www.outback.com/about-us
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.