Have you heard about Cousins Maine Lobster’s famous dishes and franchising system and are considering of owning a franchised location with them? It sure looks like a good idea with good brand popularity and long-standing franchise expertise.
In this article, we will give you all the details about Cousins Maine Lobster, its franchise system, what you can expect to spend and earn, and other crucial details.
About Cousins Maine Lobster And Cousins Maine Lobster History
Cousins Maine Lobster is a franchise food truck and restaurant offering franchises across the United States.
The company was founded in 2012 and started to franchise in 2014. Their specialty is premium, wild-sourced, and sustainably harvested Maine lobster.
Now, the company has over 60 locations across the United States, both in food truck and restaurant types.
You can choose which type of location you want and make it budget-friendly for you. The company also has an extensive franchise system to help new entrepreneurs succeed.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $197,350-$897,900 |
| Franchise | YES |
| Franchising Since | 2014 |
| Franchise-Fee | $40,000 |
| Royalty-Fee | 6% |
| Liquidity | $250,000-$500,000 |
| Estimated Outlets | 62 |
How Much Does It Cost To Open A Cousins Maine Lobster Franchise?
The total cost to open a Cousins Maine Lobster franchise varies between $197,350 and $897,900. The number mainly changes whether you want to open a food truck or a traditional restaurant.
For food trucks, the expected cost is between $197,350 and $537,300, and for traditional restaurants, it is between $224,450 and $897,900.
Both expected costs include the $40,000 franchise fee and all the necessary startup costs.
Since you must purchase most of the products to use for the startup from approved vendors of the company, the fees generally stay the same for these products.
Franchise Requirements
There are different levels of professional requirements to follow to become a Cousins Maine Lobster franchise. If you want to open a food truck, it is favorable to have experience in the industry, but not it is not required.
For the restaurant franchises, the operator must have experience in the food and beverage industry or can appoint a general manager with experience.
Additionally, you need to have business management experience, apart from industry experience. You also need to have liquidity of between $250,000 to $500,000 and a net worth of at least $500,000.
Cousins Maine Lobster Franchise: Profit & Revenue
The annual gross revenue for the company in 2022 was $1.19 million. In the same year, the company’s net profit was $543,916 annually.
The owner of Cousins Maine Lobster, CML Franchises, had a total revenue of $4.2 million and a net profit of $2.2 million for the 2021 fiscal year.
Overall Sales
As specified in the franchise disclosure document of Cousins Maine Lobster, the average annual sales for franchised locations were between $1.5 million and $2 million.
This is the average number for the locations that were open for a complete 12 months before the report was published. The highest earners had more than $3 million in annual sales, and the lowest was below $1 million.
If we assume a profit margin of 15%, then we can calculate that Cousins Maine Lobster franchise owner make $262,500 in yearly net profits on average.
This is how we calculated this amount:
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 1750000.00 |
| Rent | 10.63% | (185937.50) |
| Insurance | 5.31% | (92968.75) |
| Salaries | 21.25% | (371875.00) |
| Franchise Royalty Fees | 5.31% | (92968.75) |
| Utilities | 2.13% | (37187.50) |
| Cost of Goods Sold (COGS) | 26.56% | (464843.75) |
| Labor (Variable) | 13.81% | (241718.75) |
| Total (Expenses) | 85.00% | (1487500.00) |
| Net Profit | 15.00% | 262500.00 |
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Payback Period Of Cousins Maine Lobster
The investment of Cousins Maine Lobster is $897,900, and a yearly profit is $262,500. So, to find out how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $897,900/ $262,500= 3.4 years
Based on these figures, it will take approximately 3-4 years to pay back the initial investment for Cousins Maine Lobster. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Failure Rate Of Cousins Maine Lobster
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 8 | 7 | -1 |
| 2021 | 7 | 5 | -2 |
| 2022 | 5 | 7 | +2 |
For the Franchised outlets:
- In 2020, the failure rate was (1)/8×100≈12.5%
- In 2021, the failure rate was (2)/7×100≈28.57%
- In 2022, the growth rate was (2)/5×100≈40%
According to the above-mentioned data, we can see that the franchised outlets for Cousins Maine Lobster grew only in 2022, showing a growth rate of 40%.
Earlier in the year from 2020-2021, the failure rate of the company was lying in the range between 12.5% and 28.57%.
Training and Support Of Cousins Maine Lobster
Either the franchisee or the designated general manager for the store must attend an initial training program provided by the franchisor. This training takes place in a physical location which Cousins Maine Lobster designates.
The initial training focuses on the operations of the store and other details the manager must know in order to run the store successfully.
Cousins Maine Lobster also provides ongoing assistance both before and after the opening of the store. They provide real estate, construction, design, furnishing, and other similar support before the opening. They also give you continuous operational and marketing support after the opening.
Terms of Agreement and Renewal
The initial term of the franchise agreement is for five years, and the agreement is renewable. If you meet the renewal requirements, you might be given permission to renew for an additional term of five years. There might be a renewal fee applicable.
Obligations and Restrictions
The franchisee is obligated to purchase all of the related products like food, drinks, equipment in the store, technology, furnishings, and fixtures from the approved suppliers.
Additionally, The store must be under the direct supervision on a full-time, day-to-day basis by the franchisee. If the owner of the store is an entity, a general manager must be designated, which must be approved by the franchisor.
The franchisee is restricted to only selling products and services that the franchisor approves and specifies in the operation manual of the franchise agreement. You can’t sell products or services that are not approved and added to the manual.
The premise of the food truck or the restaurant cannot be used for any other purpose than a Cousins Maine Lobster franchise.
Financial Assistance
Cousins Maine Lobster doesn’t offer direct financial assistance, but they have relationships with third-party financial lenders. That’s why they provide indirect financial assistance by introducing you to these third parties. The exact assistance you will receive will depend on your individual situation.
Cousins Maine Lobster Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Joe’s Crab Shack | $50,000 | 4% | $1.4 million-$4.5 million |
| Angry Crab Shack | $50,000 | 5% | $411,800-$1.1 million |
| Cousins Maine Lobster | $40,000 | 6% | $197,350-$897,900 |
Conclusion
Cousins Maine Lobster is a popular franchise specializing in Maine lobsters that are wild-sourced and sustainably harvested. The franchise has over 60 locations with an established franchise system and a relatively lower entry cost compared to its competitors.
You can also choose which type of franchise you want to open with them, either a food truck or a restaurant.
Overall, the company offers good potential for both new and experienced entrepreneurs, with almost $1.5 million in overall annual gross sales per store. If you have the experience and the cash they are looking for, Cousins Maine Lobster might be a great idea.
FAQs
Who owns Cousins Maine Lobster?
The founders, Jim Tselikis and Sabin Lomac, are the owners of the Cousins Maine Lobster brand.
How much does it cost to open a Cousins Maine Lobster?
It costs between $197,350 and $897,900 to open a Cousins Maine Lobster. Depending on whether it’s a food truck or a restaurant, the costs vary a lot.
What is the franchise fee for Cousins Maine Lobster?
The franchise fee is a fixed $40,000 per Cousins Maine Lobster location.
Where is Cousins Maine Lobster headquartered?
Cousins Maine Lobster’s headquarters is located in Los Angeles, California.
How many locations does Cousins Maine Lobster has?
Cousins Maine Lobster has 36 food trucks and 7 brick-and-mortar locations.
Sources
https://www.cousinsmainelobster.com/franchise