The Halal Guys is one of the most iconic street food vendors in New York City, serving up delicious Middle Eastern cuisine since 1990.
With the growing popularity of their signature dishes, they have started offering franchising opportunities to entrepreneurs interested in becoming part of the Halal Guys family.
Opening a Halal Guys franchise is an exciting opportunity for those looking to be their own boss and run a successful business.
It’s also a great way to bring delicious Middle Eastern cuisine to your community.
In this article, we’ll be discussing what it takes to open a Halal Guys franchise, from the costs of opening to the requirements you’ll need to meet.
About The Halal Guys Franchise
The Halal Guys is a fast-casual restaurant franchise that specializes in Middle Eastern cuisine.
Their main specialty is their signature meats, served with a variety of white and hot sauces atop freshly cooked pita bread.
The menu also features other items such as falafel, hummus, shawarma, salads, and fries.
The Halal Guys have become well known for their delicious meats, cooked over an open flame and spiced to perfection. Their signature beef and chicken gyro sandwiches are particularly popular.
The sandwich includes slices of marinated chicken and beef, topped with lettuce, tomatoes, onions, and the unique Halal Guys white sauce – all served on fresh pita bread or over rice.
Overall, The Halal Guys provide an unforgettable culinary experience that has made them one of the most popular street food vendors in New York City.
With franchising opportunities available to entrepreneurs looking to bring their delicious fare to more communities around the country, it’s easy to see why The Halal Guys have become so beloved by customers everywhere.
The Halal Guys Franchise History
The Halal Guys have a long and fascinating history that has allowed them to become one of the most beloved street food vendors in New York City.
The founding story dates back to 1990, when Egyptian founders Mohamed Abouelenein, Ahmed Elsaka, and Abdelbaset Elsayed started out selling hot dogs from a cart in NYC.
However, it wasn’t until 1992 that they pivoted to selling halal food to Muslim taxi drivers – an endeavor that was soon rewarded with a growing fanbase.
Word quickly spread about The Halal Guys’ delicious meats and distinctive white sauce, propelling the business forward.
Their success led them to hire Fransmart in June 2014; within their first year of partnership, they had already closed deals for locations across California, Connecticut, New Jersey, Virginia, Houston, Austin, Illinois, Chicago, and Washington, as well as international deals for Canada, Malaysia, Indonesia, and the Philippines.
Today, The Halal Guys have over 100 locations across North America, Europe, and Asia, with 400+ more in development.
They are setting new standards for Middle Eastern cuisine while continuing to expand their footprint around the world.
Is Halal Guys a Franchise?
Yes, Halal Guys operates as a franchise. This means that individuals have the opportunity to invest in and operate their own Halal Guys restaurant by entering into a franchise agreement with the company.
The Halal Guys Franchise Model
| Description | Amount |
|---|---|
| Initial Franchise Fee | $60,000 |
| Initial Development Fee (Multi-unit) | $180,000 |
| Estimated Initial Investment Range | $364,850 – $1,162,250 |
| Royalty Fee | 6% of gross sales |
| Worldwide Creative Marketing Fee | 2% of gross sales |
| Local Advertising Fee | 1% of gross sales |
| Advertising Cooperative Fee | 0.5% of gross sales |
How Much Does It Cost To Open a Halal Guys Franchise?
The cost of opening a Halal Guys franchise is divided into three components: the franchise fee, initial investment, and ongoing royalty fees.
Halal Guys Franchise Fee
The franchise fee for a Halal Guys franchise is $60,000. For multi-unit franchise developers or opening five franchises, the fee is $180,000.
Halal Guys Franchise Cost
The estimated initial investment for a Halal Guys franchise ranges from $364,850 to $1,162,250.
Ongoing Costs and Fees
The ongoing costs and fees for a Halal Guys franchise include a 6% royalty fee on gross sales, a 2% worldwide creative marketing fee, a 1% local advertising fee (paid monthly to vendors), and a 0.5% advertising cooperative fee (paid monthly).
Advertising and Marketing Payments
Advertising and marketing payments for a Halal Guys franchise consist of a 2% worldwide creative marketing fee, a 1% local advertising fee (paid monthly to vendors), and a 0.5% advertising cooperative fee (paid monthly).
Total Investment to Open A Halal Guy Franchise
The total investment required to open a Halal Guys franchise ranges from $364,850 to $1,162,250. This estimate includes the initial franchise fee, development fee (if applicable), and other associated costs involved in setting up and operating the franchise.
How much does Halal Guys Franchise Make?
| Financial Statement 2019 FDD | Amount |
|---|---|
| Net Income | $1,898,117 |
| Initial Revenues | Almost $8 million |
| Operating Expenses | Almost $6 million |
| Accumulated Deficit | Decreased by almost $1,000,000 |
| Cash and Cash Equivalents (excluding restricted cash) | $1,314,392 |
| Net Cash Flows from Operating Activities | Approximately -$300,000 |
The financial statements of The Halal Guys, as reported in their 2019 FDD, reveal the following information:
- Net Income: The Halal Guys had a positive net income of approximately $1,898,117, indicating profitability.
- Initial Revenues: They generated almost $8 million in revenue at the start of their operations.
- Operating Expenses: The company’s expenses amounted to nearly $6 million to cover various operating costs.
- Accumulated Deficit: The Halal Guys were able to reduce their accumulated deficit by almost $1,000,000 compared to the previous year.
- Cash and Cash Equivalents: The company had cash and cash equivalents (excluding restricted cash) amounting to $1,314,392 by the end of 2019.
- Net Cash Flows from Operating Activities: The net cash flows lost from operating activities were approximately -$300,000, indicating a negative cash flow from day-to-day operations.
Units Opened / Closed
| Year | Number of Units Opened | Number of Units Closed |
|---|---|---|
| 2016 | 19 | – |
| 2018 | 40+ | – |
| 2019 | 21 | 4 |
Halal Guys Franchise Requirements
The Halal Guys franchise is an excellent opportunity for entrepreneurs and business owners looking to bring their delicious fare to more communities around the world.
To become a part of The Halal Guys family, there are a few requirements that must be met.
First, potential franchisees must meet certain financial qualifications. They must have a net worth of at least $1.5 million and demonstrate access to liquid capital of at least $1 million.
Additionally, The Halal Guys require all potential franchisees to have previous business experience in order to better prepare them for running a successful restaurant location.
In addition, each franchised location should include a professional General Manager who can oversee day-to-day operations and provide leadership for the staff members.
Finally, The Halal Guys expect franchisees to be ready to begin development within the next 3-6 months, as well as develop a minimum 5-unit territory in major US cities such as New York City, Los Angeles, and Chicago.
Halal Guys Franchise Training And Support
The Halal Guys provide a comprehensive training and support program for all of their franchisees.
The four-week program is held at the company’s headquarters offices in Flushing, New York, and consists of both classroom instruction and on-the-job training.
During the classroom portion, The Halal Guys will share invaluable insights on how to successfully open and manage a location, including menu development, operations management, marketing strategies, and more. This portion of the training typically takes between 29 to 40 hours to complete.
Once finished with the classroom instruction, franchisees can begin their on-the-job training, which typically lasts between 166 to 178 hours.
During this time, they will become familiar with the operations of their own restaurant location as well as get hands-on experience working with staff members and creating recipes to ensure quality control standards are met.
In addition to these initial training programs, The Halal Guys also provide ongoing support for franchisees.
They have a dedicated team of experts who provide essential guidance on everything from menu design and front-of-house operations management to local marketing initiatives that help each location stand out in its respective community.
Halal Guys Franchise Terms Of Agreement & Renewal
The Halal Guys Franchise offers a 10-year initial term for all its franchisees, which can be renewed for one additional term of 10 years.
Renewal is dependent on the franchisee meeting certain requirements specified by The Halal Guys and paying a renewal fee of $5,000.
Renewal requires that the franchisee perform periodic reviews to ensure that they are adhering to the standards set by The Halal Guys regarding menu design, quality control, customer service, and more.
Additionally, they must demonstrate that they are actively managing their restaurant in good faith and driving positive results.
Halal Guys Franchise Obligations And Restrictions
The Halal Guys have certain obligations and restrictions that all franchisees must adhere to.
Franchisees are required to use The Halal Guys’ recipes and standards for quality control at all times, as well as participate in any national or local marketing campaigns.
Franchisees must also comply with all health codes, follow The Halal Guys’ policies regarding customer service and maintain the highest standards for cleanliness.
Failure to adhere to these regulations can result in the termination of the agreement.
In addition to the above obligations, franchisees must also refrain from opening any other restaurant or food service establishments within a ten-mile radius of their location.
This restriction is in place to ensure that The Halal Guys can maintain exclusive control over the brand and its associated reputation.
Halal Guys Franchise Financial Assistance
The Halal Guys Franchise does not provide any direct or indirect financing for its franchisees.
The company does not guarantee notes, leases, or other financial obligations that the franchisee may take on in order to open and operate their restaurant.
However, it is possible for prospective franchisees to obtain financing from third-party sources.
The Small Business Administration (SBA) offers loans and loan guarantees to qualified individuals who are interested in starting a business.
The SBA also provides counseling services, resources, and information on accessing capital to help entrepreneurs get started.
In addition to the SBA, there are other sources of financing available to entrepreneurs, such as commercial banks, credit unions, venture capital firms, and angel investors.
It is important that prospective franchisees explore all options available to them before taking on any financial commitments.
Halal Guys Comparison
| Company | Halal Guys | El Pollo Loco |
|---|---|---|
| Founded In | 1990 | 1980 |
| Initial Investment | $231,600-$834,000 | $782K – $2.1M |
| Franchise-Fee | $40,000 | $40,000 |
| Total Outlets | 94 | 450 |
| Annual Revenue | $8 Million | $96.4 Million |
Conclusion
Opening a The Halal Guys Franchise can be a great way for entrepreneurs to get involved in the food service industry.
With their established brand presence and expertise, The Halal Guys provide franchisees with an opportunity to do a successful business.
Now that you’ve learned about the costs, training programs, and financial assistance available for The Halal Guys Franchisees, you have a better understanding of what it takes to become a successful franchisee.
Frequently Asked Questions
Who Owns The Halal Guys?
The Halal Guys is owned by the founders, Mohamed Abouelenein, Ahmed Elsaka, and Abdelbaset Elsayed.
Is Opening A Halal Guys Franchise Worth It?
Opening a The Halal Guys Franchise can be a great way to get involved in the food service industry and do a successful business.
How Many Halal Guys Locations Are There?
At the time of writing, there are over 100 Halal Guys locations worldwide and over 400 in development.
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.