Teriyaki Madness Franchise Cost, Failure Rate & Profit 2024

Are you thinking about owning a Teriyaki Madness franchise? The company is one of the fastest-growing Japanese restaurants, and it looks like a great opportunity for entrepreneurs. If you are one of those entrepreneurs who think of owning a Teriyaki Madness Franchise but are not sure if it’s a good investment, you are in the right place.

In this article, we will go over everything about Teriyaki Madness and its franchise system, such as the costs, training, support, requirements, and many other things.


About Teriyaki Madness And Teriyaki Madness History

About Teriyaki Madness And Teriyaki Madness History

Teriyaki Madness is one of the very popular quick-serve Japanese restaurants in the United States with an appearance outside of the US, as well.

The restaurant specializes in teriyaki bowls with rice, vegetables, noodles, and grilled meat. They were founded in 2003 and started to franchise in 2012, which allowed them to grow rapidly.

Currently, the company has over 130 outlets and makes over $1 million in annual revenue. Most of their stores are franchise-owned, and they continue to franchise to interested parties to grow their reach.


Franchise Model Table

Cost Or FeesAmount
Initial Investment      $312,500-$731,260
FranchiseYES
Franchising Since2012
Franchise-Fee$45,000
Royalty-Fee6%
Liquidity$100,000
Estimated Outlets130+

How Much Does It Cost to Open A Teriyaki Madness Franchise?

The total average expected cost to open one Teriyaki Madness franchise outlet is between $312,500 and $731,260. This number comes from the company’s FDD, where they calculate it by past experiences and current prices.

This expected cost includes all the start-up costs, such as the $45,000 franchise fee, payroll, equipment, real estate, construction, insurance, and others. The actual costs might vary depending on the location and the size of the store.


Franchise Requirements Of Teriyaki Madness

On the professional side, Teriyaki Madness does not necessarily look for experience in food service or restaurant management experience. If you have these, it will be a plus in getting approved, but it’s not a necessity. A franchisee must showcase strong management skills and provide excellent customer service.

On the financial side, however, the prospective franchisee needs to meet certain thresholds. The franchisee must have a net worth of between $400,000 and $1 million. In addition, the prospect must have a liquidity of at least $100,000.


Teriyaki Madness: Profit & Revenue

According to the latest figures published in Teriyaki Madness’s FDD, the company made $1.7 million in revenue in 2021. When the expenses were removed, the company didn’t make any profit but made a loss of $104,000 in the same year.

These numbers are slightly better than the previous year, as the revenue was $1.4 million, and the net loss was $156,000 in 2020.


Failure Rate Of Teriyaki Madness

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20206088+28
202188100+12
2022100121+21

For the Franchised outlets:

  • In 2020, the growth rate was (28)/60×100≈46.6%
  • In 2021, the growth rate was (12)/88×100≈13.6%
  • In 2022, the growth rate was (21)/100×100≈21%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
202020-2
202101+1
202210-1

For the Company-Owned outlets:

  • In 2020, the failure rate was (2)/2×100≈100%
  • In 2021, the growth rate was (1)/0×100≈Can’t be divided by 0
  • In 2022, the failure rate was (1)/1×100≈100%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20206288+26
202188101+13
2022101121+20

For Total outlets:

  • In 2020, the growth rate was (26)/62×100≈41.9%
  • In 2021, the growth rate was (13)/88×100≈14.7%
  • In 2022, the growth rate was (20)/101×100≈19.8%

According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.

We can see that the franchised outlets for Teriyaki Madness grew from 2020 to 2022, showing a growth rate between 46.6% and 21%.

On the other hand, for company-owned outlets, Teriyaki Madness only grew in the year 2020. Then, from 2021- 2022, it started declining.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Teriyaki Madness franchise has expanded in the years 2020-2022 showing a total growth rate between 41.9% and 19.8%


Payback Period Of Teriyaki Madness

With an investment of $731,260 and an estimated 10% profit on the average sales, the yearly profit would be $102,400.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $731,260 / $102,400= 7.14 years

Based on these figures, it will take approximately 7.14 years to pay back the initial investment for Teriyaki Madness. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Overall Sales Of Teriyaki Madness

In the FDD of Teriyaki Madness, we can see that the average gross sales per unit was $1.16 million. The highest-earning stores made $2.7 million, and the lowest made $525,000 annually. About 47% hit or went above the average gross sales. The average revenue for 2021 shows a 33% growth from the previous year.

On average, the Teriyaki Madness franchise makes $1,024,000 in sales per year.


Training and Support Of Teriyaki Madness

The initial training program takes place in Teriyaki Madness’s Denver office and lasts four days. The franchisees will also receive on-site training for 10 to 17 days to teach about the grand opening.

There is also a hands-on training that lasts for 10 days and aims to engage the franchisee and the managers on a one-on-one basis. This training generally happens after the grand opening and not before.

As part of Teriyaki Madness’s support program, the franchisor continues to offer franchise support via phone, email, and frequent on-site visits. Every time the manual gets updated, the franchisees get taught about the changes.

In addition, the franchisees also receive marketing support from the company’s marketing team. They work with social media platforms, ad agencies, review management companies, and others to curate marketing strategies for the franchisee.


Terms of Agreement and Renewal

The initial length of the agreement is ten years. Once the ten years are over, there is a possibility to renew the agreement for two additional five-year periods. The franchisee must meet certain conditions to be eligible for renewal.


Obligations and Restrictions Of Teriyaki Madness

The franchisee is obligated to be actively involved in the daily operations of the franchised outlet. The Teriyaki Madness franchise does not allow for absentee ownership. In special cases, a managing owner who completed the necessary training can be designated to oversee the daily operations.

In Teriyaki Madness franchised outlets, only the products and services that Teriyaki Madness specifies or at least approves can be sold. Also, the premise of the franchised outlet cannot be used for any other purpose than to run a Teriyaki Madness franchise.


Teriyaki Madness Financial Assistance

Teriyaki Madness does not provide direct or indirect financial assistance for franchisees. The company does not guarantee any kind of lease, financial obligation, grant, or any other thing. It is the franchise’s obligation to find the necessary financing for the outlet.

For those looking to open a franchise in the restaurant industry, possibilities include Fat Shack,  Philly Pretzel, Del Taco Franchise,  Applebee’s Franchise, and Qdoba Mexican Eats Franchise.


Teriyaki Madness Comparison

NameFranchise FeeRoyalty FeeInitial Investment
Waba Grill$35,0005%$341,000-$577,000
Panda Express$25,0008%$426,700-$2.4 million
Teriyaki Madness$45,0006%$312,500-$731,260

Conclusion

In the end, Teriyaki Madness stands as a great opportunity with about $1 million in annual revenue per franchised store and the potential to go as high as $2.5 million. The initial investments are not high, and compared to some of its competitors, it can even be cheaper than some.

They provide extensive training to new franchisees to make sure that they know how to operate their store and start making money right away. Overall, Teriyaki Madness looks like a good opportunity as a franchise business for entrepreneurs.


FAQs

Who is the owner of Teriyaki Madness?

Michael Haith is the CEO and owner of Teriyaki Madness.

How many Teriyaki Madness locations are there?

There are over 130 active locations both in the United States and abroad. However, a majority of them are in the United States.

Where is the headquarteres of Teriyaki Madness?

The headquarters of Teriyaki Madness is located in Denver, Colorado.

Who founded Teriyaki Madness?

The founders of Teriyaki Madness are Rod Arreola, Alan Arreola, and Eric Garma.

Sources

FAQ
https://www.franchisedirect.com/teriyaki-madness-franchise-costs-fees-fdd
https://wabagrillfranchising.com/research/costs-and-fees/

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