Texas Roadhouse Franchise Cost, Revenue & Profit 2024

When it comes to Southwestern cuisine, there’s no better name than Texas Roadhouse Franchise.

With locations across the United States and several other countries, the franchise serves up mouthwatering steaks, ribs, burgers, wings, and more.

Texas Roadhouse is renowned for its hospitality and its unique atmosphere. This is a place where everyone can feel welcome and get down to some good ol’ Texas-style eats.

The restaurant offers a variety of classic dishes with all the flavorings of the Southwest: from smoky, mesquite-grilled steaks to spicy jalapeno poppers and loaded nachos.

All of this makes Texas Roadhouse an excellent franchise opportunity for entrepreneurs who want to bring the Southwest flavor to their communities.

In this article, we’ll cover everything you need to know about the Texas Roadhouse franchise and what it takes to become a franchisee.

Texas Roadhouse Franchise Cost

About Texas Roadhouse Franchise

Texas Roadhouse is a chain of steakhouses characterized by a strong Western aesthetic.

It provides extensive menus that include a variety of meats, seafood, steaks, and ribs.

In fact, the ribs and steaks from the menu of Texas Roadhouse have won many national cooking competitions.

Because they are never frozen and always sliced fresh, the steaks at Texas Roadhouse are among the most highly appreciated in the restaurant industry.

In order to promote a more Western image for the restaurant, the wait staff at Texas Roadhouse learns line dancing and continues to perform it throughout the night in time to popular country music.

Whether it’s the laid-back vibes, the huge portions at an affordable price, or the extensive and varied menu, it’s no wonder why Texas Roadhouse has become one of the most popular franchise opportunities in the United States.

When you open a Texas Roadhouse franchise, you can expect to enjoy the benefits of working with an established and successful brand.

With years of experience in the hospitality industry, the franchise provides experienced support and training to help its franchisees succeed.


Texas Roadhouse Franchise History

Texas Roadhouse Franchise History

Texas Roadhouse’s history dates back to February 17, 1993. It was founded by W. Kent Taylor in Clarksville, Tennessee.

Kent had been working as a KFC manager and dreamed of opening a restaurant that featured Colorado-themed cuisine.

He showed investor Dr. John Rhodes drawings on cocktail napkins which convinced him and two colleagues to invest $100,000 each, and the first Texas Roadhouse opened its doors soon after.

In 1994, three more restaurants opened in Cincinnati, Ohio; Sarasota, Florida; and Gainesville, Georgia.

By the late 1990s, Texas Roadhouse had begun expanding rapidly across the United States, and by 1999, 67 restaurants were open for business.

In 2004, the company became publicly traded and increased its franchise opportunities for entrepreneurs looking to open their own Texas Roadhouse.

In September 2011, Texas Roadhouse took its first steps into international expansion when it opened its first location in Dubai.

Today, there are over 697 restaurants across 49 states as well as 10 different countries around the world serving up delicious steaks, ribs, burgers, and much more with a unique Texan flair!


Franchise Model Table

Cost or FeeAmount or Percentage
Initial Investment$1,600,000–$3,000,000
FranchiseYES
Franchise Fee$40,000
Royalty Fee4%
Liquidity$200,000
Estimated Outlets697+
Type of costRenovationBuild out
Franchise fee$40,000$40,000
Construction/renovation$605,000 – $1,500,000$1,500,000 – $3,000,000
Site evaluation/architect$150,000 – $200,000$150,000 – $200,000
Furniture, fixtures, decor$180,000 – $200,000$180,000 – $200,000
Equipment$250,000 – $650,000$850,000 – $915,000
Training costs$90,000 – $110,000$90,000 – $110,000
Additional funds*$442,000 – $641,500$442,000 – $641,500
Other$336,500 – $1,343,500$342,500 – $1,357,000
Total$2,093,500 – $4,685,000$3,595,500 – $6,463,500

How Much Does It Cost To Open A Texas Roadhouse Franchise?

The cost of opening a Texas Roadhouse franchise depends on several factors, such as location, the size of the restaurant, and other start-up costs.

The standard franchise fee is $40,000, but additional fees may be required.

Additionally, the initial investment can range anywhere from $1,600,000 to $3,000,000, depending on the size and scope of the project.

This includes the cost of purchasing or leasing the building, equipment, inventory, training and licensing fees, insurance, and other costs associated with opening a restaurant.

To qualify for a Texas Roadhouse franchise opportunity, potential investors must have liquid cash available of at least $200,000.

This amount is needed to fund ongoing operations and take advantage of any unexpected opportunities or issues that may arise during the business.

Once you are approved to become a franchisee with Texas Roadhouse, you will be expected to pay an ongoing royalty fee equal to 4% of your monthly gross sales.

Other fees include advertising contributions which are typically set at around 4% as well as ongoing training fees, which are estimated at around $5,500 per year.

Texas Roadhouse also boasts some great benefits for its franchisees, such as discounts on bulk purchases from vendors, access to marketing materials through their corporate office, and discounts on products used in running your restaurant, such as furniture and equipment.

When it comes to Texas Roadhouse franchises, many may wonder who owns Texas Roadhouse.


How Much Does Texas Roadhouse Franchise Make Per Year?

The average annual sales per Texas Roadhouse restaurant is $2,956,522, which is calculated by dividing the total franchise revenue of $204 million by the number of franchises (69).

Based on an adjusted EBITDA margin of approximately 29%, it can be estimated that Texas Roadhouse achieves a net profit margin of around 15% of sales on average.

With an average annual sales figure of $2,956,522, this suggests that franchisees earn an average net profit of approximately $443,000 per year.

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%2955534.00
Rent10.63%(314025.49)
Insurance5.31%(157012.74)
Salaries21.25%(628050.97)
Franchise Royalty Fees5.31%(157012.74)
Utilities2.13%(62805.10)
Cost of Goods Sold (COGS)26.56%(785063.72)
Labor (Variable)13.81%(408233.13)
Total (Expenses)85.00%(2512203.90)
Net Profit15.00%443330.10

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.


Texas Roadhouse Franchise Payback Period

Texas Roadhouse Franchise Payback Period

If the total investment is $3 million and the average annual net profit remains at $443,330, the payback period can be calculated as follows:

Payback period = Total Investment / Average Annual Net Profit Payback period = $3,000,000 / $443,330 ≈ 6.7 years

With a $3 million investment, the payback period would be approximately 6.7 years.


Texas Roadhouse Failure Rate

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20187069-1
201969690
202069690

For the Franchised outlets:

  • In 2018, the failure rate was (1)/70×100≈1.43%
  • In 2019, the failure rate was (0)/69×100≈0.00%
  • In 2020, the failure rate was (0)/69×100≈0.00%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2018440464+24
2019464484+20
2020484507+23

For the Company-Owned outlets:

  • In 2018, the growth rate was (24)/440×100≈5.45%
  • In 2019, the growth rate was (20)/464×100≈4.31%
  • In 2020, the growth rate was (23)/484×100≈4.75%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2018510533+23
2019533553+20
2020553575+22

For Total outlets:

  • In 2018, the growth rate was (23)/510×100≈4.50%
  • In 2019, the growth rate was (20)/533×100≈3.75%
  • In 2020, the growth rate was (22)/553×100≈3.97%

According to the above-mentioned data, there is no failure rate for company-owned 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 Texas Roadhouse declined from 2018 to 2020, showing a failure rate between 1.43% and 0.00%. On the other hand, for company-owned outlets, the growth rate of Texas Roadhouse is lying in the range between 5.45% and 4.75% for the same period of time.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Texas Roadhouse franchise has expanded in the years 2018-2020, showing a total growth rate between 4.50% and 3.97%.


Texas Roadhouse Franchise Requirements

Texas Roadhouse is always looking for passionate and experienced entrepreneurs to join their team of franchisees.

In order to qualify, potential investors must have access to a minimum of $200,000 in liquid cash, which will be used to fund the ongoing operations of the business as well as any unexpected opportunities or issues that may arise during the course of business.

In addition, Texas Roadhouse also requires that potential franchisees have experience in the food & beverage industry.

This includes knowledge of creating and managing menus, developing operational systems and procedures, and handling customer relations.

The ideal candidate should also have a passion for Southwestern cuisine and a commitment to uphold the Texan flair that has become synonymous with the Texas Roadhouse brand.

This includes creating an atmosphere with high-energy music, bold décor, and attentive service that combines elements like live country music, line dancing, and longneck beers served in mason jars.


Texas Roadhouse Franchise Training And Support

Texas Roadhouse Franchise Training And Support

Texas Roadhouse provides comprehensive training and support for all its franchisees.

The initial training program lasts about three weeks and covers topics such as store operations, food safety, marketing, personnel management, finances, and customer service.

At the end of the three-week program, new franchisees are sent to a company-owned location for on-the-job training, typically lasting 4 to 6 weeks.

During this time, they are able to put the knowledge they learned during the initial training into practice while also getting hands-on experience with the day-to-day operations of the restaurant.

Once the on-the-job training is complete, Texas Roadhouse provides ongoing support to its franchisees to ensure that their restaurants are running smoothly.

This includes assistance with marketing efforts as well as help in navigating any questions or issues that may arise during the business.


Texas Roadhouse Franchise Terms Of Agreement & Renewal

Texas Roadhouse offers its franchisees a 20-year agreement with the option to renew up to two times.

Upon agreeing to the terms of the initial agreement, each franchisee will be granted an initial term of 20 years and may be eligible for renewal for two additional terms of 10 years each, assuming they meet all requirements for renewal.

To remain in good standing for renewal, franchisees must pay their royalty fees and advertising contributions on time, continue to abide by all Texas Roadhouse rules and regulations, as well as maintain their restaurant according to the standards set forth by Texas Roadhouse. 

Additionally, franchisees must remain current with any changes or updates that may arise throughout the course of their agreement.


Texas Roadhouse Franchise Obligations And Restrictions

In addition to the requirements and restrictions outlined in the initial term of the agreement, Texas Roadhouse also has a few obligations and restrictions that must be adhered to by all franchisees.

This includes maintaining proper training standards for employees, keeping accurate daily financial records, following all health and safety regulations, using only approved suppliers and vendors, refraining from any type of discrimination or harassment in the workplace, as well as prohibiting smoking inside the restaurant premises.

Franchisees must only sell approved menu items, and all ingredients, supplies, and equipment must be purchased from authorized suppliers.


Texas Roadhouse Franchise Financial Assistance

Texas Roadhouse does not offer any form of direct or indirect financial assistance for its franchisees.

However, they do have relationships with independent lenders who may be able to assist franchisees in obtaining financing for their business venture.

Franchisees are responsible for arranging their own financing to cover the costs related to opening a new restaurant, which includes paying the franchise fee, buying inventory and equipment, constructing the restaurant, and covering any other related expenses.

Potential franchisees interested in restaurants can investigate opportunities with the Cava Franchise, Portillo’s Franchise, Hooters Franchise, Chili’s Franchise, and Dave And Buster’s Franchise.


Texas Roadhouse Comparison

CompanyTexas RoadhouseFirehouse Subs
Year Founded 19931994
Franchise Fee$40,000$20,000
Initial Investment$1,600,000–$3,000,000$412,731
Number of Outlets697+1210+

Conclusion

Texas Roadhouse is an excellent opportunity for entrepreneurs looking to open a successful steakhouse franchise.

With its long history of success and comprehensive training and support, it provides an ideal platform from which to launch a business venture.

The initial cost and requirements of opening a Texas Roadhouse franchise may seem daunting, but with the right financing in place and a commitment to following the company’s rules, regulations, and standards, any entrepreneur can be on their way to owning their own steakhouse franchise.


Frequently Asked Question

What is the most popular cuisine at Texas Roadhouse?

The most popular cuisine at Texas Roadhouse is Cactus Blossom.

What is the Texas Roadhouse slogan?

Legendary Food, Legendary Food

Does Texas Roadhouse Offer Franchising?

Yes, Texas Roadhouse offers franchising opportunities to qualified entrepreneurs.

Who is the Owner Of Texas Roadhouse?

Texas Roadhouse is an American chain restaurant owned by Kent Taylor, the founder and CEO of the parent company Texas Roadhouse, Inc.

The chain was founded in 1993 in Clarksville, Indiana, and as of 2018 has grown to over 580 locations across 49 U.S. states.

Is Opening A Texas Roadhouse Franchise A Good Investment?

Yes, opening a Texas Roadhouse franchise can be a great investment as long as you are willing to commit to the initial costs and requirements of the franchise.

How Many Texas Roadhouse Locations Are There?

There are currently more than 690 Texas Roadhouse locations across the United States and 10 other countries.

Who founded Texas Roadhouse?

The Texas Roadhouse was founded by Wayne Kent Taylor in the year 1993. The first Texas Roadhouse outlet was opened in Clarksville, Indiana.

Where is Texas Roadhouse Headquartered?

Texas Roadhouse has a Western theme and generally serves steak, barbecue, and seafood. The headquarters of Texas Roadhouse is situated in Louisville, Kentucky.

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