Did you ever want to own a fast-food restaurant via a franchise model? There are many competitions in this industry, and it’s important to make the best decision as an entrepreneur looking to own a franchise. Wienerschnitzel is one of those fast-food franchise chains that offers a lucrative opportunity.
If you are looking to own a Wienerschnitzel franchise but are not sure if it’s a good idea, you are in the right place. We will talk about Wienerschnitzel, their franchise model, associated costs, the support they give you, and all other details.
About Wienerschnitzel And Wienerschnitzel History
Wienerschnitzel is an American fast food franchise chain specializing in hot dogs but also offering other similar fast food like burgers, fries, sandwiches, and snacks.
They were founded in 1961 and have been franchising since around the year they were founded.
Currently, Wienerschnitzel has over 350 stores across the United States and in certain countries globally.
They have a very established franchise system that helps entrepreneurs to start and be successful with their ventures. Due to their name and specialized business in the fast food industry, they offer a great opportunity for any level of entrepreneur to be successful.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $303,600-$1.4 million |
| Franchise | YES |
| Franchising Since | 1961 |
| Franchise-Fee | $5,000-$32,000 |
| Royalty-Fee | 5% |
| Liquidity | $300,000 |
| Estimated Outlets | 379 |
How Much Does It Cost To Open A Wienerschnitzel Franchise?
Depending on whether you lease the restaurant building or you will develop a raw land from scratch, your costs will vary. Your average expected build cost, permits, site improvements, equipment, employees, lease, inventory, and other start-up costs will be between $303,600 and $1.4 million.
Wienerschnitzel offers three different franchise store types, and each of these types also affects the total cost. These variables are the average of the open franchised stores, and your real numbers might be outside of these variables.
Franchise Requirements
You need to have a minimum of $1 million net worth, $300,000 of which is in liquid funds. You can meet this financial requirement by combining the financial value of more than one partner. If you are using funding through a bank, you usually need 33% of this number.
The preferred franchisee profile is those who have experience in restaurant operations. However, they also consider franchisees with business management or business ownership experience.
Profit & Revenue
The latest available information about Wienerschnitzel’s revenue is from 2019. The company had $341 million in annual revenue in 2019, and there is no official information about its net profits.
However, if we use the 27% profit margin included in the FDD per franchised store, we can make an estimation. Based on that, we estimate that Wienerschnitzel’s annual net profit is around $92 million.
Overall Sales Of Wienerschnitzel Franchise
The overall annual sales numbers for a Wienerschnitzel franchise store are about $1.5 million.
This is the top 25% of all the Wienerschnitzel franchise stores that were open in the entire 2022. Across all restaurants, the overall annual sales are $880,980.
How Much Does The Wienerschnitzel Franchise Owner Earn?
Based on the Franchise Disclosure Document from Wienerschnitzel, there is a 27% profit margin on average per store. This equals around $237,864 in net annual profit per franchised store. This is also the franchise owner’s salary if they are only one person.
This is how we calculated this amount:
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 880980.00 |
| Rent | 9.13% | (80389.43) |
| Insurance | 4.56% | (40194.71) |
| Salaries | 18.25% | (160778.85) |
| Franchise Royalty Fees | 4.56% | (40194.71) |
| Utilities | 1.83% | (16077.89) |
| Cost of Goods Sold (COGS) | 22.81% | (200973.56) |
| Labor (Variable) | 11.86% | (104506.25) |
| Total (Expenses) | 73.00% | (643115.40) |
| Net Profit | 27.00% | 237864.60 |
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 Wienerschnitzel
With an investment of $1,400,000 and a yearly profit of $237,864, we can calculate the payback period of Wienerschnitzel.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $1,400,000 / $237,864 = 5.8 years
Based on these figures, it will take approximately 6 years to pay back the initial investment for Wienerschnitzel. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Failure Rate Of Wienerschnitzel
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 325 | 326 | +1 |
| 2020 | 326 | 327 | +1 |
| 2021 | 327 | 323 | -4 |
For the Franchised outlets:
- In 2019, the growth rate was (1)/325×100≈0.30%
- In 2020, the growth rate was (1)/326×100≈0.306%
- In 2021, the failure rate was (4)/323×100≈1.22%
According to the above data, we can conclude that the Wienerschnitzel franchise grew consecutively in the years 2019 and 2020, showing a growth rate between 0.30% and 0.306%. However, the company started to decline, showing a failure rate of 1.22%
Wienerschnitzel Training and Support
There is a comprehensive eight-week initial training program aiming to provide information on everything related to managing a Wienerschnitzel restaurant.
The owner and the designated general manager need to take this training, and you need to complete it 5 months prior to the store’s opening.
In addition to the initial training program, they also provide training assistance to the new employees of the franchise store.
Their support program includes on-site support for the grand opening, which helps you to smoothly open and run your store. You also get $20,000 local marketing spend for your opening.
Terms of Agreement and Renewal
The initial agreement could be for up to 20 years, but it depends on specific situations. Your building’s lease might affect the length of the agreement, but it could be up to 20 years maximum. A renewal might be possible based on your franchise agreement.
Obligations and Restrictions
The franchisee is obligated to be present at the daily operations of the restaurant. Absentee ownership is not allowed, and you can’t designate a manager except for certain circumstances to manage the store.
Financial Assistance
Wienerschnitzel doesn’t offer direct financial assistance, but they might offer indirect financial assistance. They have relationships with third-party lenders. They could introduce you to these lenders, but they play no role in the decision-making process.
Wienerschnitzel Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Nathan’s Famous | $30,000 | 5.5% | $573,850-$2 million |
| A&W Restaurants | $15,000-$30,000 | 5% | $278,285-$1.5 million |
| Wienerschnitzel | $5,000-$32,000 | 5% | $303,600-$1.4 million |
Conclusion
Wienerschnitzel is a popular and fairly big American fast-food franchise chain operating mainly in the United States. Even though they are not as big as many other fast-food chains in the US, they have a specialized offer with their famous hot dogs and have an extraordinary average overall sale at $1.5 million per franchised store.
For any level of entrepreneur who has a business background, Wienerschnitzel stands as a lucrative opportunity and can provide good value in the long run.
The expected initial investment could go as high as $1.4 million, but with the expected net profit, the payback period is at around 6 years, which is quite short compared to other franchise businesses.
FAQs
Is Wienerschnitzel a franchise?
Yes, Wienerschnitzel is a franchise, and they have been franchising for decades with an established franchise system.
Do I need to work at Wienerschnitzel before being eligible to be a franchisee with them?
No, you don’t need to have worked at Wienerschnitzel, but you need to have business ownership or business management experience in any industry. The restaurant industry is preferable.
How much can I expect to make as a Wienerschnitzel franchisee?
The average expected net profit annually is $237,864. It could be higher or lower depending on several factors.
Who Owns Wienerschnitzel?
Wienerschnitzel is owned by Galardi Group, Inc.. The President & CEO of the company is J.R Galardi.
Who founded Wienerschnitzel?
Wienerschnitzel was founded in 1961 by John Galardi with a single location in South California.
Where is Wienerschnitzel headquartered?
Wienerschnitzel is located in Newport Beach, California, United States. It is an American fast-food company specializing in hot dogs.
How many locations does Wienerschnitzel have?
Wienerschnitzel is the world’s largest hot dog chain. It is operating in more than 379 locations.
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