Zaxby’s Franchise Cost, Owner Salary & Profit 2024

As consumers’ preferences increasingly tilt toward fast-service restaurants that offer fresh, wholesome meals, Zaxby’s has successfully carved out its niche in this bustling market.

Known for its savoury chicken fare and a unique blend of Southern charm, Zaxby’s has captured hearts and appetites alike, setting itself apart from competitors.

This popularity, in turn, has transformed Zaxby’s into a highly appealing prospect for potential franchisees seeking to ride the wave of its thriving business model.

Below, we’ll walk you through the story of Zaxby’s, dive into the franchise costs, explore the requirements, and touch on the training process. Read on to get a solid understanding of what it means to be part of the Zaxby family.

Zaxby's Franchise

About Zaxby’s

Zaxby’s is a popular network of fast food restaurants serving casual meals, primarily throughout the Southern United States.

The restaurant’s slogan is “Real Chicken,” and their most popular meals include chicken. In addition to chicken, the menu also offers french fries, sandwiches, and salads called “zalads.”

Zaxby’s is well known for its assortment of ten dipping sauces. Some mildly spicy options are hot honey mustard, teriyaki, barbecue, and sweet & spicy.

The restaurants are decked up with quirky, entertaining items that each have their special meaning and reflect the local culture.


History Of Zaxby’s

History Of Zaxby's

Zaxby’s first restaurant opened in 1990 in Statesboro, Georgia, as the brainchild of childhood buddies Zach McLeroy and Tony Townley.

Inspired by the likes of Guthrie’s, they named their restaurant ‘Zax,’ fueled by a dream of exceptional chicken and the signature Zax sauce, financed by a scraped-together sum of $16,000 for the store’s mortgage.

In 1994, Zaxby’s started offering franchises, and today, most Zaxby’s restaurants are owned by local businesses that have signed franchise contracts with Zaxby’s.

The growth of Zaxby’s is a testament to its appeal. From a handful of locations in Georgia, the chain expanded its presence in the bustling Atlanta market before setting its sights on neighboring states. Now, it proudly boasts more than 925 locations across the US.


Zaxby’s Franchise Model      

Cost Or FeesAmount
Initial Investment$284,000–$664,300
FranchiseYES
Franchise Fee$35,000
Royalty Fee6%
Liquidity$500,000
Estimated Outlets925+

How Much Does It Cost To Open A Zaxby’s Franchise?

Opening a Zaxby’s franchise requires a substantial financial commitment. Firstly, potential franchisees must demonstrate a minimum net worth of $1,000,000.

Prospective franchisees should also have more than $500,000 in liquid assets. 

Initial investment ranges from $284,000 to $664,300, including a $35,000 franchise fee per restaurant.

On top of this, franchisees pay a 6% royalty fee, which is a slice of their gross sales that goes back to Zaxby’s. 


Zaxby’s Overall Revenue

Zaxby’s Overall Revenue

When it comes to revenue, Zaxby’s impresses with an annual tally of $27.1 million.

This impressive figure highlights the brand’s strong presence and continued success in the fast-food industry, promising potential for franchisees.


How much does Zaxby Franchise Owner Make?

Individual Zaxby franchises also showcase strong performance, with each unit generating sales of around $2.49 million annually.

As for profits, a franchise owner can expect to pocket around $337,329 annually in salary, equating to a healthy 15% EBITDA margin. 

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%2248862.00
Rent10.63%(238941.59)
Insurance5.31%(119470.79)
Salaries21.25%(477883.17)
Franchise Royalty Fees5.31%(119470.79)
Utilities2.13%(47788.32)
Cost of Goods Sold (COGS)26.56%(597353.97)
Labor (Variable)13.81%(310624.06)
Total (Expenses)85.00%(1911532.70)
Net Profit15.00%337329.30

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.


Is Zaxby Profitable?

Zaxby’s franchise is considered profitable. The company’s annual sales have been impressive and have shown consistent growth. This growth directly contributes to generating profit. The profit margin is approximately 15%, which is a decent ratio indicating higher profitability.


Payback Period

Based on the 2020 average gross revenues for Zaxby’s franchise of $2,248,862. With a midpoint investment of $534,750 and an estimated 15% profit on the average net sales from 2020, the yearly profit would be $337,329.

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

Payback Period = Investment / Yearly Profit = $534,750 / $337,329= 1.58 years

Based on these figures, it will take approximately 2 years to pay back the initial investment for Zaxby’s. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Zaxby’s Failure Rate

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2018736757+21
2019757756+1
2020756762+6

For the Franchised outlets:

  • In 2018, the growth rate was (21)/736×100≈2.85%
  • In 2019, the growth rate was (1)/757×100≈0.13%
  • In 2020, the growth rate was (6)/756×100≈0.79%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20181411410
2019141149+8
2020149146-3

For the Company-Owned outlets:

  • In 2018, the failure rate was (0)/141×100≈0.00%
  • In 2019, the growth rate was (8)/141×100≈5.67%
  • In 2020, the failure rate was (3)/149×100≈2.01%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2018877898+21
2019898905+6
2020905908+3

For Total outlets:

  • In 2018, the growth rate was (21)/877×100≈2.39%
  • In 2019, the growth rate was (6)/898×100≈0.66%
  • In 2020, the growth rate was (1)/905×100≈0.33%

According to the above-mentioned data, we can see that the franchised outlets for Zaxby’s grew from 2018 to 2020, showing a growth rate between 2.85% and 0.79%.

On the other hand, for company-owned outlets, the failure rate of Zaxby’s was between 0.00% and 2.01% in 2018 and 2020. In 2019, the company experienced growth, showing a growth rate of 5.67%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Zaxby’s franchise has expanded in the years 2018-2020 showing a total growth rate between 2.39% and 0.33%.


Zaxby’s Franchise Requirements

The path to opening a Zaxby’s franchise goes beyond the financial commitments discussed earlier. To start, potential franchisees must have a net worth of at least $1,000,000 and liquid assets surpassing the $500,000 mark. 

Zaxby’s also considers character and legal standing. Aspiring franchisees must pass background checks that attest to reasonable creditworthiness, minimal history of litigation, no criminal convictions, and a satisfactory motor vehicle report. 

Finally, franchisees must be ready to personally guarantee any obligations required under the license agreement, make a commitment within 60 to 90 days of signing the license agreement, and truly believe in the importance of guest service. 


Zaxby’s Franchise Training And Support

Zaxby’s Franchise Training And Support

Zaxby’s ensures that its franchisees are well-prepared to operate their new business.

The initial training program is provided for the franchise’s Designated Principal, Key Operator, and three Certified Managers.


The training program consists of three phases:

Phase One covers restaurant basics with 9 hours of classroom learning and 180 hours on the job.

Phase Two moves to core management training, involving 3 hours in the classroom and 120 hours on the job.

The final phase, focused on culture and leadership fundamentals, requires 12.5 hours of classroom time. This phase is reserved for the Designated Principal and Key Operator only.

Zaxby’s also offers ongoing assistance, ensuring you are never alone on your franchise journey.


Zaxby’s Franchise Terms Of Agreement & Renewal

Franchise agreements typically last for ten years after the restaurant’s grand opening. Franchisees may renew for a further 10-year term, subject to the franchisor’s criteria. 


Zaxby’s Franchise Obligations And Restrictions

The franchisee manages, promotes, and operates the restaurant to the highest possible standards.

The appointed principal is responsible for making all restaurant-related business decisions and is authorized to obligate the franchisee regarding all contractual matters with the franchisor. 

Products and services provided to consumers in the restaurant must be authorized in writing by the franchisor.

Franchisees must furthermore offer precisely the services and products specified by the franchisor in the guide or other written documentation. 


Zaxby’s Franchise Financial Assistance

The franchisor provides neither upfront nor ongoing financing; no lease or other commitments are guaranteed.

However, Zaxby’s does provide its franchisees with additional resources, including training, menu development, development assistance, and marketing.


Zaxby’s Comparison

CompanyZaxby’sFreddy’s
Year Founded19902002
Franchise Fee$35,000$30,000
Initial Investment$284,000–$664,300$794,254–$2,523,239
Number of Outlets925+470+

Conclusion

Since its inception, Zaxby’s has been renowned for having the ideal balance of fantastic cuisine, a welcoming atmosphere, and friendly staff members. As it turns out, the same factors also affect client loyalty. 

So, Zaxby’s is a fantastic choice if you want to open a franchise. Zaxby’s is a reputable brand that could benefit its franchisees due to its modest franchise fee and dedication to customer service.


FAQs

Does Zaxby’s Offer Franchising?

Yes, Zaxby’s offers franchising opportunities and has been doing so since 1994.

Who Founded Zaxby’s?

Two old friends, Zach McLeroy and Tony Townley, opened the first Zaxby’s in Statesboro, Georgia.

How Many Zaxby’s Locations Are There?

There are currently over 925 Zaxby locations across the US.

Is Opening A Zaxby’s Franchise A Good Investment?

Yes. Zaxby’s is an excellent investment for those considering opening a franchise in the food and beverage industry.

Who owns Zaxby’s?

Goldman Sachs Merchant Banking Division owns Zaxby’s. The company bought Zaxby’s for $2 billion in November 2020.

Where is Zaxby’s headquartered?

The headquarters of Zaxby’s is located in Athens, Georgia, U.S.

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