Franchise Deep Dive: Schlotzsky's Franchise Costs, Fees, Profit and Data

With backing and support from parent company Focus Brands, Schlotzsky’s appears to be on the brink of aggressive expansion in the not-so-distant future.

REPORTED COST TO GET IN: $568,600 - $1,265,340

REPORTED ROI (Item 19): $891,141 - $1,102,012 (average net sales per quartile)

Brand overview

Schlotzsky's is a fast casual sandwich franchise concept known for its hearty sandwiches served on sourdough. The menu includes a variety of sandwiches, salads, soups and an array of desserts, including Cinnabon products. The brand is situated in the competitive sandwich segment alongside other brands like Jimmy John’s, Jersey Mike’s and Subway.

Schlotzsky’s started as a small sandwich shop in Austin, Texas in 1971. Originally, it only served its most famous sandwich — the Original — and its hours varied based on the availability of muffaletta.

Schlotzsky's has since grown to have 338 locations across 28 states, with most locations in the south and southwestern regions of the country.

Schlotzsky's is a counter-serve quick service chain most well-known for its sandwiches. Their most famous sandwich is The Original, which contains ham, salami, 3 cheeses, a variety of vegetables and a signature sauce on a sourdough bun.

The brand also serves specialty pizzas, salads, soups, chips and dessert options, including Cinnabon cinnamon rolls. The brand offers dine-in, drive-thru, take-out, online ordering and catering options.

Schlotzsky's offers flexible footprints and franchise outlet options including:

• Non-traditional shops (within malls or airports, for example)

• Drive-thru shops

• Traditional, stand alone shops

Sales data

According to Schlotzsky's 2023 Franchise Disclosure Document (FDD), the total average net sales per quartile for 212 franchise locations with a drive-thru was $1,102,012.

The averages for each quartile for the fiscal year of 2022 of locations with a drive-thru are indicated below:

• Top Quartile: $1,638,915

• Second Quartile: $1,184,553

• Third Quartile: $927,011

• Bottom Quartile: $657,569

The total average net sales per quartile for 36 traditional franchises without a drive-thru for the fiscal year of 2022 was $891,141.

The averages for each quartile for the fiscal year of 2022 of locations without a drive-thru are indicated below:

• Top Quartile: $1,569,832

• Second Quartile: $911,551

• Third Quartile: $680,140

• Bottom Quartile: $403,042

The averages listed above do not include non-traditional locations, such as those in airports or shopping malls, franchised locations without a Cinnabon Express included and other co-branded franchised locations.

Franchise costs

The estimated total investment necessary to begin the operation of a Schlotzsky's franchise ranges from $568,600 - $1,265,340.

The costs to begin an operation of a Schlotzsky’s location are indicated below:

• Franchise Fee: $35,500

• Construction and Build Out Costs: $293,050 - $526,500

• Permitting: $1,800 - $11,000

• Equipment Package: $87,750 - $170,820

• Millwork: $40,500 - $53,820

• Furniture: $17,550 - $35,100

• Menu Board, Graphics and Interior Signage: $12,00 - $22,600

• Exterior Signage: $20,400 - $46,800

• Computer System: $26,000 - $60,000

• Smallwares: $6,700 - $7,500

• TV/Music: $2,000 - $3,000

• Architect/Engineer: $5,000 - $50,000

• Rent: $5,000 - $15,600

• Grand Opening Marketing: $15,000 - $25,000

• Legal and Accounting Fees: $3,000 - $12,000

• Insurance: $1,750 - $8,800

• Misc. Opening Costs and Office Supplies: $1,750 - $8,800

• Security Deposits: $7,000 - $10,000

• Training Fees: $0 - $5,200

• Travel and Living Expenses During Training: $10,000 - $40,000

• Opening Inventory: $7,500 - $25,000

• Cinnabon Express Bakery Initial Franchise Fee: $8,000

• Cinnabon Express Bakery: $23,600 - $40,100

• Additional Funds (Up to 3 Months): $39,000 - $48,000

Schlotzsky’s also requires potential franchisees to have a net worth of $1,000,000 and $300,000 minimum in liquid capital.

Schlotzsky's requires a franchise fee of $35,500.

As a limited time incentive, Schlotzsky’s is offering a franchise fee of $10,000 up until December 20, 2023.

The brand also provides a discounted franchise fee of $20,000 to qualifying veterans or members of the Armed Forces.

• William Armstrong - Chief Brand Officer

• Jim Holthouser - Chief Executive Officer for Focus Brands

• Guillermo Cremer — Chief People Officer

• Mike Dixon — Chief Financial Officer

• Second-Generation Schlotzsky’s ‘Zee Opens Brand’s First New Prototype

• Schlotzsky's® Accelerates Franchise Development with Pipeline Nearing 100 Restaurants

• Schlotzsky’s Opening in Mission, Texas, on June 30

• How to Start a Schlotzsky's Franchise in 2022

• Schlotzsky's Rolls Out Style and Menu Changes

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