Captain D’s Franchise Costs $1.1M (+2023 Profit Stats)
This article was updated with the 2023 Franchise Disclosure Document
One of the very few seafood franchises, Captain D’s is also one of the most popular: since they started to franchise in 1969 they have expanded to 540 restaurants across the US today.
With a relatively low competition and such a strong brand name, investing in a Captain D’s franchise seems like a good idea. But before you go ahead, make sure to understand the financials.
Don’t worry: we did the work for you in this article. With an average annual turnover of $1,029,000, it may seem like it’s worth investing the initial required investment of $1,132,000. Want to know more? Let’s dive in!
Key stats
| Franchise fee | $35,000 |
| Royalty fee | 4.50% |
| Marketing fee | 4.00% |
| Investment (mid-point) | $1,132,000 |
| Average sales | $1,029,000 |
| Sales to investment ratio | 309.0x |
| Minimum net worth | $1,000,000 |
| Minimum liquid capital | $350,000 |
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 | Captain D’s |
| FRANCHISE FEE | $35,000 |
| ROYALTY FEE | 4.50% |
| INITIAL INVESTMENT | $899,000 – $1,354,000 |
| AVERAGE REVENUE | $1,029,000 |
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About Captain D’s
Captain D’s is an American fast-food chain owned by private equity firm Sentinel Capital Partners, headquartered in Nashville, Tennessee.
The chain was founded on August 15, 1969, in Donelson, Tennessee, by Raymond L. Danner Sr. It began as Mr. D’s Seafood and Hamburgers and changed into Captain D’s in 1974.
It specializes in seafood and serves fried fish, shrimp, lobster, crab, and chicken meals, platters, and sandwiches. Captain D’s began franchising in 1969 and has over 540 restaurants in the US.
Captain D’s franchise pros and cons
Pros
- Pre-opening training: The franchisor offers franchisees comprehensive training on the business concept, products, operations, customer service, and staff management. It also trains the franchisees to carry out a successful grand opening and provides ongoing online training for staff to run their restaurants smoothly.
- Real estate support: With an experienced real estate team, the brand offers franchisees expert real estate assistance whether building from scratch or converting an existing restaurant. Franchisees get expert advice on viable business locations, site selection, restaurant plans and approval, construction, and branding.
- Multiple franchise options: The brand combines market-smart prototypes with its conversion efficiency, making restaurant development easy. It offers franchisees the drive-through and carryout-only format or the dine-in and drive-thru options to deliver sales-to-investment ratios.
- Streamlined supply chain: The brand has a central supply chain. Franchisees can order supplies and inventory online and from a universal supply chain controlled by the franchisor. This guarantees the franchisees consistent, high-quality, and affordable seafood products that add value to their restaurants and customers.
- Corporate and management support: The brand offers solid and continuous support to its franchisees to establish and operate their restaurants successfully. Also, franchisees get constant guidance from qualified brand managers and successful industry leaders. This is in form of meetings and conventions, safety and security procedures, seminars, and field operations.
- Passive investment: The franchise allows for absentee ownership. Franchisees can run their restaurant alongside other investment ventures.
Cons
- No exclusive territory protection: The franchisor does not grant the franchisees an exclusive territory to operate in. Franchisees can face competition from franchises granted by the parent company or from competitive channels it controls.
- No franchise financing: The brand does not offer direct or indirect financing to franchisees. Also, it does not guarantee any lease, note, or grant for any lender.
Captain D’s franchise costs
To open a Captain D’s franchise you would pay around $1,132,000 as the initial required investment, including an initial franchise fee of $35,000.
As the investment amount is an average, it may vary depending on the type of restaurant you choose. Indeed Captain D’s offers different types of restaurants as a franchise:
- 44-seat Prototype ($1,159,500 – $1,354,200)
- 22-seat Prototype ($1,037,300 – $1,252,270)
- Express Prototype ($898,600 – $1,091,700)
How does the payment help you to open a new restaurant? Well, the initial investment helps you as a kick-start for your new business. This means the investment amount covers all types of startup costs needed to begin a restaurant.
Indeed, in addition to the $35,000 initial franchise fee you would also pay for:
- Formation costs: real estate, building, leasehold improvements, training expenses, equipment, computer systems, etc.
- Pre-opening costs: incorporation fees, legal fees, business license fees, utility deposits, etc.
- Operating costs: inventory, insurance, and working capital for the first 3 months.
| Type of Expenditure | Low | High |
|---|---|---|
| Initial Franchise Fee | $35,000 | $35,000 |
| Formation Costs | $838,900 | $940,790 |
| Pre-Opening Costs | $5,000 | $9,000 |
| Operating Costs | $57,000 | $123,000 |
| Total | $935,900 | $1,107,790 |
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| Captain D’s |
| FRANCHISE FEE | $35,000 |
| ROYALTY FEE | 4.50% |
| INITIAL INVESTMENT | $899,000 – $1,354,000 |
| AVERAGE REVENUE | $1,029,000 |
Captain D’s franchise fees
The initial franchise fee for a Captain D’s franchise is $35,000. In addition to the initial franchise fee, you must pay to the franchisor a royalty fee of 4.50% of revenues.
Captain D’s franchise revenue
On average, a Captain D’s franchise makes $1,029,000 in sales per year (the Average Unit Volume).
The sales number is the annual median sales of all franchised restaurants operating in 2022, which is 6% less compared to 2021 AUV (-6% revenue growth vs 2021).
Captain D’s franchise profits
As per the 2023 FDD, a Captain D’s franchise makes $170,253 in profits per year. This represents a 16.5% EBITDAR margin (before rent expenses).
Luckily, Captain D’s provides detailed information on the cost structure of its company-owned restaurants, to which it adjusts for royalty fees. So this comes straight from the FDD.
If we had to estimate EBITDA instead, we would estimate it at about 12-16% of sales.
| Profit and loss | Amount | % Sales |
|---|---|---|
| Sales | $1,029,340 | 100% |
| Food & packaging | $(360,887) | 35.06% |
| Labor & benefits | $(272,363) | 26.46% |
| Operating expenses | $(163,768) | 15.91% |
| Advertising | $(15,749) | 1.53% |
| EBITDAR | $216,573 | 21.04% |
| Royalty | $(46,320) | 4.50% |
| Adjusted EBITDAR | $170,253 | 16.54% |
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| Captain D’s |
| FRANCHISE FEE | $35,000 |
| ROYALTY FEE | 4.50% |
| INITIAL INVESTMENT | $899,000 – $1,354,000 |
| AVERAGE REVENUE | $1,029,000 |
Disclaimer
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