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Charley’s Philly Steaks Franchise Costs $453K (2023 Profit Stats)

This article was updated with the 2023 Franchise Disclosure Document

A popular cheesesteak restaurant franchise, Charley’s Philly Steaks has grown and now has over 700 location in 17 countries worldwide. Charley’s Philly Steaks is also quite popular among franchisees.

Indeed, you would need to invest $453,000 on average. In comparison, the average Charley’s Philly Steaks franchise makes $845,000 in sales per year.

In this article, we’re looking at Charley’s Philly Steaks and the information provided in its Franchise Disclosure Document. More importantly, we’ll see how much you can really make with this business, and whether you should own a Charley’s Philly Steaks franchise. Let’s dive in!

Key stats

Franchise fee$24,500
Royalty fee6.00%
Marketing fee3% to 4%
Investment (mid-point)$453,000
Average sales$845,000
Sales to investment ratio60.0x
Minimum net worth$500,000
Minimum liquid capital$100,000
Source: 2023 Franchise Disclosure Document

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Charleys Philly Steaks

What is Charley’s Philly Steaks?

Charleys Philly Steaks, formerly Charley’s Grilled Subs and Charley’s Steaks, is an American restaurant chain headquartered in Columbus, Ohio. 

The brand’s story began in 1985, at Ohio State University, as a simple 450-square-foot restaurant satisfying the college students’ appetite for made-to-order cheesesteaks, lemonade, and gourmet fries.

Charley Shin founded the restaurant chain after tasting the Philly cheesesteak for the first time and falling in love with it. 

The chain is famous for its tasty cheesesteaks, soft drinks, fruit lemonades, and French fries. In addition, select stores serve frozen shakes, fried appetizers, and boneless wings. 

Charley Philly Steaks began its franchising operations in 1991, long before it became a subsidiary of Gosh Enterprises, another Shin-owned company. Currently, the chain has 700 locations spread across 46 US states and in 17 other countries around the world.

Charley’s Philly Steaks franchise: pros and cons

Pros

  • Reduced rent costs: Charleys Philly Steaks stands out because of its small footprint. New restaurants require limited space, reducing rental costs. 
  • Growth opportunities: the franchisor offers room for expansion in several markets. There’s always an opportunity to start a thriving franchise in airports, strip centers, army bases, and retail shopping centers. 
  • Comprehensive training: the initial training session runs for 3 weeks. This includes food safety, cost control, inventory control, basic management techniques, and food preparation. In total, franchisees must complete 90 hours of on-the-job training and 60 hours of classroom learning as part of the Franchise Agreement.  
  • A standout menu: Charleys Philly Steaks has a unique menu that revolves around the cheesesteak. This stands out in a niche dominated by the chicken, burger, and pizza trio 
  • Third-party financing: Charleys Philly Steaks partners with the relevant third-party sources to cover the startup costs, franchise fees, cost of equipment, receivables, accounts, and inventory. 
  • Marketing support: the franchisor provides a wealth of marketing and promotional tools to support new restaurant owners. It helps with market planning and support, SEO, creating ad templates, regional advertising, email marketing, social media management, and website development. 
  • Ongoing support: the brand’s continued support makes it easier for franchisees to operate their businesses. It includes newsletters, field operations, proprietary software, lease negotiation, and site selection. 

Cons

  • No exclusive territory: the Franchise Agreement does not include exclusive territorial control. Franchisees must be ready to compete with similar businesses within the selected location. 
  • No absentee ownership: to open a Charley Philly Steaks franchise, you must get involved in the day-to-day operations. 
  • Minimum of 20 employees: the franchisor has a mandatory employee requirement to start and operate the business. 
  • Franchisees can’t operate from home: to run a full-service Charleys Philly Steaks franchise, you must have an office or retail facility. 
  • Can’t be run part-time: new restaurant owners can only run their franchises full-time, long-term.

Charley’s Philly Steaks franchise costs

You would invest around $453,000 to open a Charley’s Philly Steaks restaurant.

This number is an average. Indeed, it changes based on the type of restaurant you go for. For example, you need to invest more for a freestanding location vs. a Walmart restaurant.

Restaurant formatLowAverageHigh
CPS* restaurants$199,967$421,301$642,634
CPSW** restaurants$216,507$561,760$907,012
Walmart location$218,758$376,160$533,561
All restaurants$453,073
* operating in mall food courts, airports, military bases, and inline locations
** operating in inline and freestanding locations
Source: 2023 Franchise Disclosure Document

Including the initial franchise fee of $24,500, you would need to pay for building costs, leasehold improvements, working capital for the first 3 months of operation, etc. Here’s the full breakdown:

Type of ExpenditureLowHigh
Initial Franchise Fee$24,500$24,500
Leasehold Improvements$50,000$329,000
Equipment/Furniture/Fixtures$50,931$125,000
POS System$12,536$18,134
Real Estate Lease$12,500$50,000
Grand Opening Marketing Package$7,000$10,000
Additional Funds$20,000$30,000
Other Expenses$22,500$56,000
Total$199,967$642,634
Source: 2023 Franchise Disclosure Document

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Charleys Philly Steaks

Charley’s Philly Steaks franchise fees

The initial franchise fee for a Charleys Philly Steaks franchise is $24,500. In addition to the initial franchise fee, you must pay to the franchisor a royalty fee of 6.00% of revenues.

Charley’s Philly Steaks franchise revenue

On average, a Charleys Philly Steaks franchise generates $845,000 turnover per year.

This number is the annual median sales for all 519 restaurants operating in 2022. As such, it includes all types of locations: military bases, airports, strip centers, Walmart, etc. See the full breakdown below.

LocationNumber of restaurantsMedian sales
Military Bases75$549,366
Airport3$877,651
Mall Food Court336$912,955
Strip Center85$876,886
Walmart20$821,902
All locations519$845,105
Source: 2023 Franchise Disclosure Document

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Charleys Philly Steaks

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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