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 fee | 6.00% |
| Marketing fee | 3% to 4% |
| Investment (mid-point) | $453,000 |
| Average sales | $845,000 |
| Sales to investment ratio | 60.0x |
| Minimum net worth | $500,000 |
| Minimum liquid capital | $100,000 |
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 | Charleys Philly Steaks |
| FRANCHISE FEE | $24,500 |
| ROYALTY FEE | 6.00% |
| INITIAL INVESTMENT | $200,000 – $907,000 |
| AVERAGE REVENUE | $845,000 |
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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 format | Low | Average | High |
|---|---|---|---|
| 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 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 Expenditure | Low | High |
|---|---|---|
| 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 |
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| Charleys Philly Steaks |
| FRANCHISE FEE | $24,500 |
| ROYALTY FEE | 6.00% |
| INITIAL INVESTMENT | $200,000 – $907,000 |
| AVERAGE REVENUE | $845,000 |
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.
| Location | Number of restaurants | Median sales |
|---|---|---|
| Military Bases | 75 | $549,366 |
| Airport | 3 | $877,651 |
| Mall Food Court | 336 | $912,955 |
| Strip Center | 85 | $876,886 |
| Walmart | 20 | $821,902 |
| All locations | 519 | $845,105 |
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| Charleys Philly Steaks |
| FRANCHISE FEE | $24,500 |
| ROYALTY FEE | 6.00% |
| INITIAL INVESTMENT | $200,000 – $907,000 |
| AVERAGE REVENUE | $845,000 |
Disclaimer
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