Product category



Famous Dave’s Franchise Costs $70K – $6.1M (+ 2024 Profits)

Famous Dave’s, a well-known barbecue restaurant chain, was founded by Dave Anderson in Hayward, Wisconsin, in 1994. The franchise began its expansion in 1998 and has grown to be recognized as a significant player in the American barbecue scene. The headquarters of Famous Dave’s is located in Minnetonka, Minnesota.

The brand is celebrated for its rich variety of BBQ meats and scratch-made sides, which are served in a family-friendly, casual dining atmosphere. Famous Dave’s stands out in the crowded barbecue market not only for its award-winning recipes but also for its operational flexibility.

The franchise offers several business models, including full-service dining, quick-service restaurants (QSR), and ghost kitchens, providing multiple revenue streams through dine-in, take-out, catering, and third-party delivery services. This adaptability allows franchise owners to customize their operations based on their market and location needs.

a financial plan for a franchise
a financial plan for a franchise

Initial investment

Type of ExpenditureAmount (for a Full Service restaurant)
Initial Fee$45,000
Leasehold Improvements$475,000 – $1,600,000
Land, Building and Construction$2,410,000 – $3,200,000
Travel and Living Expenses for You and Your Management Staff During Training$25,000 – $40,000
Reimbursement of Expenses for Opening Team$55,000 – $100,000
Furniture, Fixtures, Décor, and Equipment$500,000 – $650,000
Architectural and Engineering Fees$50,000 – $170,000
Signs$45,000 – $75,000
Liquor License Costs$25,000 – $75,000
Site Model Report Fee$750
Restaurant Lease Payments – 3 Months$10,500 – $25,000
Employee Salaries – 3 Months$60,000 – $95,000
Miscellaneous$5,000 – $10,000
Grand Opening Celebration$15,000 – $25,000
Additional Funds – 3 Months$5,000 – $10,000
Total if premises leased by you$1,316,250 – $2,920,750
Total if premises purchased by you$3,726,250 – $6,120,750

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

The Initial Franchise Fee for Famous Dave’s is $45,000, paid non-refundable at the time the franchise agreement is signed.

Royalty Fee

Franchisees will pay a Royalty Fee of 5% of the revenues received, payable weekly based on the revenues of the previous week.

Marketing/Advertising Fee

Marketing Fund Fees are set at 1% of revenues, also paid weekly along with the Royalty Fees.

revenue

Revenue & Profits

a financial plan for a franchise
a financial plan for a franchise

Franchise pros and cons

The Pros:

  • Comprehensive training: The brand offers its franchisees quality training to master the business concept, restaurant operation, and successful grand opening. Its initial training is offered by certified locations approved by the franchisor and consists of 75 classroom hours and 280 on-site hours.
  • Real estate and construction: The franchisor provides its franchisees with expert real estate support in building their restaurants. It helps them with site selection, lease negotiations, and a construction director who acts as a seamless bridge between the real estate and construction phases.
  • Ongoing operational support: The brand supports its franchisees in all their development stages after launching their restaurants. It offers them frequent visits by field operational managers, professional consultations, comprehensive digital and marketing solutions, and robust third-party analytics reporting.
  • Multiple income streams: A Famous Dave’s franchise provides its franchisees with additional income streams. These include dine-in and takeout, third-party deliveries, and catering. Franchisees have multiple ways to offer great customer service and stand out from the competition.
  • Third-party financing: The brand refers qualified franchisees to third-party financing sources for the franchise fee, startup costs, equipment, and inventory.
  • Marketing support: Famous Dave’s has a dedicated in-house marketing team to help its franchisees create local store awareness and build customer loyalty. It offers its franchisees targeted promotional tools and advertising resources such as national media, regional advertising, social media, website development, email marketing, and loyalty programs.
  • Flexible franchise models: The brand provides its franchisee with multiple franchise options to choose from. These include full-service, ghost, or cloud kitchen models and three scalable QSR business models: flex service, line service, and counter service. Franchisees can offer their guests an excellent dining experience and succeed in any market location.

The Cons:

  • No exclusive territory protection: The brand does not grant its franchisees an exclusive development market. Franchisees may face competition from franchises granted by the franchisor or from competitive channels and brands it controls.
  • No absentee ownership: The franchise is not a passive business opportunity. Franchisees must be actively involved in the operations of their restaurants.
  • Not a part-time business: The brand requires its franchisees to operate as per the parent brand’s operating hours.
  • Not a home-based business: The franchise cannot be run from home or a mobile unit. Franchisees need fixed office facilities within the restaurants

How to open a Famous Dave’s franchise

1: Explore the Franchise Opportunity

  • Initial Research: Review the Famous Dave’s franchise website and understand the brand, its history, and its offerings.
  • Request Information: Fill out the inquiry form on the franchise website to receive detailed franchise information, including the Franchise Disclosure Document (FDD) which outlines the investment details, fees, and obligations​​.

2: Financial Qualification and Application

  • Financial Requirements: Ensure you meet the financial requirements which may include a minimum net worth and liquid capital.
  • Submit Application: Complete the application process by providing your financial details, business experience, and personal information as required by Famous Dave’s​.

3: Approval Process

  • Interviews and Approval: Participate in interviews and possibly attend a Discovery Day to meet with the franchisor. This process helps both parties assess compatibility and readiness.
  • Franchise Approval: Once approved, you will sign the franchise agreement and pay the initial franchise fee to secure your franchise rights​.

4: Training and Preparation

  • Training Programs: Undergo comprehensive training covering all aspects of running a Famous Dave’s franchise, including operations, customer service, product preparation, and business management.
  • Site Selection and Development: Work with the Famous Dave’s real estate team to identify and secure an appropriate location. Then, begin the build-out of your restaurant according to the brand’s specifications​.

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.

0