Great American Cookies Franchise Costs (+2023 AUV & Profits)

One of the most popular cookie franchise alongside Crumbl Cookies or even the giant donut chains like Dunkin’ or Krispy Kreme, Great American Cookies has grown over the years and has over 300 stores in the US today.

It’s also a profitable business: you would need to invest $297,000 to buy the franchise yet you would make on average $453,000 in sales per year.

What does it mean when it comes to profits? How much profits can you really make with a Great American Cookies franchise? Is this worth investing the initial $297,000?

In this article we’ll answer all these questions by looking at Great American Cookies’ latest Franchise Disclosure Documents. Let’s dive in!

Key stats

Franchise fee$25,000
Royalty fee6.0%
Marketing fee4.0%
Investment (mid-point)$306,000
Average sales$525,000
Sales to investment ratio0.5x
Payback period[franchise_value_investment_payback]
Minimum net worth$250,000
Minimum liquid capital$100,000
Source: Franchise Disclosure Document 2022

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About Great American Cookies

Great American Cookies is an American chain of independently owned franchise stores that specialize in gourmet cookies and cookie cakes.

Headquartered in Atlanta, Georgia, the chain was founded in 1977 by Michael J. Coles and Arthur Karp.

It offers freshly baked cookies, cookie cakes, double doozies, and brownies.

The brand began franchising in 1978, and now it has over 300 bakeries in the US.

It is owned by FAT Brands along with Round Table Pizza, Hot Dog on a Stick, Marble Slab Creamery, and Pretzel Maker.

Great American Cookies franchise pros and cons

Pros

  • Training and support: The brand has an extensive training program to help new franchisees learn how to establish and run a successful bakery. It trains them how to make their signature cookies, handle inventory, serve customers, operate the bakery, and manage the staff. The program comprises 32 hours of on-the-job and 6 hours of classroom training.
  • Real estate and construction: Great American Cookies offers franchisees expert advice on how to identify a viable business location and guidance on how to construct, design, and brand their bakeries. In addition, the real estate team helps franchisees with lease agreements and negotiations.
  • Operations and management support: The franchisor helps the franchisees during their grand opening to ensure that they have all the resources required to succeed in the business. Additionally, they offer them ongoing support, including security and safety procedures, meetings and conventions, inventory acquisitions, field operations, and research and development.
  • Exclusive territory: The brand offers franchisees exclusive territory protection to operate their bakeries, which gives them the potential to grow and expand. As long as the agreement is in place, the brand does not grant any other franchisees or operate any competing channel in the protected area.
  • Unique menu: The brand started with a generational family recipe and continues to experiment and create new products unique to its customers. It now offers customers quality and various customized cookie cakes that cater to everyone’s taste

Cons

  • No absentee ownership: The Great American Cookie franchise is not a passive investment opportunity. It requires franchisees to fully take part in the decision-making and operations of their bakeries.
  • Not a part-time business: The franchise is also not a part-time opportunity. Franchisees must be open full-time as per the franchisor’s set operating hours.
  • Not a mobile unit: The bakery can’t be run from home or a mobile facility. Franchisees must have an office facility in or near the bakery.
  • No financing: The brand does not directly or indirectly finance franchisees for trade fixtures or ongoing costs. 

Great American Cookies franchises: investment costs

You would have to invest on average $297,000 to open a new Great American Cookies franchise restaurant. 

Note that this is the investment required to open a “Traditional store”. ​​Indeed, the vast majority of restaurants are Traditional store (214 out of the 377 total franchised-owned restaurants).

To clarify, there are 2 main kinds of formats of restaurants you can choose: the traditional store and the GAC – MSC Co-brand store which is a combination of a Great American Cookies (GAC) and a Marble Slab Creamery (MSC) store.

Note that you can also choose to open a Satellite store though which would require to invest less ($95,250 to $193,144) yet would generate less turnover.

Here’s the full breakdown of costs both for the traditional and co-brand restaurant formats:

Traditional store

Type of ExpenditureAmount
Franchise fee$25,000
Furniture, fixtures and equipment$115,000 – $185,000
Leasehold improvements$115,000 – $165,000
Professional fees$1,000 – $6,000
Additional Funds 3 Months$8,000 – $12,000
Other$37,400 – $76,150
Total$301,400 – $469,150
Source: 2022 Franchise Disclosure Document

Co-brand

Type of ExpenditureAmount
Franchise fee$35,000
Furniture, fixtures and equipment$115,000 – $205,000
Leasehold improvements$145,000 – $182,000
Professional fees$2,000 – $6,000
Additional Funds 3 Months$5,000 – $10,000
Other$87,085 – $75,135
Total$389,085 – $513,135
Source: 2022 Franchise Disclosure Document

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Great American Cookies franchise AUV

On average, a Great American Cookies franchise makes $439,000 in sales per year (the Average Unit Volume).

This number is the weighted average median annual sales of traditional restaurants ($452,771, 214 units) and co-brand restaurants ($410,687, 102 units).

Points scored

How profitable are Great American Cookies franchises?

We estimate that, on average, a Great American Cookies franchise makes $61,000 in profits per year. This corresponds to a 13% EBITDA margin. 

Note that we have considered here the average profit margin of the traditional store only.

We calculated this number using the information available in the Franchise Disclosure Document 2021. Fortunately, Great American Cookies provides detailed information on the cost structure and profit margins of its franchised-owned stores.

Profit and lossAmount% Sales
Sales$452,771100%
COGS$(115,411)25%
Gross Profit$337,36075%
Labor$(136,058)30%
Marketing and royalty costs$(45,277)10%
Occupancy$(40,749)9%
Other OpEx$(54,333)12%
EBITDA$60,94313%
Source: Franchise Disclosure Document 2022

Is a Great American Cookies franchise a good investment?

So should you invest in a Great American Cookies franchise? Is this worth the profits? To answer this questions we must look at the payback period: the time it would take you to pay back the initial investment.

We estimate that the payback for a Great American Cookies franchise is 5 years on average, which is great. This means that, you would need to wait (only) 5 years for your investment to pay off, after which you can reap the profits.

Of course, this is an average we estimated based on the performance of the stores disclosed in the latest Franchise Disclosure Document. So your restaurant may turn out to be less or more profitable than the average.

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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.

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