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Johnny Rockets Franchise Costs $507K – $1.7M (+ 2024 Profits)

Johnny Rockets, an iconic hamburger restaurant franchise known for its high-quality, innovative menu items, was founded in 1986 on the bustling Melrose Avenue in Los Angeles, California. With a mission to transform meals into unforgettable experiences, Johnny Rockets creates a retro-inspired atmosphere that harks back to the classic American diners of the 1950s. 

The brand’s menu features made-to-order Certified Angus Beef® hamburgers, veggie burgers, chicken sandwiches, crispy fries, and rich, hand-spun shakes and malts, served in an upbeat setting that celebrates the joy of simply good times. Headquartered in Aliso Viejo, California, the franchise started its franchising journey in 1987.

The namesake “Johnny Rockets” combines all things Americana: “Johnny” after the iconic Johnny Appleseed, and “Rocket” for the classic Oldsmobile Rocket 88, reflecting the brand’s deep-rooted American charm and retro appeal. From the beginning, Johnny Rockets incorporated vintage jukebox tunes and service with a smile, quickly becoming a hit with crowds flocking to the original Melrose location. 

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Initial investment

Type of ExpenditureAmount
Initial Fee$50,000
Leasehold Improvements; Construction Costs$150,000 – $600,000
Equipment, Decor & Furnishings$160,000 – $600,000
Signage$10,000 – $100,000
Point of Sale Systems (POS) and related technology$14,638 – $20,988
Restaurant Small Wares$10,800 – $25,000
Initial Inventory$7,200 – $10,400
Security Deposits (Utilities, Insurance, etc.)$9,000 – $32,500
Insurance and Bonds$8,000 – $12,000
Rent$3,500 – $20,000
Miscellaneous (legal, accounting, licenses, permits)$14,000 – $25,000
Liquor Licenses and Fees$5,000 – $75,000
Grand Opening & Marketing Materials$7,500 – $10,000
Training$32,500 – $65,000
Additional Funds – three months$25,000 – $40,000
Total$507,000 – $1,686,000

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 fee ranges from $0 to $50,000, with a standard amount being $50,000.

Royalty Fee

The royalty fee is 6% of total net sales, due on the 2nd Tuesday after each Weekly Accounting Period. Interest on overdue amounts is 1.5% per month, with a late fee of $25 per week.

Advertising Fee (Marketing Fund)

Currently 2% of total net sales, with the franchisee’s required weekly contribution potentially increasing to 4% of Net Sales. This fee is due on the 2nd Tuesday after each Weekly Accounting Period.

Local Advertising

This is 2% of net sales during each of the periods January 1 through June 30 and July 1 through December 31 of each year. A report evidencing expenditure is due no later than 30 days after the end of each period for the preceding 6-month period.

Additional Training

Franchisees must reimburse the franchisor for costs of training, up to a maximum of $1,500 per week for each individual. This is payable Tuesday following each week after the first week.

Brand Technology System Support Services

The annual fee for mandatory services ranges from $840 to $1,500, with up to $3,250 per year for optional services. The payment schedule varies based on the invoice amount.

Transfer Fee

The transfer fee is $15,000, payable when the franchisee submits a transfer request to the franchisor.

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Franchise Pros and cons

The Pros:

  • Marketing and advertising support: Johnny Rockets provides its franchisees with a dedicated marketing strategy. Franchisees benefit from a well-established infrastructure and public relations resources to create awareness about their products and effectively publicize their local store locations.
  • Construction and equipment: Franchisees get assistance with the site selection, design, and layout of their restaurants. Also, the brand helps franchisees with the equipment needed for constructing the restaurants as well as connecting them to approved contractors and vendors.
  • Quality Training: The brand provides its franchisees with comprehensive training about the brand’s business concept. Its detailed curriculum trains franchisees about restaurant operations, restaurant management, safety and health, local store marketing, site selection, and planning for a successful grand opening.
  • Exclusive territory: The franchisor allows its franchisee an exclusive development market to develop and grow. It does not authorize other franchises or operate competitive channels in the protected area.
  • Flexible development formats: The brand provides franchisees with a variety of franchise formats to choose from. These are Johnny Rockets 2.0, Johnny Rockets Express, and Johnny Rockets Drive-thru. Also, it features take-out, dine-in, and drive-thru options, which provide excellent customer service and additional revenue streams.

The Cons:

  • No financing: The franchisor does not directly or indirectly provide franchisee financing for startup costs, equipment, inventory, payroll, and trade fixtures.
  • No absentee ownership: The franchisee does not present a passive investment opportunity. The franchisor requires franchisees to take active roles in the day-to-day operations of their businesses.
  • Not a mobile business opportunity: The franchise can’t be run from home or a mobile unit. Franchisees need to have an office facility. 

How to open a Johnny rockets franchise

1. Research Franchise Information

  • Explore the Johnny Rockets franchise opportunity on their official website or franchise portals to understand the brand, its history, and its unique selling proposition.

2. Initial Application

  • Submit an initial franchise application with Johnny Rockets, providing your personal and professional background information.

3. Attend Discovery Day

  • Participate in a Discovery Day at Johnny Rockets’ headquarters or a designated location to meet the franchising team, understand the business model, and ask questions.

4. Review Franchise Disclosure Document (FDD)

  • Carefully review the FDD provided by Johnny Rockets, which includes detailed information about the franchise costs, fees, obligations, and performance expectations.

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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