Johnny Rockets: a Profitable Franchise With $969K Turnover
Another popular diner-style franchise next to the likes of Applebee’s, Denny’s or Nathan’s Famous, Johnny Rockets has more than 340 restaurants across the US today.
Should you open a Johnny Rockets franchised restaurant? Before you go ahead, make sure to understand the financials: how much it really costs and how much profits you can realistically make with this business.
In this article we’re looking at the information disclosed in the latest Franchise Disclosure Document to find out whether you should buy a Johnny Rockets franchise. Let’s find out!
Key figures
| Franchise fee | $25,000 |
| Royalty fee | 5.0% |
| Marketing fee | 6.0% |
| Investment (mid-point) | $868,000 |
| Average sales | $969,000 |
| Sales to investment ratio | 1.1x |
| Payback period | [franchise_value_investment_payback] |
| Minimum net worth | $1,500,000 |
| Minimum liquid capital | $500,000 |
Compare Johnny Rockets vs. 1,000+ franchises
Investment, turnover, royalties, profits and more
What is Johnny Rockets?
Johnny Rockets is an American fast-casual restaurant chain with 1950s-inspired decor and fun for diners of all ages. Its main menu includes fresh hamburgers, rocket dogs, fries and tots, classic milkshakes, and malts.
The chain was founded in 1986 by Ronn Teitelbaum, with its first location in Los Angeles, California. The chain began franchising in 1987, and today has more than 340 independent locations in the US and 26 countries around the world.
It is owned and franchised by FAT Brands Inc., headquartered in Wilbraham, Massachusetts, along with Round Table Pizza, Marble Slab Creamery, Great American Cookies and Pretzelmaker.
Pros and cons of Johnny Rockets franchises
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.
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 much should you invest for a Johnny Rockets franchise?
On average, you may need to invest around $867,500 to open a Johnny Rockets restaurant.
The investment amount is an average that may change depending on various factors like location, restaurant size, etc. According to the latest FDD, the amount you would need to invest ranges between $598,000 and $1,137,000.
In addition to the initial franchise fee of $25,000, startup costs include:
- Formation costs: architectural design, leasehold improvements, furniture, fixtures, equipment, interior décor package, signs, POS system, digital menu boards, real estate security deposits, training, liquor license, etc.
- Initial marketing: grand opening advertising fee
- Operating costs: initial inventory, insurance, performance bonds, working capital for first 3 months, etc.
| Expense | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Formation Costs | $515,000 | $1,028,000 |
| Initial Marketing | $10,000 | $10,000 |
| Operating Costs | $48,000 | $74,000 |
| Total | $598,000 | $1,137,000 |
Compare Johnny Rockets vs. 1,000+ franchises
Investment, turnover, royalties, profits and more
What’s the average turnover of a Johnny Rockets restaurant?
On average, a Johnny Rockets franchise makes $874,845 in sales per year.
This sales number represents the annual median sales of 131 franchised restaurants operated in various venues within the US in 2021.
This is an average, indeed it may change depending on factors like your location, market competition, and other demographic or economical factors. For example, you would generate 4 times more turnover if you choose to establish your franchise in a casino vs. a strip center:
| Venue | Number of restaurants | Median sales |
|---|---|---|
| Airport | 5 | $1,328,636 |
| Tourist | 7 | $1,151,003 |
| Casino | 18 | $1,837,941 |
| Theme Park | 25 | $833,168 |
| Downtown | 2 | $917,230 |
| Mall | 31 | $916,003 |
| Lifestyle/Streetfront | 11 | $907,493 |
| Military | 1 | $443,374 |
| Grocery Anchored Center | 1 | $838,436 |
| Outlet | 19 | $1,043,958 |
| Power Center | 3 | $535,016 |
| Strip Center | 8 | $543,376 |
| Total | 131 | $969,071 |
How profitable is a Johnny Rockets franchise?
We estimate that a Johnny Rockets franchised restaurant makes $261,649 in profits per year on average. This represents a 27% profit margin (adjusted EBITDA margin).
The 27% adjusted EBITDA margin is in line compared to similar franchises as per our intelligence (~25-27% industry average).
Note that to calculate this number we had to use benchmarks for COGS (25% sales), labor costs (29%), and rent costs (8%). Indeed, Johnny Rockets doesn’t provide any financial information whatsoever when it comes to costs in its Financial Disclosure Document (FDD).
| Profit-and-loss | Amount ($) | % of sales |
|---|---|---|
| Sales | $969,071 | 100% |
| COGS | $(242,268) | 25.0%* |
| Labor | $(281,031) | 29.0%* |
| Rent | $(77,526) | 8.0%* |
| Royalty + marketing fees | $(106,598) | 11.0% |
| Adjusted EBITDA | $261,649 | ~27% |
Is a Johnny Rockets franchise a good investment?
To answer this question, we need to compare net profits (and not just EBITDA) to the initial required investment. This is what we call the payback period: the time it takes for an investment to be repaid with the profits.
We found Johnny Rockets had a payback period of 6.0 years, which is in line with most restaurant franchises. Therefore we can reasonably say Johnny Rockets is a good investment as you wouldn’t wait more than 6 years to reimburse loans, investors and your own funds before you can finally reap the profits.
Compare Johnny Rockets vs. 1,000+ franchises
Investment, turnover, royalties, profits and more
How does it compare vs. other franchises?
| Franchise | Investment ($) | Sales ($) | Payback (years) | Min. net worth ($) | Min. liquid capital ($) | |||
|---|---|---|---|---|---|---|---|---|
| Chick-Fil-A | https://sharpsheets.io/blog/chick-fil-a-franchise-costs-profits/ | Chicken | 1,363,510 | 4,227,417 | 3.1 | 2.2 | - | - |
| Dunkin' Donuts | https://sharpsheets.io/blog/dunkin-donuts-franchise-costs-profits/ | Donuts | 779,000 | 1,056,521 | 1.4 | 4.9 | 500,000 | 250,000 |
| Domino's | https://sharpsheets.io/blog/dominos-franchise-profits-costs/ | Pizza | 398,725 | 1,286,428 | 3.2 | 3.9 | 250,000 | 75,000 |
| Krispy Kreme | https://sharpsheets.io/blog/krispy-kreme-franchise-costs-profits/ | Donuts | 824,000 | 3,400,000 | 4.1 | 1.6 | 2,000,000 | 300,000 |
| Little Caesars | https://sharpsheets.io/blog/little-caesars-franchise-costs-profits/ | Pizza | 1,022,850 | 798,113 | 0.8 | 8.5 | 350,000 | 150,000 |
| Wingstop | https://sharpsheets.io/blog/wingstop-franchise-costs-profits/ | Chicken | 631,695 | 1,460,459 | 2.3 | 2.9 | 1,200,000 | 600,000 |
| Steak 'n Shake | https://sharpsheets.io/blog/steak-n-shake-franchise-costs-profits/ | Burger, Milshakes | 815,626 | 1,346,332 | 1.7 | 4.0 | 1,500,000 | 500,000 |
| Crumbl Cookies | https://sharpsheets.io/blog/crumbl-cookie-franchise-cost-profits/ | Sweets | 507,224 | 1,582,090 | 3.1 | 2.1 | 300,000 | 150,000 |
| Taco Bell | https://sharpsheets.io/blog/taco-bell-franchise-costs-profits/ | Mexican | 462,413 | 1,650,000 | 3.6 | 1.9 | 1,500,000 | 750,000 |
| Popeyes | https://sharpsheets.io/blog/popeyes-franchise-costs-profits/ | Chicken | 1,095,783 | 1,444,617 | 1.3 | 5.1 | 1,000,000 | 500,000 |
| Smoothie King | https://sharpsheets.io/blog/smoothie-king-franchise-costs-profits/ | Smoothie | 688,108 | 573,269 | 0.8 | 8.0 | 300,000 | 100,000 |
| Jersey Mike's | https://sharpsheets.io/blog/jersey-mikes-franchise-costs-profits/ | Sandwich | 574,323 | 1,220,586 | 2.1 | 4.7 | 300,000 | 100,000 |
| Nothing Bundt Cakes | https://sharpsheets.io/blog/nothing-bundt-cakes-franchise-costs-profits/ | Sweets | 538,650 | 1,307,280 | 2.4 | 2.7 | 600,000 | 150,000 |
| Jimmy John's | https://sharpsheets.io/blog/jimmy-johns-franchise-costs-profits/ | Sandwich | 513,650 | 874,845 | 1.7 | 3.9 | 300,000 | 80,000 |
| Texas Roadhouse | https://sharpsheets.io/blog/texas-roadhouse-franchise-costs-profits/ | Steakhouse | 4,209,500 | 2,955,534 | 0.7 | 9.5 | n.a. | 200,000 |
| Kung Fu Tea | https://sharpsheets.io/blog/kung-fu-tea-franchise-costs-profits/ | Bubble tea | 250,125 | 353,237 | 1.4 | 4.7 | n.a. | 25,000 |
| Wendy’s | https://sharpsheets.io/blog/wendys-franchise-cost-profits/ | Burger | 1,374,833 | 1,791,231 | 1.3 | 5.1 | 1,000,000 | 500,000 |
| Burger King | https://sharpsheets.io/blog/burger-king-franchise-costs-profits/ | Burger | 1,242,950 | 1,215,970 | 1.0 | 6.8 | 1,500,000 | 500,000 |
| Sonic Drive-In | https://sharpsheets.io/blog/sonic-drive-in-franchise-costs-profits/ | Burger | 1,467,083 | 1,617,000 | 1.1 | 6.0 | 1,000,000 | 500,000 |
| Panera Bread | https://sharpsheets.io/blog/panera-bread-franchise-costs-profits/ | Sandwich | 2,290,500 | 2,599,432 | 1.1 | 5.9 | 7,500,000 | 3,000,000 |
| Pizza Hut | https://sharpsheets.io/blog/pizza-hut-franchise-costs-profits/ | Pizza | 935,575 | 906,911 | 1.0 | 6.9 | 700,000 | 350,000 |
| KFC | https://sharpsheets.io/blog/kfc-franchise-costs-profits/ | Chicken | 1,802,050 | 1,567,474 | 0.9 | 7.7 | 1,500,000 | 750,000 |
| Arby’s | https://sharpsheets.io/blog/arbys-franchise-costs-profits/ | Sandwich | 1,184,975 | 1,126,263 | 1.0 | 7.0 | 1,000,000 | 500,000 |
| Dairy Queen | https://sharpsheets.io/blog/dairy-queen-franchise-costs-profits/ | Ice Cream | 1,404,220 | 1,143,180 | 0.8 | 8.2 | 750,000 | 400,000 |
| Jack in the Box | https://sharpsheets.io/blog/jack-in-the-box-franchise-costs-profits/ | Burger | 2,195,800 | 1,755,503 | 0.8 | 12.5 | 1,000,000 | 250,000 |
| Papa John’s | https://sharpsheets.io/blog/papa-johns-franchise-costs-profits/ | Pizza | 353,695 | 1,101,127 | 3.1 | 2.1 | 750,000 | 250,000 |
| Zaxby’s | https://sharpsheets.io/blog/zaxbys-franchise-costs-profits/ | Chicken | 534,750 | 2,229,187 | 4.2 | 2.4 | 1,000,000 | 500,000 |
| Hardee’s | https://sharpsheets.io/blog/hardees-franchise-costs-profits/ | Burger | 1,759,000 | 1,147,975 | 0.7 | 10.2 | 1,000,000 | 300,000 |
| Culver’s | https://sharpsheets.io/blog/culvers-franchise-costs-profits/ | Burger | 4,044,500 | 3,051,762 | 0.8 | 8.8 | 2,000,000 | 350,000 |
| Five Guys | https://sharpsheets.io/blog/five-guys-franchise-costs-profits/ | Burger | 511,225 | 1,203,366 | 2.4 | 2.8 | 500,000 | 250,000 |
| Carl’s Jr. | https://sharpsheets.io/blog/carls-jr-franchise-costs-profits/ | Burger | 1,860,335 | 1,419,516 | 0.8 | 8.7 | 1,000,000 | 500,000 |
| Baskin-Robbins | https://sharpsheets.io/blog/baskin-robbins-franchise-costs-profits/ | Ice Cream | 465,100 | 316,815 | 0.7 | 9.8 | 250,000 | 125,000 |
| IHOP | https://sharpsheets.io/blog/ihop-franchise-costs-profits/ | Pancakes | 2,058,302 | 1,553,311 | 0.8 | 8.8 | 1,500,000 | 500,000 |
| Applebee’s | https://sharpsheets.io/blog/applebees-franchise-costs-profits/ | Casual American | 5,137,966 | 2,356,965 | 0.5 | 14.5 | 1,000,000 | 500,000 |
| Denny's | https://sharpsheets.io/blog/dennys-franchise-costs-profits/ | Casual American | 3,785,459 | 1,639,549 | 0.4 | 15.4 | 1,000,000 | 500,000 |
| Papa Murphy's | https://sharpsheets.io/blog/papa-murphys-franchise-costs-profits/ | Pizza | 433,174 | 580,441 | 1.3 | 5.0 | 275,000 | 125,000 |
| Auntie Anne's | https://sharpsheets.io/blog/auntie-annes-franchise-costs-profits/ | Pretzels | 229,692 | 343,135 | 1.5 | 5.6 | 300,000 | 100,000 |
| Firehouse Subs | https://sharpsheets.io/blog/firehouse-subs-franchise-costs-profits/ | Sandwich | 613,186 | 888,356 | 1.4 | 4.6 | 350,000 | 100,000 |
| Tropical Smoothie Cafe | https://sharpsheets.io/blog/tropical-smoothie-cafe-franchise-costs-profits/ | Smoothie | 430,500 | 961,969 | 2.2 | 3.0 | 350,000 | 125,000 |
| Marco’s Pizza | https://sharpsheets.io/blog/marcos-pizza-franchises-costs-profits/ | Pizza | 437,625 | 895,523 | 2.0 | 3.3 | 400,000 | 100,000 |
| Cinnabon | https://sharpsheets.io/blog/cinnabon-franchises-costs-profits/ | Sweets | 276,062 | 394,897 | 1.4 | 5.8 | 300,000 | 120,000 |
| Cold Stone Creamery | https://sharpsheets.io/blog/cold-stone-creamery-franchise-costs-profits/ | Ice Cream | 310,956 | 417,588 | 1.3 | 5.0 | 250,000 | 100,000 |
| Jamba | https://sharpsheets.io/blog/jamba-franchise-costs-profits/ | Smoothie | 414,562 | 597,028 | 1.4 | 7.7 | 300,000 | 100,000 |
| Church’s Chicken | https://sharpsheets.io/blog/churchs-texas-chicken-fees-sales-costs/ | Chicken | 1,195,147 | 1,395,088 | 1.2 | 5.7 | 1,000,000 | 300,000 |
| Moe’s Southwest Grill | https://sharpsheets.io/blog/moes-southwest-grill-franchises-costs-profits/ | Mexican | 792,370 | 1,013,361 | 1.3 | 5.2 | 1,000,000 | 100,000 |
| Tim Hortons | https://sharpsheets.io/blog/tim-hortons-franchises-costs-profits/ | Coffee | 1,242,750 | 1,188,240 | 1.0 | 7.0 | 500,000 | 100,000 |
| Checkers & Rally's | https://sharpsheets.io/blog/checkers-franchises-profits-sales-costs/ | Burger | 837,847 | 1,039,773 | 1.2 | 5.4 | 750,000 | 250,000 |
| Charleys Philly Steaks | https://sharpsheets.io/blog/charleys-philly-steaks-costs-profits/ | Sandwich | 509,806 | 786,233 | 1.5 | 4.3 | 500,000 | 100,000 |
| Buffalo Wild Wings | https://sharpsheets.io/blog/buffalo-wild-wings-costs-profits/ | Chicken | 3,546,900 | 2,534,148 | 0.7 | 9.3 | 1,500,000 | 750,000 |
| Rita's Ice | https://sharpsheets.io/blog/ritas-ice-franchise-costs-profits/ | Ice Cream | 215,839 | 248,340 | 1.2 | 5.8 | 300,000 | 100,000 |
| A&W Restaurants | https://sharpsheets.io/blog/aw-restaurants-franchises-costs-profits/ | Burger | 786,750 | 851,212 | 1.1 | 6.2 | 350,000 | 150,000 |
| Hungry Howie’s Pizza | https://sharpsheets.io/blog/hungry-howies-pizza-franchise-costs-profits/ | Pizza | 419,682 | 806,899 | 1.9 | 3.5 | 750,000 | 200,000 |
| Bojangles | https://sharpsheets.io/blog/bojangles-franchise-costs-profits/ | Chicken | 1,658,000 | 1,801,057 | 1.1 | 6.1 | 1,000,000 | 500,000 |
| McAlister’s Deli | https://sharpsheets.io/blog/mcalister-deli-franchise-costs-profits/ | Sandwich | 1,424,963 | 1,865,861 | 1.3 | 5.1 | 1,000,000 | 500,000 |
| Round Table Pizza | https://sharpsheets.io/blog/round-table-pizza-franchise-costs-profits/ | Pizza | 783,250 | 1,037,816 | 1.3 | 5.0 | 500,000 | 200,000 |
| Qdoba Mexican Eats | https://sharpsheets.io/blog/qdoba-mexican-eats-franchise-costs-profits/ | Mexican | 659,250 | 972,962 | 1.5 | 4.5 | ||
| Freddy’s | https://sharpsheets.io/blog/freddys-franchise-costs-profits/ | Burger | 1,453,040 | 1,792,929 | 1.2 | 5.4 | 1,000,000 | 400,000 |
| Taco John’s | https://sharpsheets.io/blog/taco-johns-franchise-costs-profits/ | Mexican | 1,119,000 | 1,124,980 | 1.0 | 6.6 | 1,000,000 | 400,000 |
| Scooter’s Coffee | https://sharpsheets.io/blog/scooters-coffee-franchise-costs-profits/ | Coffee | 1,143,250 | 797,101 | 0.7 | 9.6 | 500,000 | 200,000 |
| Einstein Bros. Bagels | https://sharpsheets.io/blog/einstein-bros-bagels-franchise-costs-profits/ | Sandwich | 750,075 | 885,011 | 1.2 | 5.7 | 1,000,000 | 536,500 |
| Great American Cookies | https://sharpsheets.io/blog/great-american-cookies-franchise-costs-profits/ | Sweets | 385,275 | 452,771 | 1.2 | 5.7 | 250,000 | 100,000 |
| Wienerschnitzel | https://sharpsheets.io/blog/wienerschnitzel-franchise-costs-profits/ | Hot dogs | 873,300 | 880,980 | 1.0 | 6.6 | 600,000 | 250,000 |
| Blaze Pizza | https://sharpsheets.io/blog/blaze-pizza-franchise-costs-profits/ | Pizza | 865,450 | 1,096,432 | 1.3 | 7.9 | 500,000 | 300,000 |
| Wetzel's Pretzels | https://sharpsheets.io/blog/wetzels-pretzels-franchise-costs-profits/ | Pretzels | 377,571 | 748,857 | 2.0 | 3.4 | 300,000 | 50,000 |
| Pizza Ranch | https://sharpsheets.io/blog/pizza-ranch-franchise-costs-profits/ | Pizza | 3,268,300 | 1,174,088 | 0.4 | 18.6 | 1,000,000 | 297,000 |
| Del Taco | https://sharpsheets.io/blog/del-taco-franchise-costs-profits/ | Mexican | 1,406,850 | 1,345,341 | 1.0 | 7.0 | 2,000,000 | 500,000 |
| Schlotzsky’s | https://sharpsheets.io/blog/schlotzskys-franchises-costs-profits/ | Healthy, Salads | 1,102,933 | 1,053,333 | 0.3 | 22.2 | 1,000,000 | 300,000 |
| Captain D’s | https://sharpsheets.io/blog/captain-ds-franchise-profits-costs/ | Seafood | 982,778 | 1,067,816 | 0.4 | 19.0 | 1,000,000 | 350,000 |
| Biggby Coffee | https://sharpsheets.io/blog/biggby-coffee-franchise-profits-costs/ | Coffee | 310,575 | 648,352 | 0.3 | 20.0 | 300,000 | 100,000 |
| Which Wich | https://sharpsheets.io/blog/which-wich-franchises-profits-costs/ | Sandwich | 330,375 | 281,886 | 0.3 | 22.2 | 500,000 | 150,000 |
| Marble Slab Creamery | https://sharpsheets.io/blog/marble-slab-franchises-costs-profits/ | Ice Cream | 407,360 | 251,052 | 0.4 | 16.7 | 250,000 | 100,000 |
| Mountain Mike's Pizza | https://sharpsheets.io/blog/mountain-mikes-franchise-profits-costs/ | Pizza | 410,900 | 865,713 | 0.3 | 20.0 | 300,000 | 100,000 |
| Huddle House | https://sharpsheets.io/blog/huddle-house-franchise-cost-profits/ | Diner | 988,743 | 712,428 | 0.5 | 13.3 | 600,000 | 300,000 |
| L&L Hawaiian Barbecue | https://sharpsheets.io/blog/ll-hawaiian-barbecue-franchises-costs-profits/ | BBQ | 334,350 | 612,921 | 0.3 | 33.3 | 500,000 | 150,000 |
| Chicken Salad Chick | https://sharpsheets.io/blog/chicken-salad-chick-franchises-costs-profits/ | Healthy, Salads | 651,000 | 1,202,020 | 0.3 | 20.0 | 750,000 | 250,000 |
| Golden Chick | https://sharpsheets.io/blog/golden-chick-franchises-costs-profits/ | Chicken | 362,975 | 917,609 | 2.5 | 2.6 | 2,000,000 | 425,000 |
| Perkins | https://sharpsheets.io/blog/perkins-franchise-costs-profits/ | Diner | 1,922,728 | 1,729,246 | 0.9 | 7.4 | 1,500,000 | 500,000 |
| Waba Grill | https://sharpsheets.io/blog/waba-grill-franchises-costs-profits/ | Teryaki | 454,000 | 466,536 | 1.0 | 6.5 | 1,000,000 | 250,000 |
| Bruster’s Ice Cream | https://sharpsheets.io/blog/brusters-franchises-profits-costs/ | Ice Cream | 663,925 | 466,696 | 0.7 | 9.5 | 375,000 | 150,000 |
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