MOOYAH Franchises: $840 Turnover and 20% Profit Margin

With 82 franchised restaurants in the US, even though MOOYAH is not the biggest burger and shake chain unlike Steak n Shake or Five Guys for example, it’s an interesting franchise opportunity due to its affordable cost, and profitability.

Indeed, you would need to invest a mere $633,500 to open a new location on average, which is much less than the average for US restaurant franchises ($1.6 million). But it’s also a profitable franchise: with an Average Unit Volume of $840,000, MOOYAH has a payback of 5 years which is very good.

So if you’re wondering which burger franchise you should go for as a franchisee, you should seriously consider MOOYAH.

In this article we’ve done all the grunt work by looking at the latest Franchise Disclosure Document to answer questions like: how much it really costs and how much profits you can realistically make with a MOOYAH franchise. Let’s dive in!

MOOYAH franchises: key figures

Franchise fee	$40,000
Royalty fee	6.0%
Marketing fee	3.0%
Investment (mid-point)	$634,000
Average sales	$841,000
Sales to investment ratio	1.3x
Payback period*	5 years
Minimum net worth	$1,000,000
Minimum liquid capital	$500,000

What is MOOYAH?

MOOYAH Burgers, Fries & Shakes is an American fast casual restaurant chain known for its hamburgers, French fries, hot dogs, soft drinks, and shakes. 

In addition, it offers “lifestyle burgers” for Keto, Paleo, low-calorie, vegetarian, or gluten-free diets.

The chain was founded in 2007 in Plano, Texas, by American veterans Rich Hicks and Todd Istre, where it is headquartered.

MOOYAH began franchising in 2007 and currently has 82 locations in the US.

MOOYAH franchises pros and cons

Pros

• Pre-opening training: The brand offers its franchisees extensive training to equip them with knowledge about its procedures and operations. Its management and staff training program consists of 175 on-the-job hours of training and 26 classroom hours.
• Marketing support: The franchisor has a vibrant marketing and advertising strategy. Franchisees benefit from national media, regional advertising, loyalty program apps, website development, social media, and local store promotional campaigns to create awareness and public relations.
• Franchise support: With an experienced management team, the brand offers its franchise owners systems and guidance on how to establish and run a successful restaurant. Franchisees also get professional advice on best management practices from a network of successful franchise owners.
• Real estate and construction support: The brand helps its franchisees identify a convenient business location in terms of high traffic and future potential growth. Also, it provides them with restaurant designs, layout plans, construction, and lease negotiations.
• Ongoing operational support: MOOYAH Burgers, Fries & Shakes continues to support and mentor its franchisees after the grand opening to ensure that operations run smoothly. It offers them field operations, meetings and conventions, periodic franchise reviews, accounting and financial coaching, security and safety procedures, and annual meetings.
• Absentee ownership allowed: The MOOYAH Burgers, Fries & Shakes franchise presents a passive investment business opportunity. Franchisees can operate the franchise alongside their jobs and other obligations.
• Exclusive territory protection: The franchisor grants its franchisees the right to operate in a fixed area development market defined in its franchise agreement. It does not authorize any other franchises or operate competing channels or brands in the allocated area.

Cons

• No direct financing: The brand does not offer direct or indirect franchise financing for start-up costs, equipment, inventory, or trade fixtures.
• Not a part-time business: The franchise is not a part-time or side business. Franchisees must operate on a full-time basis following the franchisor’s operating hours.
• Competition: The brand faces stiff competition from well-established brands such as Burger King, Wendy’s, Sonic Drive In, Johnny Rockets or BurgerFI to name a few

How much does it cost to own a MOOYAH franchise?

On average, you may need to invest around $633,540 to open a new MOOYAH restaurant.

As the investment amount is an average, it will change depending on some factors like your location, restaurant size, etc. According to the latest Franchise Disclosure Document, the investment required can be as low as $551,918 and as high as $715,161.

MOOYAH franchises startup costs

The initial investment covers all the essential startup costs you may need to pay for starting a MOOYAH franchise. In addition to an initial franchise fee of $40,000, the investment covers the following startup costs:

• Formation Costs: security deposits, licenses & permits, leasehold improvements, furniture, fixtures, equipment, signage, professional services, initial training expenses, computer system, etc.
• Initial Marketing: grand opening promotional expenses
• Operating Costs: rent, insurance, initial inventory & supplies, uniforms, and working capital for first 3 months.

Type of cost	Low	High
Initial Franchise Fee	$40,000	$40,000
Formation Costs	$475,468	$610,161
Initial Marketing	$1,000	$5,000
Operating Costs	$35,450	$60,000
Total	$551,918	$715,161

What’s the turnover of a MOOYAH franchise?

On average, a MOOYAH franchise makes $840,904 in sales (Average Unit Volume) per year.

The sales number is the annual median sales of 62 franchised restaurants operating in 2020. Indeed, there were a total of 77 franchised restaurants at the end of 2020, but 66 of them were operational for the whole year.

COVID impacted MOOYAH franchises’ sales in 2020, but eventually, they started bouncing back at the end of 2020.

How profitable is a MOOYAH franchise?

We estimate that an average MOOYAH franchise makes $226,203 in profits per year. 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). This is mostly because prime cost is in line with the industry (prime costs represent 56.1% of sales vs. ~54% for restaurant franchises on average as per our intelligence).

Note that we had to use the industry average for rent cost (8% sales) as MOOYAH does not provide any information regarding rental costs in its Franchise Disclosure Document.

Profit and loss	Amount	% of sales
Sales	$840,904	100%
COGS	$(226,203)	26.9%
Labor	$(245,544)	29.2%
Rent	$(67,272)	8.0%*
Royalty + marketing fees	$(75,681)	9.0%
Adjusted EBITDA	$226,203	~27%

Should you invest in a MOOYAH franchise?

To answer that question we must look at the payback period, as in the time it takes for a franchise to repay the initial startup costs with the profits generated by the business itself.

On average, we consider a restaurant franchise to be a good investment if the payback period is below 6 years. Anything below 4 years is excellent.

For MOOYAH, we found the payback period is 5 years on average, which makes it a great franchise investment. To estimate this number, we assumed a 15% net profit margin, which makes sense in light of the 27% adjusted EBITDA margin calculated earlier.

How does it compare vs. other franchises?