Shopping Cart

No products in the cart.

Zaxby’s Franchises Make $2.3M Sales: 2022 Costs & Profits

Founded in 1990, Zaxby’s is one of the most popular chicken fast food franchise in the US. Indeed, even though it was founded recently, Zaxby’s already has 915 stores in the US. Yet there is a lot of untapped potential, not to mention internationalization.

But is the hype justified? Is this really a good business for franchisees?

With average annual sales of $2.2 million and a (mere) investment cost of $534,750, it does seem like it. In this article we’re looking at Zaxby’s from the angle of its Franchise Disclosure Document to find out whether it’s a profitable business, and whether you should invest in it. Let’s dive in!

Zaxby’s revenues, costs & fees

Franchise fee$35,000
Royalty fee6.0%
Marketing fee3.9%
Investment (mid-point)$534,750
Average annual sales$2,229,187
Investment to sales ratio4.2x
Investment payback*2.4 years (excellent)
Minimum net worth$1,000,000
Minimum liquid capital$500,000
* using 15% net profit margin

🔎 How does Zaxby’s compare vs. other franchises? Check the ranking

What is Zaxby’s?

Zaxby’s is a leading American casual fast-chain company that has over 915 stores in the US and is still growing.

Zaxby’s was founded in 1990 by Zach McLeroy and Tony Townley in Statesboro, Georgia.

Operating as a fast-casual dining restaurant, Zaxby’s offers made-to-order chicken fingers, chicken wings, sandwiches, salads, and appetizers. In addition, it offers teriyaki, BBQ, and hot honey mustard with its signature dipping sauces.

The franchising journey began in 1994, when it opened its first franchise in Bowling Green, Kentucky. It operates under Zaxby’s SPE Franchisor LLC, with its headquarters in Athens, Georgia.

Zaxby’s franchise pros and cons

Operating a Zaxby’s franchise presents the following advantages and disadvantages:

Pros

  • Popular brand: Zaxby’s is well known for its signature crispy breaded chicken wings and other products. New franchisees are guaranteed huge traffic from customers who identify with their brand and attract new customers who want to be part of the famous chicken brand.
  • Strong presence: For over 30 years, Zaxby’s has established a strong presence in more than 17 US states, mostly in the south. New franchisees can easily market in potential locations, leaning on this presence. 
  • Franchise support: One of the benefits new franchisees enjoy from the franchisor is their extensive training and support. It organizes an annual conference for franchisees to meet leading franchises, broaden their networks, exchange management strategies, and discuss profitability ideas.
  • Potential for global growth: New franchisees can operate Zaxby’s anticipating a lot of growth. This is because the parent company has a huge customer following for its crispy chicken. The chain also plans to expand its operations in the US and beyond.

Cons

  • Not yet a global brand: Zaxby’s is well known in the US but has yet to open an international store. As a result, it may not be an appealing option for interested investors looking to open a restaurant outside the United States. This is because it is difficult and expensive to familiarize the brand with new markets, especially outside the US.
  • Competition: The chicken fast food industry continues to be very competitive. With changing customer tastes and market trends, Zaxby’s competes with market leaders like Popeyes and Chick-fil-A. This makes Zaxby’s franchise less attractive as it may have low profitability.
  • Long training period: Zaxby’s has very extensive training and induction programs. Principals and designated managers are required to undergo the franchisor’s initial management training program, which has three phases. They are also to receive on-the-job training and subsequent training to the satisfaction of the franchisor.

How much does a Zaxby’s franchise cost?

including the initial franchise fee of $35,000, you need a total of $534,750 as the initial investment to begin a Zaxby’s franchise.

The number mentioned above is an estimated average; it can change based on several factors, like your location, the current market price of equipment, etc. Generally, the investment for a Zaxby’s franchise ranges from $351,000 – $718,500.

The investment includes everything you need to start a restaurant business, along with the initial franchise fee. For example, the investment includes:

  • Build costs: lease deposit and payment, furniture, fixtures, equipment, signage, permits and licenses, training expenses, etc. 
  • Marketing costs: initial marketing contribution
  • Operating costs: initial inventory, insurance, technology system, uniforms, etc. It also includes an additional fund for the first 3 months to cover the first losses
Type of costInvestment amount
Initial franchise fee$35,000
Build costs$271,500 – $502,000
Marketing costs$5,200 – $10,000
Operating expenses$39,300 – $171,500
Total$351,000 – $718,500
Source: FDD 2021

What is the turnover of a Zaxby’s franchise?

On average, a Zaxby’s franchise makes $2,229,187 in sales annually. This amount is the average median sales of 741 franchised restaurants operated in 2020 in the US. 

If you consider the growth of Zaxby’s franchised restaurants, you will see that revenue per restaurant is growing over the past years despite the impact of the COVID-19 pandemic.

Source: FDD 2021
YearRestaurantsSales (median)
2018722$1,999,100
2019734$2,106,633
2020741$2,229,187
Source: FDD 2021

How profitable is a Zaxby’s franchise?

When it comes to financial disclosure, Zaxby’s is incredibly helpful. Indeed, the level of detail provided in its Franchise Disclosure Document is by far one of the most detailed and helpful we’ve seen so far.

For example, Zaxby’s provides a detailed profit-and-loss of its restaurants by segmenting them in 4 categories: from the less successful 25% of restaurants to the most successful quartile (in terms of sales).

What’s interesting is that, unsurprisingly, gross margin is pretty flat for all restaurants (COGS represents ~32%). Labor costs is a bit less stable from 23.5% to 26.9% of sales.

Finally, EBITDA ranges from 8.5% for the less successful restaurants up to 17.5% for the most successful ones. Here’s the full breakdown below:

Quartile25%50%75%100%
Sales1,488,3952,013,3972,412,0003,061,000
COGS519,924689,660825,0001,048,446
% sales34.9%34.3%34.2%34.3%
Labor costs400,293500,233595,235720,443
% sales26.9%24.8%24.7%23.5%
Rent151,127162,085168,584183,671
% sales10.2%8.1%7.0%6.0%
Adjusted EBITDA417,051661,419823,1811,108,440
% sales28.0%32.9%34.1%36.2%
Other costs290,093391,276447,709571,940
EBITDA126,958270,143375,472536,500
% sales8.5%13.4%15.6%17.5%

Here’s the sales to net profit breakdown for an average Zaxby’s store (EBITDA margin stands at 14.5%, in line with comparable franchises):

Source: 2022 FDD

Is a Zaxby’s franchise a good investment?

If we compare the investment cost ($534,750 on average) to net profits (which we assume are around 10%, we obtain an average payback period of 2.4 years.

In other words, it would take you on average 2.4 years to reimburse your original investment to open a Zaxby’s restaurant. No need to tell you this is a very good payback period hence Zaxby’s is a great investment from that perspective.

Indeed, for this type of franchise we consider that a good payback period is anywhere below 4 years, and anything above 5 years is mediocre.

Of course, this number is an average of a number of Zaxby’s restaurants. As such, your financial performance may vary (and the payback period too). Yet, as we just saw earlier, the financial performances of their franchises are similar, even when we compare the lowest and highest quartile (see above).

Download the Zaxby’s business plan and get your franchise funded

Including a 5-year financial plan built with the latest Franchise Disclosure Document numbers

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)S/I RatioPayback (years)Min. net worth ($)Min. liquid capital ($)
Chick-Fil-Ahttps://sharpsheets.io/blog/chick-fil-a-franchise-costs-profits/Chicken1,363,5104,227,4173.12.2--
Dunkin' Donutshttps://sharpsheets.io/blog/dunkin-donuts-franchise-costs-profits/Donuts779,0001,056,5211.44.9500,000250,000
Domino'shttps://sharpsheets.io/blog/dominos-franchise-profits-costs/Pizza398,7251,286,4283.23.9250,00075,000
Krispy Kremehttps://sharpsheets.io/blog/krispy-kreme-franchise-costs-profits/Donuts824,0003,400,0004.11.62,000,000300,000
Little Caesarshttps://sharpsheets.io/blog/little-caesars-franchise-costs-profits/Pizza1,022,850798,1130.88.5350,000150,000
Wingstophttps://sharpsheets.io/blog/wingstop-franchise-costs-profits/Chicken631,6951,460,4592.32.91,200,000600,000
Steak 'n Shakehttps://sharpsheets.io/blog/steak-n-shake-franchise-costs-profits/Burger, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookieshttps://sharpsheets.io/blog/crumbl-cookie-franchise-cost-profits/Sweets507,2241,582,0903.12.1300,000150,000
Taco Bellhttps://sharpsheets.io/blog/taco-bell-franchise-costs-profits/Mexican462,4131,650,0003.61.91,500,000750,000
Popeyeshttps://sharpsheets.io/blog/popeyes-franchise-costs-profits/Chicken1,095,7831,444,6171.35.11,000,000500,000
Smoothie Kinghttps://sharpsheets.io/blog/smoothie-king-franchise-costs-profits/Smoothie688,108573,2690.88.0300,000100,000
Jersey Mike'shttps://sharpsheets.io/blog/jersey-mikes-franchise-costs-profits/Sandwich574,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakeshttps://sharpsheets.io/blog/nothing-bundt-cakes-franchise-costs-profits/Sweets538,6501,307,2802.42.7600,000150,000
Jimmy John'shttps://sharpsheets.io/blog/jimmy-johns-franchise-costs-profits/Sandwich513,650874,8451.73.9300,00080,000
Texas Roadhousehttps://sharpsheets.io/blog/texas-roadhouse-franchise-costs-profits/Steakhouse4,209,5002,955,5340.79.5n.a.200,000
Kung Fu Teahttps://sharpsheets.io/blog/kung-fu-tea-franchise-costs-profits/Bubble tea250,125353,2371.44.7n.a.25,000
Wendy’shttps://sharpsheets.io/blog/wendys-franchise-cost-profits/Burger1,374,8331,791,2311.35.11,000,000500,000
Burger Kinghttps://sharpsheets.io/blog/burger-king-franchise-costs-profits/Burger1,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-Inhttps://sharpsheets.io/blog/sonic-drive-in-franchise-costs-profits/Burger1,467,0831,617,0001.16.01,000,000500,000
Panera Breadhttps://sharpsheets.io/blog/panera-bread-franchise-costs-profits/Sandwich2,290,5002,599,4321.15.97,500,0003,000,000
Pizza Huthttps://sharpsheets.io/blog/pizza-hut-franchise-costs-profits/Pizza935,575906,9111.06.9700,000350,000
KFChttps://sharpsheets.io/blog/kfc-franchise-costs-profits/Chicken1,802,0501,567,4740.97.71,500,000750,000
Arby’shttps://sharpsheets.io/blog/arbys-franchise-costs-profits/Sandwich1,184,9751,126,2631.07.01,000,000500,000
Dairy Queenhttps://sharpsheets.io/blog/dairy-queen-franchise-costs-profits/Ice Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Boxhttps://sharpsheets.io/blog/jack-in-the-box-franchise-costs-profits/Burger2,195,8001,755,5030.812.51,000,000250,000
Papa John’shttps://sharpsheets.io/blog/papa-johns-franchise-costs-profits/Pizza353,6951,101,1273.12.1750,000250,000
Zaxby’shttps://sharpsheets.io/blog/zaxbys-franchise-costs-profits/Chicken534,7502,229,1874.22.41,000,000500,000
Hardee’shttps://sharpsheets.io/blog/hardees-franchise-costs-profits/Burger1,759,0001,147,9750.710.21,000,000300,000
Culver’shttps://sharpsheets.io/blog/culvers-franchise-costs-profits/Burger4,044,5003,051,7620.88.82,000,000350,000
Five Guyshttps://sharpsheets.io/blog/five-guys-franchise-costs-profits/Burger511,2251,203,3662.42.8500,000250,000
Carl’s Jr.https://sharpsheets.io/blog/carls-jr-franchise-costs-profits/Burger1,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbinshttps://sharpsheets.io/blog/baskin-robbins-franchise-costs-profits/Ice Cream465,100316,8150.79.8250,000125,000
IHOPhttps://sharpsheets.io/blog/ihop-franchise-costs-profits/Pancakes2,058,3021,553,3110.88.81,500,000500,000
Applebee’shttps://sharpsheets.io/blog/applebees-franchise-costs-profits/Casual American5,137,9662,356,9650.514.51,000,000500,000
Denny'shttps://sharpsheets.io/blog/dennys-franchise-costs-profits/Casual American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy'shttps://sharpsheets.io/blog/papa-murphys-franchise-costs-profits/Pizza433,174580,4411.35.0275,000125,000
Auntie Anne'shttps://sharpsheets.io/blog/auntie-annes-franchise-costs-profits/Pretzels229,692343,1351.55.6300,000100,000
Firehouse Subshttps://sharpsheets.io/blog/firehouse-subs-franchise-costs-profits/Sandwich613,186888,3561.44.6350,000100,000
Tropical Smoothie Cafehttps://sharpsheets.io/blog/tropical-smoothie-cafe-franchise-costs-profits/Smoothie430,500961,9692.23.0350,000125,000
Marco’s Pizzahttps://sharpsheets.io/blog/marcos-pizza-franchises-costs-profits/Pizza437,625895,5232.03.3400,000100,000
Cinnabonhttps://sharpsheets.io/blog/cinnabon-franchises-costs-profits/Sweets276,062394,8971.45.8300,000120,000
Cold Stone Creameryhttps://sharpsheets.io/blog/cold-stone-creamery-franchise-costs-profits/Ice Cream310,956417,5881.35.0250,000100,000
Jambahttps://sharpsheets.io/blog/jamba-franchise-costs-profits/Smoothie414,562597,0281.47.7300,000100,000
Church’s Chickenhttps://sharpsheets.io/blog/churchs-texas-chicken-fees-sales-costs/Chicken1,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grillhttps://sharpsheets.io/blog/moes-southwest-grill-franchises-costs-profits/Mexican792,3701,013,3611.35.21,000,000100,000
Tim Hortonshttps://sharpsheets.io/blog/tim-hortons-franchises-costs-profits/Coffee1,242,7501,188,2401.07.0500,000100,000
Checkers & Rally'shttps://sharpsheets.io/blog/checkers-franchises-profits-sales-costs/Burger837,8471,039,7731.25.4750,000250,000
Charleys Philly Steakshttps://sharpsheets.io/blog/charleys-philly-steaks-costs-profits/Sandwich509,806786,2331.54.3500,000100,000
Buffalo Wild Wingshttps://sharpsheets.io/blog/buffalo-wild-wings-costs-profits/Chicken3,546,9002,534,1480.79.31,500,000750,000
Rita's Icehttps://sharpsheets.io/blog/ritas-ice-franchise-costs-profits/Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurantshttps://sharpsheets.io/blog/aw-restaurants-franchises-costs-profits/Burger786,750851,2121.16.2350,000150,000
Hungry Howie’s Pizzahttps://sharpsheets.io/blog/hungry-howies-pizza-franchise-costs-profits/Pizza419,682806,8991.93.5750,000200,000
Bojangleshttps://sharpsheets.io/blog/bojangles-franchise-costs-profits/Chicken1,658,0001,801,0571.16.11,000,000500,000
McAlister’s Delihttps://sharpsheets.io/blog/mcalister-deli-franchise-costs-profits/Sandwich1,424,9631,865,8611.35.11,000,000500,000
Round Table Pizzahttps://sharpsheets.io/blog/round-table-pizza-franchise-costs-profits/Pizza783,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eatshttps://sharpsheets.io/blog/qdoba-mexican-eats-franchise-costs-profits/Mexican659,250972,9621.54.5
Freddy’shttps://sharpsheets.io/blog/freddys-franchise-costs-profits/Burger1,453,0401,792,9291.25.41,000,000400,000
Taco John’shttps://sharpsheets.io/blog/taco-johns-franchise-costs-profits/Mexican1,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffeehttps://sharpsheets.io/blog/scooters-coffee-franchise-costs-profits/Coffee1,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagelshttps://sharpsheets.io/blog/einstein-bros-bagels-franchise-costs-profits/Sandwich750,075885,0111.25.71,000,000536,500
Great American Cookieshttps://sharpsheets.io/blog/great-american-cookies-franchise-costs-profits/Sweets385,275452,7711.25.7250,000100,000
Wienerschnitzelhttps://sharpsheets.io/blog/wienerschnitzel-franchise-costs-profits/Hot dogs873,300880,9801.06.6600,000250,000
Blaze Pizzahttps://sharpsheets.io/blog/blaze-pizza-franchise-costs-profits/Pizza865,4501,096,4321.37.9500,000300,000
Wetzel's Pretzelshttps://sharpsheets.io/blog/wetzels-pretzels-franchise-costs-profits/Pretzels377,571748,8572.03.4300,00050,000
Pizza Ranchhttps://sharpsheets.io/blog/pizza-ranch-franchise-costs-profits/Pizza3,268,3001,174,0880.418.61,000,000297,000
Del Tacohttps://sharpsheets.io/blog/del-taco-franchise-costs-profits/Mexican1,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’shttps://sharpsheets.io/blog/schlotzskys-franchises-costs-profits/Healthy, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’shttps://sharpsheets.io/blog/captain-ds-franchise-profits-costs/Seafood982,7781,067,8160.419.01,000,000350,000
Biggby Coffeehttps://sharpsheets.io/blog/biggby-coffee-franchise-profits-costs/Coffee310,575648,3520.320.0300,000100,000
Which Wichhttps://sharpsheets.io/blog/which-wich-franchises-profits-costs/Sandwich330,375281,8860.322.2500,000150,000
Marble Slab Creameryhttps://sharpsheets.io/blog/marble-slab-franchises-costs-profits/Ice Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizzahttps://sharpsheets.io/blog/mountain-mikes-franchise-profits-costs/Pizza410,900865,7130.320.0300,000100,000
Huddle Househttps://sharpsheets.io/blog/huddle-house-franchise-cost-profits/Diner988,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecuehttps://sharpsheets.io/blog/ll-hawaiian-barbecue-franchises-costs-profits/BBQ334,350612,9210.333.3500,000150,000
Chicken Salad Chickhttps://sharpsheets.io/blog/chicken-salad-chick-franchises-costs-profits/Healthy, Salads651,0001,202,0200.320.0750,000250,000
Golden Chickhttps://sharpsheets.io/blog/golden-chick-franchises-costs-profits/Chicken362,975917,6092.52.62,000,000425,000
Perkinshttps://sharpsheets.io/blog/perkins-franchise-costs-profits/Diner1,922,7281,729,2460.97.41,500,000500,000
Waba Grillhttps://sharpsheets.io/blog/waba-grill-franchises-costs-profits/Teryaki454,000466,5361.06.51,000,000250,000
Bruster’s Ice Creamhttps://sharpsheets.io/blog/brusters-franchises-profits-costs/Ice Cream663,925466,6960.79.5375,000150,000