Published on 7 Jun 2022 Time 6 min read Last update by 7 Feb 2024

Bojangles Franchise Cost Worth It In 2024?

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This article is based on its most recent FDD.

Bojangles is a regional fast-food chain that specializes in cajun fried chicken. It was founded by Jack Fulk in the 1970s and is now led by Jose Armario. They currently have 391 franchised and 263 company-owned locations.

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How is Bojangles Franchise Positioned in the Food and Beverages Industry?

The Food and Beverage industry in the USA accounts for 13% of all manufacturing employment in the country. Around 1.46 million people are employed in this industry. Food franchises make up to 36% of the total franchise establishments in the USA and it is expected to create 1.6million more jobs by 2027. The annual growth rate in the industry is around 2% and the EBITDA multiplier is around 3x. 

Bojangles competes in the Food and Beverages market against big brand companies such as KFC. Bojangles franchisees might also compete against other nearby Bojangles locations.

How Much is a Bojangles Franchise?

The initial Bojangles Franchise Fee is $10,000 in an existing market and $35,000 in a new market. You have to pay this upfront fee when opening a Bojangles franchise.

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Bojangles Franchise Cost

The estimated total investment necessary to begin the operation of a Bojangles Franchise ranges from $1,906,400 to  $3,020,750. The following costs are part of the upfront costs included in the initial investment for Bojangles.

Many of these are one-time fees that are needed to launch the franchise.

Review the chart below to see how much it costs to buy a Bojangles franchise in 2022. 

Estimated Initial Investment

Type of expediture Amount To Whom Payment Is To Be Made
Low High
Franchise Fee $35,000 $35,000 Us
Insurance $5,000 $10,000 Insurers
Pre-opening salaries, travel, living expenses during initial training $98,000 $149,000 Employees, suppliers of food and lodging
Site selection $100 $10,000 Suppliers
Building $770,000 $950,000 Suppliers, contractors
Site work $462,000 $850,000 Suppliers, contractors
Soft costs $60,000 $200,000 Service providers; government authorities
Equipment, furniture, signage and fixtures $440,000 $600,000 Suppliers
Initial Inventory $13,800 $28,750 Suppliers
Utility deposits & business licenses $2,500 $13,000 Utility Companies, Government Authorities
Additional funds (3 months initial phase) $20,000 $175,000 Employees, insurers, suppliers
Total $1,906,400 $3,020,750

This is significantly higher than the industry average of $466,000.

Bojangles Franchise Requirements

Requirements to be eligible for a Bojangles franchise:

  • Development interest within our growth markets
  • Minimum net worth of $1 Million and net liquid assets of $500,000 per development commitment
  • Possess a successful operational background in restaurant management/ownership
  • Or hire an operations partner

Take A Few Simple Steps And You’re On Your Way To Being A Franchise Owner

  1. Complete the Franchise Application
  2. Submit your Personal Financials for evaluation
  3. Download the FDD, Acknowledge Receipt & Review
  4. Complete the Business Plan Paperwork for Evaluation
  5. Complete ProForma for Evaluation
  6. Complete a Market Visit
  7. Attend Discovery Day at the Bojangles Support Center
  8. Sign & Submit your Development Agreement

Owning a Bojangles Franchise Requires Ongoing Fees

Royalty: 4% of monthly Gross sales

Marketing Fee: 3-4% of monthly Gross sales

Renewal: 50% of franchise fee

These are in the same ballpark as the industry.

How much do Bojangles franchise owners make?

AVERAGE GROSS SALES OF FULL-SIZE RESTAURANTS

December 30, 2019 to December 27,2020 December 28, 2020 to December 26, 2021
Franchised No. of Restaurants 385 391
Average Gross Sales $1,967,505 $2,111,968
Number & Percentage of Restaurants Above Average 160 42% 165 42%
Median Gross Sales $1,784,899 $1,972,608
Range of Gross Sales $565,713 to $5,570,073 $589,891 to $6,003,148
Company-Operated No. of Restaurants 303 263
Average Gross Sales $1,725,314 $1,818,592
Number & Percentage of Restaurants Above Average 143 47% 119 45%
Median Gross Sales $1,705,951 $1,760,624
Range of Gross Sales $726,119 to $3,379,557 $670,510 to $3,826,315
Combined Franchise & Company-Operated No. of Restaurants 688 654
Average Gross Sales $1,860,843 $1,993,989
Number & Percentage of Restaurants Above Average 296 43% 281 43%
Median Gross Sales $1,739,515 $1,859,516
Range of Gross Sales $565,713 to $5,570,073 $589,891 to $6,003,148

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2020 Bojangles Median Franchise Sales: $1,784,899

Initial investment (midpoint) %Profit margin of average franchise sales Estimated Profits Time to recoup investment
$2,463,575 10% $178,489 15 years
15% $267,734 11 years
20% $356,979 8 years
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2021 Bojangles Median Franchise Sales: $1,972,608

Initial investment (midpoint) %Profit margin of average franchise sales Estimated Profits Time to recoup investment
$2,463,575 10% $197,260 14 years
15% $295,891 11 years
20% $394,520 8 years

Based on the median sales provided by Bojangles’s franchise locations, at an average of a 15% profit margin it will take around 11 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

Also, include another year which is the time it takes for the franchise to get set up and off the ground.

Is the Bojangles Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Bojangles franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems like Anytime Fitness where more transaction data is available.

Under $1 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.44

$1 Million – $5 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.34

Over $5 Million Net Sales

  • Not Applicable

When you go to sell a Bojangles franchise based on the median multiple of .44 and net sales averaging between 2020 and 2021 of $1,878,753, it would sell for $826,651. This is significantly lower than the midpoint investment of $2,463,575.

Therefore, selling your multiunit franchise system would amount to $826,651. The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

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Bojangles Income Statement

(dollars in thousands)December 26, 2021December 27, 2020
Assets
Current assets
Cash and cash equivalents$18,404$22,199
Accounts receivables, net of allowance of $69 and $110, respectively4,8393,549
Vendor receivables2,3812,564
Inventories, net3,8283,504
Prepaid and other current assets608909
Total current assets30,06032,725
Property and equipment, net45,61944,186
Goodwill, net244,250290,750
Brand340,500340,500
Franchise rights, net41,52843,061
Right of use227,624236,060
Other noncurrent assets702538
Total assets$930,283$987,820
Liabilities and Member’s Equity
Current liabilities
Accounts payable$8,560$8,781
Due to BRI4,7087,812
Accrued expenses7,8177,826
Current operating lease liabilities28,18626,823
Current maturities of finance lease obligations511764
Current deferred revenue460352
Total current liabilities50,24252,358
Operating lease liabilities, less current portion226,640237,307
Finance lease obligations, less current maturities1,4972,358
Deferred revenue, less current portion7,9654,422
Total liabilities286,344296,445
Commitments and contingencies
Member’s equity643,939691,375
Total liabilities and member’s equity$930,283$987,820

 

Bojangles Income Statement

(dollars in thousands)Year Ended December 26, 2021October 6,2020 to December 27, 2020
Revenues
Company-operated restaurant revenues$522,221$133,777
Franchise royalty revenues35,7837,946
Property and equipment rental revenues7,919323
Other franchise revenues51082
Total revenues566,433142,128
Restaurant operating expenses
Company-operated restaurant food and packaging costs158,12939,469
Company-operated restaurant labor costs156,95439,142
Company-operated restaurant operating costs137,12433,705
Company-operated restaurant depreciation and amortization14,4993,334
Costs associated with property and equipment rentals6,662252
Total restaurant operating expenses473,368115,902
Operating income before other operating expenses93,06526,226
Other operating expenses
General and administrative19,7534,386
Depreciation and amortization36,2818,633
Gain on restaurant refranchising(14,502)
Gain on disposal of property and equipment and other(472)(359)
Total other operating expenses41,06012,660
Operating income52,00513,566
Interest income5
Interest expense(213)(42)
Net income$51,797$13,524

 

Bojangles (Franchisor) Income Statement Key Insights:

Bojangles almost quadrupled in net income between 2020 and 2021 at a 390% rate of growth. As such, it is a very profitable franchise.

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How many Bojangles units have opened and closed?

Outlet TypeYearOutlets at the Start of the YearOutlets at the End of the YearNet Changes
Franchised2019437434-3
2020434432-2
2021432496+64
Company-Operated2019319312-7
2020312326+14
2021326277-49
Total Outlets2019756746-10
2020746758+12
2021758773+15

Over the last three years, the company has been expanding. While franchising units have increased, company-owned outlets are closing down.

Conclusion

Bojangles offers people the opportunity to be a part of a business that has high gross annual sales and a reliable franchisor that claims to have mastered cajun fried chicken.

While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in the Food and Beverages Industry.

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