CAVA Franchise in 2024: Costs, Fee & FDD

Cava is a vibrant and modern Mediterranean-inspired fast-casual concept that was founded by three childhood friends, Ted Xenohristos, Ike Grigoropoulos, and Dimitri Moshovitis, in 2006. The trio shared a passion for the bold flavors of their Greek heritage, which they wanted to bring to the broader American market. They started with a single restaurant in Rockville, Maryland, and their vision quickly grew into a brand that not only celebrates Mediterranean cuisine but also emphasizes healthy eating and community engagement.

At its core, Cava offers customizable bowls, pitas, and salads that allow customers to mix and match fresh ingredients like grilled meats, roasted vegetables, and a variety of spreads, including their signature Crazy Feta. They also offer a range of drinks and sides that complement the main offerings. Cava’s menu is crafted to cater to health-conscious consumers who are looking for delicious, nutritious meals on the go. Their primary customer base includes young professionals, families, and health enthusiasts who value quality, speed, and customization in their dining experiences.

As of now, Cava has expanded to over 300 locations across the United States, making it a significant player in the fast-casual dining industry. The company also operates in select international markets, although its primary focus remains on U.S. expansion. Each Cava location serves hundreds of customers daily, contributing to the brand’s reputation for fresh, flavorful, and health-conscious dining options. The brand’s success can be attributed to its ability to resonate with a broad demographic while maintaining a strong commitment to quality and sustainability.

It should be noted that Cava is not currently offering franchising opportunities. However, it is possible that Cava will decide to begin offering franchising opportunities in the future in order to further expand its footprint in the U.S.

Cava Franchise Insights

1. Cava has expanded to over 300 locations across the U.S. in just a few years, showing strong market demand and brand recognition.
2. The brand’s focus on customizable meals allows customers to tailor their dishes to personal preferences, which appeals to health-conscious and diverse dietary needs.
3. Cava is committed to sourcing local and organic ingredients, and they actively work on sustainability initiatives, making it a brand that resonates with environmentally conscious consumers.
4. Signature items like Crazy Feta and Spicy Harissa add a unique twist that sets Cava apart from other Mediterranean eateries.

How much does it cost to open a Cava franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a Cava franchise. While it is not currently possible to become a franchisee of Cava, you can still see the costs to open up a new Cava location. These financial commitments, including equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a Cava location involves several key costs. As Cava does not produce an up to date Franchise Disclosure Document (FDD), we can estimate the costs for a Cava based on public filings and analysis. The costs to open up a new Cava location are estimated to be between $535,000 to $1,300,000. The lower costs are expected for smaller location conversions and the higher costs are expected for new and larger locations.

Below are the estimated investment cost range to open a new Cava:

Required Capital

For a concept like Cava or a similar-sized investment in the fast-casual Mediterranean industry, the estimated financial requirements would likely be as follows:

• Required Capital Typically, franchisees are expected to have access to approximately $500,000 to $1,300,000 in capital to cover the initial investment costs. This range is based on the estimated total investment needed to open a location, which includes build-out, equipment, and other startup expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
• Liquid Assets It is common for franchisors to require potential franchisees to have at least $200,000 to $400,000 in liquid assets. This ensures that the franchisee has enough cash on hand to manage initial operational expenses and any unforeseen costs during the startup phase.
• Net Worth The required net worth to qualify for a franchise like Cava would likely be in the range of $750,000 to $1,500,000. This estimate is based on typical franchise requirements for concepts of similar size and investment level, ensuring that the franchisee has sufficient overall financial stability.

These figures are estimates and may vary depending on the specific franchisor’s requirements, the location of the franchise, and other factors. If Cava were to begin franchising, they would provide exact financial requirements in their Franchise Disclosure Document (FDD).

How much does a Cava franchise owner make?

While Cava is not currently franchising in the U.S., it helps to know how much a potential Cava franchise owner would make for if and when they decide to franchise. Calculating the salary of a hypothetical Cava franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a potential Cava franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

Cava Revenue & Gross Sales

Based on the most recent analysis, Cava has $2.6mm gross sales per restaurant, highlighting the brand’s substantial market presence and strong financial performance. This revenue performance reflects Cava’s ability to attract a loyal customer base and underscores its potential for significant revenue generation in the fast-casual dining industry.

Which key factors impact the average revenue performance of Cava franchisees?

Cava’s recent performance in U.S. location average gross sales revenue can likely be attributed to several key factors. First, the brand’s emphasis on health-conscious, customizable Mediterranean meals resonates with the growing consumer trend toward nutritious and convenient dining options. Additionally, Cava’s strategic expansion into key urban markets and its focus on technology, including seamless online ordering and delivery, have enhanced customer accessibility and convenience. The brand’s commitment to sustainability and community engagement further strengthens its appeal, fostering customer loyalty. Together, these factors have likely driven Cava’s strong sales performance across its U.S. locations.

Cava Franchise Operational Costs

When opening a fast-casual Mediterranean concept similar to Cava, there are several key ongoing operational costs to consider:

• Rent or Lease Payments Monthly rent or lease payments for your restaurant space, which can vary significantly depending on location and size.
• Labor Costs Wages for your staff, including front-of-house employees, kitchen staff, and management. Labor costs often include payroll taxes, benefits, and overtime.
• Cost of Goods Sold (COGS) This includes the cost of ingredients and supplies necessary to produce the menu items, which can fluctuate based on market prices and sourcing strategies.
• Utilities Regular expenses for electricity, gas, water, and waste management services, essential for running a restaurant.
• Marketing and Advertising Ongoing expenses for local marketing efforts, digital advertising, and promotional campaigns to attract and retain customers.
• Maintenance and Repairs Routine maintenance of equipment and facilities, as well as unexpected repairs, which are essential to keep operations running smoothly.
• Technology and Software Costs associated with maintaining POS systems, online ordering platforms, and other technology that supports efficient operations.
• Insurance Regular premiums for general liability, property, and workers’ compensation insurance, protecting your business against various risks.
• Licenses and Permits Annual fees for maintaining required licenses and permits, such as health permits and liquor licenses.

Understanding these costs will help you better prepare for the financial demands of running a successful fast-casual Mediterranean restaurant.

Cava Franchise Fees

Since Cava is not a franchise, it does not have any franchise fees. Cava operates as a wholly corporate-owned chain, meaning that all Cava locations are owned and managed by the corporate entity rather than individual franchisees. This corporate ownership model allows Cava to maintain strict control over the quality, service, and operational standards across all its restaurants. By managing all locations directly, Cava ensures a consistent dining experience for customers and can implement its business strategies uniformly, reinforcing its strong brand identity and commitment to excellence without the involvement of external franchise operators.

Cava Franchise Earnings

Cava’s estimated average unit volume (AUV) of $2,600,000 per restaurant highlights the brand’s significant earning potential. This impressive figure underscores the strong consumer demand and market presence that Cava has cultivated in the fast-casual dining industry. Based on these gross sales figures, a Cava restaurant has an operating profit of approximately $390,000, which would signify a 15% operating profit margin.

For potential franchisees, this level of gross sales and earnings suggests that each location has the potential to generate substantial cashflow, reflecting both the popularity of the brand and its ability to attract a loyal customer base.

While Cava currently operates as a corporate-owned chain and does not offer franchise opportunities, these gross sales and earnings figures serve as strong indicators of the financial success that a similar concept could achieve. For those considering an investment in a fast-casual Mediterranean franchise, Cava’s performance offers valuable insights into the potential earnings and growth opportunities available within this sector.

How to Open a Cava Franchise

Cava is not a franchise, meaning it does not offer franchising opportunities to individuals. Instead, all Cava locations are owned and operated by the corporate entity. This corporate ownership model allows Cava to maintain direct control over its operations, ensuring consistency in food quality, customer service, and overall brand experience across all its restaurants. As a result, it is not possible to become a franchisee of Cava.

However, if you’re interested in becoming a general manager at a Cava restaurant, here are the steps typically involved:

1. Starting Position Most employees begin in entry-level roles such as crew member or kitchen staff, where they learn the basics of Cava’s operations and brand standards.
2. Demonstrating Leadership Show strong performance, leadership skills, and a commitment to Cava’s values. Taking on additional responsibilities and showcasing the ability to lead a team is crucial.
3. Internal Promotion Cava values promoting from within. Employees who excel can advance to roles like service manager or kitchen manager, which are stepping stones toward becoming a general manager.
4. Training Programs Cava offers comprehensive training programs to develop the skills necessary for management roles, including operations, people management, and financial performance.
5. Experience and Tenure Gaining experience in various roles within the restaurant and demonstrating a successful track record is key. Typically, candidates for general manager positions have several years of industry experience and tenure with Cava.
6. Application and Selection Once the required experience and training are achieved, employees can apply for open general manager positions. The selection process includes evaluations of performance, leadership qualities, and alignment with Cava’s culture and values.

By following these steps, dedicated employees can advance to general manager positions within Cava, benefiting from the company’s commitment to internal career growth and development.

Pros & Cons to Opening a New Cava Location

Pros

Strong Brand Identity: Cava has established itself as a popular and recognized brand in the fast-casual Mediterranean dining sector, which can attract a loyal customer base to new locations.

Health-Conscious Market Appeal: With increasing consumer demand for healthy, customizable meal options, Cava’s menu aligns perfectly with current dining trends, making new locations likely to succeed.

Consistent Quality Control: As a corporate-owned chain, Cava can maintain strict control over food quality, service standards, and operational consistency, ensuring that new locations meet the brand’s high standards.

Scalability: The corporate ownership model allows Cava to scale operations efficiently, leveraging existing systems, training programs, and supply chains to open new locations smoothly.

Cons

Market Saturation: In markets where Cava already has a strong presence, opening additional locations could lead to cannibalization, reducing overall profitability.

Operational Challenges: Expanding into new regions may present operational challenges, such as adapting to local market conditions, hiring and training staff, and managing supply chain logistics.

Economic Uncertainty: The restaurant industry can be vulnerable to economic fluctuations, and new locations may face risks related to changes in consumer spending habits or economic downturns.

Competitive Landscape: The fast-casual dining space is highly competitive, with numerous brands vying for market share. New Cava locations will need to differentiate themselves to attract and retain customers.