Jason’s Deli Franchise in 2024: Costs, Fee & FDD
Discover the investment potential of Jason’s Deli with our in-depth analysis. Explore franchise costs, earnings, and key insights into this well-established brand. Learn if Jason’s Deli could be the right choice for your next business venture.
Table of Contents:
Jason’s Deli is a beloved American restaurant chain that was founded in 1976 by Joe Tortorice Jr., Rusty Coco, Pat Broussard, and Pete Verde. Based in Beaumont, Texas, Jason’s Deli has grown from a humble local deli into a prominent player in the fast-casual dining industry. The franchise is known for its commitment to quality, wholesome ingredients, and a welcoming, family-friendly atmosphere. Over the years, Jason’s Deli has carved out a niche for itself by offering a menu that blends classic deli favorites with innovative options, making it a standout choice in a competitive market.
At its core, Jason’s Deli serves up an impressive array of sandwiches, soups, and salads, with a strong emphasis on fresh, natural ingredients. Their famous Muffaletta sandwich, loaded baked potatoes, and salad bar are fan favorites, but they also cater to health-conscious customers with organic, gluten-sensitive, and vegetarian options. The deli’s ancillary offerings include catering services, which have become a significant part of the business, appealing to both corporate clients and families. The franchise’s core market is broad, ranging from busy professionals seeking a quick yet nutritious lunch to families enjoying a casual dinner out.
As of today, Jason’s Deli boasts over 250 locations across the United States, with a strong presence in the Southern and Midwestern regions. This franchise serves thousands of customers daily, and its dedication to quality and service has earned it a loyal following. Despite its expansion, Jason’s Deli has managed to maintain its community-focused vibe, often supporting local charities and events, which further endears it to the neighborhoods it serves.
When it comes to franchise support, Jason’s Deli offers a comprehensive training program that covers everything from day-to-day operations to marketing strategies. New franchisees are provided with hands-on training at existing locations, as well as ongoing support from the corporate team. The franchise also emphasizes the importance of maintaining its high standards for food quality and customer service, ensuring that each location delivers the consistent experience that Jason’s Deli customers have come to expect. The support system, combined with the brand’s established reputation, makes Jason’s Deli an attractive option for potential franchisees looking to invest in a stable and respected brand.
Jason’s Deli Franchise Insights
- Jason’s Deli was one of the first restaurant chains in the U.S. to remove artificial trans fats, high fructose corn syrup, and MSG from their menu, setting a standard for healthier fast-casual dining.
- With over 200 locations across 28 states, Jason’s Deli has a robust footprint, serving an estimated 50 million customers annually.
- Catering services account for nearly 20% of Jason’s Deli’s revenue, making it a significant and profitable segment of the business.
- The franchise has consistently been recognized in Consumer Reports and other publications for its high-quality food and customer satisfaction, reinforcing its reputation as a leader in the industry.
Jason’s Deli Franchise Key indicators
Growth YOY (%)
2%
vs industry 1%
Total U.S. Franchised Units
83
3-Year Failure Rate
8%
vs industry 11%
Sales-to-Investment ratio
0.5:1
How much does it cost to open a Jason’s Deli franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Jason’s Deli franchise. These financial commitments, including initial franchise fees, 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 Jason’s Deli franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Jason’s Deli below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $35,000 | $35,000 |
| Development Fee | $17,500 | $17,500 |
| Travel and Living Expenses While Training | $15,000 | $15,000 |
| Build Out or Remodeling of 4,500-5,000 Sq Ft | $950,000 | $1,600,000 |
| Fabricated Equipment Buyout Equipment | $460,000 | $460,000 |
| Furniture | $32,333 | $32,333 |
| Small Wares | $21,000 | $21,000 |
| Signage | $38,000 | $100,000 |
| Administrative and Miscellaneous | $5,000 | $20,000 |
| Licenses | $10,000 | $10,000 |
| Interim Interest Payments | $70,000 | $125,000 |
| Insurance | $4,500 | $15,000 |
| Online Ordering Set Up Costs | $450 per store | $450 per store |
| Point-Of-Sale System | $3,600 per store | $6,000 per store |
| Customer Satisfaction | $60 monthly per store | $60 monthly per store |
| System Email | $150 per user account per year | $150 per user account per year |
| Initial Inventory | $32,925 | $32,925 |
| Additional Funds | $20,000 | $35,000 |
| Total Estimated Initial Investment | $3,434,727 | $5,068,927 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Jason’s Deli franchise, the required capital involves both the initial investment costs and a net worth requirement set by the company. Let’s take a closer look below:
- Initial Investment The total estimated initial investment for a Jason’s Deli franchise ranges from approximately $3.43 million to $5.07 million. This includes all startup costs such as the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for initial operating 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 Requirement Jason’s Deli typically requires franchisees to have a minimum of $250,000 in liquid assets. This ensures the franchisee has sufficient funds to cover unforeseen expenses and maintain financial stability during the startup phase.
- Net Worth Requirement It is generally recommended that franchisees have a net worth of at least $1,000,000. This includes the value of assets like real estate, investments, and personal property, minus any liabilities.
How much does a Jason’s Deli franchise owner make?
Calculating the salary of a Jason’s Deli 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 Jason’s Deli 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.
Jason’s Deli Revenue & Gross Sales
Unfortunately Jason’s Deli has not realized earnings claims in their Item 19 in recent years. The most recent disclosure was from 2021, where Jason’s Deli franchises achieved a median gross sales of $2,079,283, reflecting a 29% increase from the previous year. While this data is not recent, it demonstrates the brand’s strong consumer demand and potential for significant returns for franchisees, even during that period.
Which key factors impact the average revenue performance of Jason’s Deli franchisees?
Several factors likely contributed to the growth of Jason’s Deli’s U.S. franchisee median gross sales revenue. First, the brand’s commitment to health-conscious offerings, such as removing artificial ingredients and providing organic options, resonated with a growing customer base prioritizing healthier eating. Additionally, Jason’s Deli’s expansion of its catering services tapped into a lucrative market segment, boosting overall sales. The franchise’s strong focus on customer service and community engagement also helped build a loyal customer base, driving repeat business. Lastly, strategic location expansion and targeted marketing efforts likely played a role in increasing brand visibility and attracting new customers, further enhancing sales performance.
Jason’s Deli Franchise Operational Costs
When opening a Jason’s Deli franchise, you’ll need to consider several key ongoing operational costs that are essential for running the business smoothly:
- Labor Costs Employee wages, benefits, and training expenses will likely be one of your largest ongoing costs, given the labor-intensive nature of the restaurant industry.
- Food and Beverage Costs Regular inventory purchases to maintain the quality and freshness of your menu offerings, including organic and specialty items, are critical and will be a significant portion of your expenses.
- Rent and Utilities Leasing the property for your location, along with paying for utilities such as electricity, water, and gas, will be a substantial and ongoing financial commitment.
- Marketing and Advertising Ongoing efforts to promote your franchise, whether through local advertising, promotions, or participation in national marketing campaigns, will require consistent funding.
- Royalties and Franchise Fees As a franchisee, you’ll pay ongoing royalties to Jason’s Deli, typically calculated as a percentage of your gross sales, as well as contributing to an advertising fund.
- Maintenance and Repairs Keeping your restaurant and equipment in good working order will involve regular maintenance and occasional repairs, which are necessary to ensure operational efficiency and a positive customer experience.
- Insurance Adequate coverage for your business, including property, liability, and worker’s compensation insurance, is crucial to protect against potential risks and liabilities.
These costs are essential to consider as they will impact your profitability and the overall success of your franchise.
Jason’s Deli Franchise Fees
Owning a Jason’s Deli franchise comes with certain ongoing fees that are required to operate under the franchise agreement. Jason’s Deli requires their franchisees to pay the following fees:
- Operating Fee This is a monthly fee paid to Jason’s Deli, typically calculated as 4% of gross sales, but not less than $2,500 per month. This fee includes all revenue from the franchise location, including take-out, catering, and delivery orders.
- Advertising Fee or Advertising Co-op Franchisees contribute 2% of gross sales towards advertising, but not less than $500 per month. Additionally, a ½ of 1% Administrative Fee may also be collected. These fees support both local and national advertising efforts.
- Transfer Fee If a franchisee sells their franchise or development agreement, a $7,000 transfer fee is required prior to the consummation of the transfer.
- Additional Fees There might be additional fees for other services or circumstances, which should be reviewed in the franchise agreement.
These ongoing fees are crucial to consider when planning the financial aspects of owning and operating a Jason’s Deli franchise. They cover the costs of brand support, advertising, and ongoing operational assistance provided by Jason’s Deli.
Jason’s Deli Franchise Earnings
In 2021, Jason’s Deli franchises reported median gross sales of $2,079,283, reflecting a 29% increase from the previous year. For owner-operators, this translated to estimated earnings of approximately $311,892, also marking a 29% year-over-year increase. Semi-absentee owners, who might not be as involved in daily operations, saw estimated earnings of around $249,514, showing the same percentage growth.
It’s important to note that these figures are from 2021 and may not reflect the current financial performance. However, they do provide valuable insight into the potential earnings and growth opportunities that Jason’s Deli franchises have demonstrated, particularly for those considering an investment in this brand.
How to Open a Jason’s Deli Franchise
Becoming a Jason’s Deli franchisee involves several important steps, from the initial inquiry to the start of operations. Below is a step-by-step outline of the process:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Application Submission After expressing interest, you’ll be required to complete a formal franchise application. This application will assess your financial qualifications, experience, and readiness to become a franchisee.
- Discovery Day If the FDD review goes well, you’ll be invited to a Discovery Day at Jason’s Deli headquarters. This is an opportunity to meet the leadership team, ask questions, and get a deeper understanding of the franchise’s operations and culture.
- Franchise Agreement Signing After a successful Discovery Day and approval from the franchise team, you’ll sign the Franchise Agreement. This legally binds you to the terms and conditions of operating a Jason’s Deli franchise.
- Securing Financing and Location Once the agreement is signed, you’ll need to secure financing if necessary. You’ll also work with Jason’s Deli’s real estate team to find an ideal location for your franchise.
- Training and Development Jason’s Deli provides comprehensive training for new franchisees, covering everything from daily operations to marketing strategies. This training usually takes place at an existing Jason’s Deli location and prepares you for managing your own restaurant.
- Build-Out and Pre-Opening Your location will undergo a build-out phase to meet Jason’s Deli’s design and operational standards. During this time, you’ll also work on pre-opening activities, such as staff hiring, local marketing, and inventory setup.
- Grand Opening and Start of Operations After completing the build-out and pre-opening preparations, you’ll launch your Jason’s Deli franchise with a grand opening event. This marks the start of your operations, with ongoing support from the Jason’s Deli corporate team to help you succeed.
Pros & Cons
Pros
Established Brand and Loyal Customer Base: Jason’s Deli has been around since 1976 and has built a strong reputation for quality and service, which can attract a steady stream of customers.
Health-Conscious Menu: The brand’s commitment to offering organic, gluten-sensitive, and fresh ingredients appeals to health-conscious consumers, setting it apart in the fast-casual dining industry.
Catering Services Revenue: Jason’s Deli’s catering service is a significant revenue stream, offering an additional income source beyond traditional in-store sales.
Community-Oriented: The franchise emphasizes community involvement and support, which can enhance customer loyalty and brand image in local markets.
Cons
Competitive Market: The fast-casual dining sector is highly competitive, with many players vying for consumer attention, which could affect sales growth.
Labor-Intensive Business: Running a Jason’s Deli requires a significant labor force, which can lead to challenges in staffing, especially during economic downturns or labor shortages.
Limited Geographic Expansion: With a strong presence in certain regions, there may be limited opportunities for new franchises in areas where the brand is already well-established.
High Investment: Jason’s Deli has quite a high investment level, which limits the number of potential franchisees who can qualify
