Slim Chickens Franchise Cost, Fee & Income Deep Dive (2023)
Written by: Anna Marchesseault
Last Updated by
Rocio Somoza: March 15, 2023
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Are you interested in the food franchise industry and want to run your own business? Slim Chickens offers franchises that sell chicken tenders, wings, chicken & waffles, sandwiches, and more. Slim Chickens franchise is a fast-casual restaurant located across the United States. The franchise food industry is high in competition being rated a 3/4, 4 being very competitive but there isn’t a high amount of risk being rated a 2/4, 4 being high risk. If this interests you, keep reading about what Slim Chickens has to offer.
Contents
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History of Slim Chickens Franchise
Slim Chickens was founded by Greg Smart and Tom Gordon who started the restaurant in a garage test kitchen in 2002. The founders thought there was a need for great quality chicken in northwest Arkansas. They opened the first location in 2003 in Fayetteville, Arkansas and it grew from there.
The CEO of Slim Chickens is Thomas D. Gordon who also was the founder of this franchise. He has served as CEO since December 2002. The CFO of the company is Seth A. Jensen who has served in this role since June 2011.
Slim Chickens Litigation
Slim Chickens has dealt with two litigations that are both closed. One of the litigation was recently on September 29, 2020, called the “In the Matter of Slim Chickens’ Development Company”. This was with the Securities Division of the Department of Financial Institutions where it was alleged Slim Chickens sold two franchises without it being registered in the state of Washington. By terms of the Consent Order, Slim Chickens agreed to stop selling and offering franchises in the state of Washington and they paid the State of Washington an investigative cost of $1,000.
The second litigation was called “Hodson vs. Slim Chickens‘ Development Company” which happened in 2012. The plaintiff Hodson was an owner of Slim Chickens‘ prior affiliate which operated the franchise. Hodson sued them for breach of contract, fraud, misrepresentation, and more. They ended up settling where Slim Chickens agreed to purchase Hodson’s minority ownership which cost $420,000.
Slim Chickens Franchise Cost
The initial Slim Chickens franchise fee is $20,000 and is due once you sign the Franchise Agreement.
Estimated Initial Investment for a Single Slim Chickens Restaurant
| Type of Expenditure | Amount | To Whom Payment Is to Be Made |
|---|---|---|
| Initial Franchise Fee | $20,000 | Us |
| Real Property / Site Lease / Site Review Fees | $0 to $15,000 See Notes 2 and 3 | Third Parties |
| Construction / Site Work / Building Conversion | $350,000 to $1,200,000 | Third Parties |
| Furniture, Fixtures, and Equipment | $275,000 to $315,000 | Vendors |
| Smallwares | $12,000 to $14,000 | Vendors |
| Building Signage and Interior Graphics | $40,000 to $65,000 | Vendors |
| Soft Costs | $137,000 to $278,000 | Vendors |
| Insurance | $9,000 to $15,000 | Insurance Company |
| Opening Inventory | $6,000 to $10,000 | Vendors |
| Training Costs / Opening Assistance Reimbursement | $23,000 to $39,000 | Vendors |
| POS System / Drive-Thru Components / Menu Boards | $64,000 to $84,000 | Vendors |
| Low voltage / Security / Network Installation | $32,000 to $38,000 | Vendors |
| Security and Utility Deposits | $2,500 to $12,000 | Vendors and Utility Companies |
| Business Licenses (excluding beer and wine license) | $400 to $2,000 | Licensing Authority |
| Grand Opening Ad Expenditure | $10,000 | Service Providers |
| Additional Funds — 3 months | $40,000 to $65,000 | |
| TOTAL FOR a Single Franchise | $1,065,900 to $3,367,000 |
The Slim Chickens’ initial investment costs between $1.07 million to $3.37 million. This is quite expensive to open up a franchise but many costs take a large chunk out of the investment. The most expensive cost is construction/building the restaurant. This can cost between $350,000 to $1.2 million. Slim Chickens expects most franchisee owners to lease the restaurant because purchasing one is much more expensive.
Purchasing a restaurant is what represents the higher cost although it is a one-time purchase that could save you money in the long run.
Also, there is another option of building your restaurant. This can be costly depending on building it from scratch but in an already existing restaurant, it’s much more affordable.
Soft Costs
Another high cost which you may not know about is soft costs. Soft costs between $137,00 to $278,000 which includes mandatory site work. This involves permits, occupancy certificates, architect fees, reports, legal services, tap fee which is the amount paid for the public sewer treatment, etc. There are some flexible costs such as deciding whether to build, buy or lease your restaurant but there are other costs that cannot budge such as the soft costs. This is something to consider when deciding to purchase a franchise on how much power you have in deciding on what to buy.
Slim Chickens' Ongoing Costs and Fees
Other Fees
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 5% of Gross Sales | Payable weekly | See Explanatory Notes for definition of Gross Sales |
| Advertising Fund Contribution | 2% of Gross Sales | Payable weekly | You Pay the Advertising Fund Contribution directly to us |
The chart above shows the advertising fees such as the advertising fund contribution which is 2% of gross sales. Also, there is the local advertising cooperative contribution which is 1% of gross sales. Something to pay attention to is that these fees are paid every week so paying attention to how much you are making each week is crucial to determine the revenue you make at the end.
Transfer Fees
There are also transfer fees which means if you decide to sell the franchise you will be charged $10,000 plus the reimbursement of the actual costs in the development agreement. Also in the franchise agreement, the transfer fee is $5,000 plus the reimbursement of the actual cost. From this make sure you are 100% willing to follow through with this franchise because it is extremely costly to get out of it.
Franchise Royalty Fee
The Royalty Fee is 5% of gross sales which is paid weekly.
How Much Do Slim Chickens Franchise Owners Make?
Slim Chickens Franchise Owners’ Earnings
| Group # | Average Gross Sales per Restaurant | Median Gross Sales per Restaurant | Total Number of Restaurants in Analysis | Number of Restaurant in Category Meeting or Exceeding the Average Amount | Number of Restaurants in Category Meeting or Exceeding the Median Amount |
|---|---|---|---|---|---|
| 1 (Gross Sales > $3,000,000) | $3,408,756 | $3,262,952 | 5 | 2 | 3 |
| 2 (Gross Sales $2,000,000 to $3,000,000) | $2,440,547 | $2,439,049 | 10 | 5 | 5 |
| 3 (Gross Sales $1,500,000 to $2,000,000) | $1,800,809 | $1,823,668 | 18 | 10 | 9 |
| 4 (Gross Sales < $1,500,000) | $1,255,142 | $1,267,326 | 23 | 14 | 13 |
Chart Analysis
The chart above it splits up the restaurants based on how much they make the highest being 1 and the lowest being 4. The average gross sales of all Slim Chickens restaurants is $1.8 million. The lowest gross sales are $901,510 and the highest is $4 million.
Many of the restaurants are in the lowest category which is meeting or making less than $1.5 million. This doesn’t look promising for future franchise owners especially if you are just getting started. It may take you a few years to earn back your investment and it might be quite difficult to earn a spot in the top tier.
Slim Chickens Units Opened and Closed
Systemwide Outlet Summary
| Outlet type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2018 | 50 | 56 | +6 |
| 2019 | 56 | 59 | +3 | |
| 2020 | 59 | 78 | +19 | |
| Company-Owned | 2018 | 16 | 20 | +4 |
| 2019 | 20 | 23 | +3 | |
| 2020 | 23 | 11 | -12 | |
| Total Outlets | 2018 | 66 | 76 | +10 |
| 2019 | 76 | 82 | +6 | |
| 2020 | 82 | 89 | +7 |
