Gourmet burgers, craft beers, and root beer floats. It’s the All-American dream franchise. JL Beers offers the opportunity to franchise their company and the rest of the world couldn’t be more excited.
But the question is, are you?
Odds are, if you’re reading this article, then you’re starting to look into the many options of franchising. And there’s no better place to start than a place like JL Beers.
The good news is, there isn’t much competition for grabbing this franchise opportunity. In fact, there were less than a handful of locations running as of 2015.
Now, in case you’re scratching your head thinking, ‘but wait, that must mean the business isn’t that great after all’. Let me break it down a little more for you here.
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Good Ole JL Beers
JL Beers currently has locations in three different states. But with your help, that number could grow. So, what makes JL beers such a fantastic establishment?
The fact that the company offers three of the main things Americans love to consume; beer, burgers, and root beer floats for the little ones (or adults like me who like to bring back the sugar rush from childhood.
The company also sells branded merchandise that people all over the country enjoy. Of course, that’s not all they offer. Their other food options are pretty out of this world too.
But what about the franchise opportunity?
I mean, that’s why you’re here, right?
Let’s dive into this beer and burger joint and find out what makes this opportunity worth it. Or even if it’s worth it.
Growth and Expected Value of the Franchise
JL Beers began their franchising opportunity back in 2013. Since then, there are said to be 3 current outlets that belong to franchisees. While that number isn’t exactly high, it’s still better than if that number was zero, I guess.
So if you’re looking for a ground floor franchise opportunity, this may not be the newest but it sure has a lot less than some other businesses out there.
While that total number of franchise outlets are low, the turnover rate is—well, that’s low too.
But, that’s a good thing!
Considering the fact that this number would represent termination, transfers, and non-renewals, you can say that this company stands firmly with their franchisees. Although, that could be just because the number of franchise outlets is only capped at three as of 2015.
Let’s talk about transparency for a minute. After all, that’s a pretty important factor when having a business. You wouldn’t want to go into franchising without knowing all the nitty-gritty details (good and bad) of the company.
Lucky for the franchisees of JL Beers, the company offers a great level of transparency for the companies financial stats. The company allows its franchisees to receive data from the system-wide average revenue of JL Beers.
So the good news is, if you take on this opportunity, you’ll be provided with the data that you need to understand where the company is at and where it’s going financially. Which is pretty dang important if you’re deciding on opening up your own piece of the business.
What’s it Going to Take?
Besides money?
And a whole lot of it?
And how much money are we exactly talking about?
Well, if we are going to talk numbers here, the franchise fee for JL Beers is $40,000. But don’t think for a second that you’re only going to be investing $40k into this company.
The average total investment could be anywhere from $80,000-$2,500,000. That’s a lot of burgers and beer! Their ongoing fees are only capped at 4% of a royalty, though. So in the end, you’re able to keep more of your profits and get back your investments. Phew.
So, do you have to sign your life away when you decide to grab this franchise?
Well, currently the contract agreement has an initial term of 15 years. It may seem like a lot, but that’s definitely a decent amount of time for you to really build your business.
However, that could bring us back to why the turnover rate was so low. Since the franchise opportunity has only been available since 2013 and the agreement term is 15 years.
The good news is, once those 15 years are up, you can either terminate or resuscitate. What I mean by that is you can renew your deal for 5 years at a time instead of the lengthy 15 years.
Sounds a lot better, right?
Let’s Wrap it Up
When you make the decision to begin a franchising adventure, it shouldn’t be taken lightly. You want to make sure you know everything about the company that you’re looking into. And make sure that it will be worth it for you in the long-run.
You have to take into consideration the number of outlets that are currently being run, the financial status of the company, the locations available, and so much more.
With JL Beers, they seem to really have a great thing going on here. There may not be many franchises currently operating, but that just leaves you with more leverage in the end.
This company offers territorial rights, training for their franchisees, discounts on purchases of more than one outlet, and there is a possibility that you can be refunded the franchise fee (under certain circumstances, of course).
It’s a heck of a lot of money to invest, but if this business continues the growth that it’s been having, then it’s sure to be worth it. Time will tell when it comes to that turnover rate. But I guess we’re going to have to wait at least another 10 years to find out due to that 15-year agreement term.
Overall, the franchise opportunity is definitely worth looking into. And as always, contact the company for any and all questions regarding franchising. They’ll be able to give you the full run-down of the process and break down the financial stats of the company so that you are not blind-sighted.
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Nowadays, small business owners, like those who want to franchise JL Beers, want to make sure their ROI is secured. However, that isn’t the case all the time. Even after months of market research, there are still way too big risks with $$$ startup investment.
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Would they say yes?
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