Joe’s Crab Shack Franchise Opportunity Review

November 12, 2018


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Making a comeback is one of the hardest things a business can do after colossal failure, but Joe’s Crab Shack is going to give it a try anyway.

The seafood restaurant chain is currently going through bankruptcy but does not intend on letting that little fact hold them down. Landry’s, the owner of Joe’s Crab Shack brand, has big plans to refocus the restaurant and open more locations across the country.

While there has not yet been any confirmation on whether any of these new locations will be franchises, Landry’s track record with franchising gives us hope that it won’t be long before there are opportunities to purchase a license.

 

The Rise and Fall of Joe’s

When the first Joe’s Crab Shack opened in 1991 in Houston, TX, it was a big success. Landry’s swooped in and purchased it in 1994 with the intention of expanding it and turning Joe into a household name. In just a year, they grew from one location to four and showed no signs of slowing down.

In 2006, Landry’s sold the Joe’s Crab Shack name and all locations to the privately held J.H. Whitney & Company, who was operating under the name JCS Holdings, LLC.

JCS Holdings changed their name to Ignite Restaurant Group in 2009 and remained a privately held company until making the decision to go public in 2012. They filed for bankruptcy in 2017 and Landry’s quickly reacquired them through auction.

While Ignite was going through bankruptcy, several of Joe’s Crab Shack locations began closing their doors abruptly. Over 40 of their 130 locations went dark during this time, and all franchise sales were put on hold.

It’s unclear what caused the bankruptcy, whether it was on the part of Ignite, or a failure within the design and operation of their Joe’s locations.

In 2016, prior to the bankruptcy proceedings, Joe’s found themselves in some hot water after one of their locations was found using a controversial image of a black man’s execution by hanging with the caption “All I said was that I didn’t like the gumbo” for decor on their tables.

The use of the image caught the attention of the NAACP, and the city of Roseville, MN, where the particular restaurant was located. A spokesman for Joe’s Crab Shack apologized for the insensitive use and the image was removed, however, it left a bad taste in the mouth of some of their consumers.

Whatever the reason for the bankruptcy is, Landry’s appears to be committed to bringing the restaurant chain back to its former glory. They intend to make changes to the structure of the chain and revitalize the business model.

They also intend on spreading locations throughout the country and growing the number of locations to reach, and possibly exceed, the amount that was in operation prior to the closures.

 

Franchise Licensing

Though no franchise licenses are currently available, due to Landry’s claimed desire to rebuild the brand suggests that it will soon be opened back up to potential franchisees.

It is unknown what the terms and requirements will be for the licenses once they start selling them again, but we can analyze the former franchise fees and terms to, hopefully, give us an idea of what to expect.

The license fee for a Joe’s Crab Shack at the last known time of sale was $50,000. This is a large amount of money for a license, but they were also offering discounts if more than one license was purchased.

On top of the licensing fee, other costs are associated with opening a new restaurant. It was estimated that each new location that was opened would require between $1,487,000 and $4,584,500 in startup costs.

A large amount of capital required to open a new location is daunting but it is an investment in the business. The startup costs will need to cover securing the location, equipment, inventory, etc, but also cover the first three months of operation.

Most restaurants require at least this long to make enough money to cover their expenses, and some take much longer before they can sustain themselves, let alone turn a profit.

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Ongoing Business Relationship

For the use of Joe’s Crab Shack name as a franchisee, you will need to pay them royalty fees and advertising fees. Before they stopped selling franchises, they were charging 4 percent royalty fees and 2.5 percent in advertising fees. Each percentage is based on gross sales.

The 4 percent royalty fee they were charging is lower than the national average, which is currently clocking in at 6 percent. The advertising fees are a little higher than the national average, but only by one half of a percent.

Even though they charge a higher licensing fee, they are making up for that with lower ongoing fees, which will, in most cases, work out to be a better deal for the franchisee in the long run.

Another aspect of the ongoing business relationship a new franchisee should be aware of is the expectations that the parent company has for the new location.

Especially after the turbulent last few years that the Joe’s Crab Shack name has had to endure, it stands to reason that they will be extra vigilant of what is happening in their restaurants.

It will be hard enough for them to bring the chain back into a positive light this time. So, another scandal could kill the brand completely. Because of this, they will most likely be monitoring their franchisees closely to ensure compliance and best practices.

 

The Future of Joe’s Crab Shack

At this moment in time, it is impossible to say what the future holds for Joe’s Crab Shack. Being back as a part of the Landry’s family undoubtedly gives them their best chance for a comeback, but how successful that comeback will be is yet to be seen.

Finding success after the bankruptcy of your parent company is not impossible, but it is incredibly difficult.

If Landry’s is able to salvage what is left of the brand and bring it back to its former glory, Americans will once again be able to enjoy the mound of crab legs and the Steampot dinners that they loved so much.

Even if Joe’s is able to rebound the way Landry’s is hoping, there is no guarantee they will open it back up to franchising. And if they do, they may change the way that they offer licensing.

Currently, there are three franchised locations remaining, and they are all located in Dubai. Selling a lot of franchises in the United States may not be a top priority for them so soon after rehabilitating the struggling chain.

But knowing that they have a unique business model with a loyal following gives the aspiring franchisee hope that they will one day be able to share in the Joe’s Crab Shack life.

Anyone considering purchasing Joe’s franchise if or when they do decide to start selling them again must heavily weigh the risks and rewards of doing so. After all, Joe’s has had a rocky past and has gone through many changes.

Landry’s appears to be excited to have them back on the team, but they could just as easily sell the brand off again if they don’t like the direction that it is heading.

The public could also decide that they no longer want anything to do with the brand, causing sales to take a nosedive and kill the brand. There are a lot of unknowns in the future of Joe’s Crab Shack.

It’s important to consider all possibilities before making a decision to purchase a franchise. It is also important to note that until Landry’s make a decision on whether or not to open franchise opportunities up in the United States, speculation is all we have.

But, examining the information and getting your bearings with the company will make it much easier to arrive at a decision, should the opportunity present itself.

Should you decide it’s the right move for you, being prepared to jump on the opportunity to purchase a franchise with Joe’s Crab Shack will put you in a better position than those who have not done their research.

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Why Nothing Beats In Lead Generation Business Versus Franchising Business In 2019

In a franchising business, there are many things to put into consideration. And an intensive market research as well as $$$ investment are one of a few of those.

In the US, the average amount you need to startup a business like this is around $100,000 to as high as $250,000 without an assurance you get the same ROI or Return of Investment within a year or so.

In fact, according to the recent studies, only 51% among the franchisees can earn $50,000 yearly income and 7% of them with $250,000. Not including the royalty fees and other monthly expenses to run the business in the list. It’s a tough business model.

What’s tougher?

You don’t own the business.

You’re simply a borrower of the brand. You’re earning by taking advantage of the popularity without a guaranteed you’ll earn the same amount as promised due to several factors affecting your business. Things like location, supplies, employees, and among others.

However, in a lead generation business, this isn’t a concern at all. Besides, this is an online business. It’s scalable with a few bucks needed to start approximately $35 to $50 monthly expenses to run each lead gen site.

The best thing about this model is it’s not saturated. There are many small-scale businesses across the US in need of the bread and butter to earn high to survive, the leads.

We create them by setting the lead gen sites on the web. And in each lead gen site, you can earn an average of $500 per month to $2,000 depending on the client. Although it takes time to rank well on Google—and entails a lot of hard work—once the site runs smoothly and gains enough leads or higher, this will become your smart passive income.

Take a look at my first lead gen site for a client in Lansing, MI. I haven’t touched anything on the site since I created it in 2014. Yet, I am still earning $750 monthly paycheck for 4 years now.

If we do the math…

That’s $9,000 annual income.

Now, I am earning $36,000 from the same site.

It’s just from ONE lead gen site.

And I have 88 of them performing well on the web. Thus, I earn more or less $50,000 per month after years since I’ve been into the lead generation business.

How is this possible?

Like I’ve said earlier, there are many small businesses around the US in need of leads to earn. This is where you can be of help. Let’s say you have already had the leads they need.

They pay you for renting these leads for an income. If they discontinue, you can find someone new to have these leads rented. So, it’s a continuous process. And because this is their gold mine, they want it.

Desperately.

So, they’re ready to pay you every month to gain access to these customers on the line. Because in the lead generation business, we use the tracking phone numbers to forward these phone calls to a local business owner, using our digital assets.

Since you’re renting these leads to small businesses, your function is similar to that of a virtual real estate owner, whose role is to rent out properties to their potential customers. In our business, we connect these customers to their respective service provider. Be it a cleaning service or rental. Name it.

Across the US, there are around 30 million small businesses established. According to research, there are at least 50 niches available. So, that’s 1.5 billion markets different markets you can utilize, tantamount to the same number of potential clients to call and negotiate.

That’s a lot.

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Thus, the lead generation business is best, although scalable, and thriving. In fact, it has a guaranteed long-term viability with a 95% profit margin, which is the highest among other business models.

You own your income. You own your lead gen sites, your online properties.

This is what the business is all about. You can go and visit our lead generation coaching program to learn the fundamentals of the business as well as the RIGHT ATTITUDE to ensure success.

Stepping out from your comfort zone is the key to where I am now. I am not telling you to join because we offer a gold mine. But, an option requires much of your hard work and persistence with the RIGHT MINDSET to your financial goals.

Our lead generation coaching program doesn’t promise you quick results. In fact, to setup a thriving lead gen site, it needs around 3 to 6 months before you can start earning from it. That’s half-year REAL WORK.

In the end, you’re going to ask yourself, “How can I start to change my life for the best by creating an impact for others?” or perhaps, “Am I going to remain stuck in a mundane life by working hard in a day job?”

It’s up to you.

Your success is your responsibility.

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