In the Southern United States, Zaxby’s isn’t just a restaurant, it’s a movement. The restaurant is incredibly popular in the South and has appeared to grow steadily since it first opened in the 1990’s. Their chicken recipes and signature sauces keep customers lining up for an order of their menu favorites. Much of their growth can be attributed to franchisees, as they own the vast majority of locations. With over 800 locations, Zaxby’s has established themselves as a huge presence in the food industry, but they aren’t done yet. They are still seeking franchisees to help them grow and expand.
From the Court to Southern Domination
In 1990, friends Zach McLeroy and Tony Townley were playing basketball and commiserating about the lack of good chicken restaurants in their hometown of Statesboro, Georgia. They had experienced good chicken in the college town of Athens, where McLeroy attended the University of Georgia, and knew the potential for those restaurants to be successful. It was there on the basketball court, that they formed the idea for Zaxby’s. By march of that year, the first Zaxby’s location opened its doors in Statesboro, near the campus of Georgia Southern University.
Over the next four years, they opened other locations in Georgia and grew their brand. In 1994, they opened their first location outside of Georgia, in Bowling Green, Kentucky. By 2018, there would be over 800 locations in 18 states, most of which are in the Southern United States.
Franchising Their Chicken Dreams
McLeroy and Townley first began selling franchise licenses for Zaxby’s in 1994. The sale of franchise licenses allowed their business to expand to new areas, without the founders having to be completely hands on in the process. With their popularity and stellar chicken recipes, it was not long before they were selling franchises at warp speed.
The number of franchised locations continues to grow today. They have been steadily increasing their numbers since they began selling the licenses and they are showing no signs of stopping. Their current franchise net growth rate is 311, which is staggering in comparison to the national average of 97.
With this rapid expansion, it would not be uncommon to find that they had a moderate turnover rate. The fast increase in locations can sometimes be premature, causing failure in a number of restaurants that cannot sustain themselves. This does not appear to be the case for Zaxby’s. They have a low turnover rate of 2.83 percent. The rapid expansion, along with low turnover rate, points to an extremely healthy franchise system. When a franchise system is healthy, it can support more locations that are, generally, more successful.
Searching for the right franchise opportunity to invest in can be an overwhelming experience for the franchisee. Comparing statistics, costs, and support systems can be incredibly time consuming and confusing. Researching a franchise that has such an obvious level of success can make the decision much easier. Even if a license fee is higher, choosing to invest with a healthier franchise is still the better choice, as it can mean a bigger payoff in the long run, overshadowing the savings on the cheaper license. Zaxby’s has the system health, and a moderately priced license fee that make them an excellent choice.
Their rate for a license fee is $35,000, but that is not the only figure to look at when determining cost of ownership. Ongoing fees can also play a big role in this, and, sometimes, can be a bigger factor than the initial license fee. Zaxby’s is charging 6 percent of total sales as their royalty fee for operating under their name. They also charge 1 percent in advertising fees. The corporate company handles all the of the advertising, such as television and radio commercials, so the franchisee does not have to concern themselves with it.
Analyzing all of the available data before investing can give the franchisee a clearer picture of what to expect from owning a Zaxby’s location. With their cost of ownership falling in the average range, and their expansive growth, it offers the franchisee the opportunity to capitalize on the success of the Zaxby’s name without having to pay a higher price for it. Knowing that the level of success their brand has experienced, they could easily charge more for franchise licenses, as it would be worth it to the investor to get in on the action. By offering the licenses for less money, they allow more franchisees to buy in and expand their chain faster.
Goals and Dreams of Zaxby’s
The team at Zaxby’s has some lofty goals and they are bound and determined to succeed. Most of these goals are centered on growth and expansion for the company, and to achieve them, they need to surround themselves with the best franchisees available. This is why they have some strict criteria that must be met in order to purchase one of their licenses.
Generally speaking. Zaxby’s is looking for investors who are business savvy, financially strong, and motivated team players who can present a history of past personal successes. Since each of these items has the ability to be interpreted differently, Zaxby’s has put together a list of qualifications that they require each franchisee to meet before being allowed to join the franchise.
The first qualification that Zaxby’s lists, which can be interpreted as their idea of the most important, is a net worth of at least $1,000,000. They also require that of that million dollars, at least half is available in liquid form. The reason these are requirements is that opening a restaurant is an incredibly expensive venture. Zaxby’s needs to be sure that their new franchisee will be able to shoulder the financial responsibilities and support the restaurant through its opening and first few months of operation.
Zaxby’s also requires their applicants submit to a background check. Through that investigation, they are hoping to weed out any applications who may have issues with past creditors, criminal convictions, extensive litigation, or unsatisfactory motor vehicle records. It is incredibly important to Zaxby’s that they are turning over licenses to the best possible investors, and that they can trust these investors to do right by their brand. Allowing the wrong people to become franchise owners opens the brand up to a slew of unfortunate scenarios that could tarnish their name and cause detrimental effects to the growth of the company.
Geographic Locations Open to Receiving a Zaxby’s Restaurant
Zaxby’s is currently seeking development and expansion in 10 states: Arkansas, Florida, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Ohio, Texas, and Virginia. They are not accepting inquiries for any other states at this time, either due to the market being closed to franchising or already saturated with Zaxby’s locations.
Franchisees passing the application process and looking to open their restaurants in one of the above-mentioned states will be encouraged to select their specific locations carefully. Zaxby’s encourages their franchisees to choose areas that are suburban or rural, with heavy daytime traffic. They also advise that locations which are close to business or university districts are chosen, as they can provide a large customer base, especially during lunchtime hours.
The Perks of a Zaxby’s Franchise License
It’s no secret that Zaxby’s is growing at an incredible rate.They are planning on skyrocketing their numbers over the next ten years by over doubling their current location count. Their growth goals do not just involve the number of restaurants they will have open and operating, but also the widespread placement of locations that will give them a bigger coverage area, exposing more Americans to Zaxby’s than ever before.
To help them on this mission, Zaxby’s does their best to stand out a superior choice in franchisor. They want to attract the best possible franchisees to assist them in their growth, and to do that, they need to provide each potential franchisee with a reason why they should choose Zaxby’s over a different franchise. These incentives, not only entice quality franchisees to apply for licenses, they also serve as motivators for the franchisees once they are up and running.
Zaxby’s provide quality training to each of their new franchisees. These trainings assist the new owners in learning the tools of the trade for their particular brand. On top of the training, they also provide ongoing support, to assist the franchisees with any problems that may arise along the way. When franchisees are given this kind of support, they are statistically more likely to be engaged with the business and work harder to make it a success. Feeling as if they are a priority is important for the morale of the team.
On top of providing this support, Zaxby’s has also integrated a program called the Advisory Council. In this program, each region assigns a franchisee to be a delegate, to speak at meetings on behalf of all franchisees within that region, to discuss any happenings within the brand, and to head off any potential problems. By giving these owners a voice, Zaxby’s reiterates to them how important they are to the entire operation. Knowing that franchised locations make up over 75 percent of the total number of Zaxby’s restaurants, their importance cannot be overstated.
Very few franchisors list a franchisee council as being included when a license is purchased. It is uncommon for them to give their franchisees a forum to speak and be involved in the business of the brand as a whole. This level of trust and care in the opinions of their investors sets Zaxby’s apart from their competitors.
Choosing to invest with Zaxby’s gives a franchisee an increased chance of success. With their solid history of growth and stable sales, they have proven themselves as a sustainable restaurant chain with plenty of potential for expansion. Their propensity for turning profits, along with their dedicated levels of support to their franchisees, make them a better choice in which to invest. While many new franchisees only look into the amount of many a franchise has the potential to make, they would be well-advised to also check into the level of support that they will receive in exchange for their payments to the franchisor. Zaxby’s provides a higher level of support, involvement, and return on investment than many other franchisees. For those that are able to open a location in the markets currently available, Zaxby’s should be a clear choice.