In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a McAlister’s Deli franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a McAlister’s Deli franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned McAlister’s Deli outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the McAlister’s Deli franchise opportunity

Section V – Presentation and analysis of McAlister’s Deli’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, highest, and lowest net sales by quartile for the 447 McAlister’s Deli traditional franchises that were eligible franchises in fiscal year 2023 (an “eligible franchise” is a franchise that reported sales in all 53 weeks of fiscal year 2023)

Section VI – Key ratios, comparables, computations, and analyses for the McAlister’s Deli franchise opportunity (exclusive content for Platinum subscribers)

Section I – McAlister’s Deli Franchise Costs

• Initial Franchise Fee:  $35,500
• Construction and Build Out Costs:  $490,000 to $732,000
• Permitting:  $3,500 to $25,000
• Equipment Package:  $235,200 to $294,000
• Millwork:  $42,300 to $66,500
• Furniture:  $12,000 to $55,000
• Menu Board, Graphics, and Interior Signage:  $10,200 to $28,000
• Exterior Signage:  $50,300 to $70,000
• Computer System:  $32,000 to $66,500
• Smallwares:  $22,600 to $28,500
• TV/Music:  $4,000 to $10,550
• Architect/Engineer:  $7,300 to $33,200
• Rent:  $7,200 to $18,600
• Grand Opening Marketing:  $25,000 to $27,000
• Legal and Accounting Fees:  $2,700 to $5,500
• Insurance:  $1,925 to $9,500
• Miscellaneous Opening Costs/Security Deposits:  $2,500 to $6,500
• Management Training Program Fee:  $0 to $25,000
• Travel and Living Expenses During Training:  $26,200 to $33,700
• On-Site Training Fee:  $0 to $34,000
• Opening Inventory:  $18,500 to $58,000
• Additional Funds for 3 Months:  $25,000 to $53,000
• Total Estimated McAlister’s Deli Franchise Costs:  $1,053,925 to $1,715,550

Section II – McAlister’s Deli’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $35,500
• Royalty Fee:  5% of Net Sales
• Advertising Contribution:  currently, 2% of Net Sales
• Advertising Cooperative Contribution:  an amount set by your Advertising Cooperative
• Local Marketing Obligation:  currently, each calendar quarter you must spend not less than 0.75% of Net Sales on local market advertising

Section III – Number of Franchised and Company-Owned McAlister’s Deli Outlets

Franchised

2021

• Outlets at the Start of the Year:  448
• Outlets at the End of the Year:  472
• Net Change:  +24

2022

• Outlets at the Start of the Year:  472
• Outlets at the End of the Year:  492
• Net Change:  +20

2023

• Outlets at the Start of the Year:  492
• Outlets at the End of the Year:  506
• Net Change:  +14

Company-Owned

2021

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  33
• Net Change:  0

2022

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  32
• Net Change:  -1

2023

• Outlets at the Start of the Year:  32
• Outlets at the End of the Year:  33
• Net Change:  +1

Section IV – News Updates on the McAlister’s Deli Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the McAlister’s Deli Franchise (Item 19, 2024 FDD)

• This Item 19 presents information about the financial performance during Fiscal Year 2023 (the fiscal year ended December 31, 2023) of certain Traditional Franchises that were eligible franchises in Fiscal Year 2023.

• A “Traditional Franchise” is a franchised Traditional Restaurant located in a traditional location, including strip shopping centers, power centers, and street-level retail.

• An “eligible franchise” is a franchise that reported sales in all 53 weeks of Fiscal Year 2023.

• This Item 19 does not include data related to (i) franchised Traditional Restaurants located in nontraditional locations (such as airports, colleges, food trucks, government buildings, hospitals, hotels, lifestyle centers, malls (including open air, traditional, and outlet malls), military bases, office building interiors, sports venues, theme parks, transit hubs, and travel plazas); (ii) non-traditional, express Restaurants that offer a limited menu; (iii) affiliate-owned Restaurants; and (iv) Traditional Franchises that were not eligible franchises in Fiscal Year 2023.

• The financial performance and operations of these excluded Restaurants can vary significantly from the performance and operations of the Traditional Franchises represented in this Item 19.

Average Net Sales by Quartile for Traditional Franchises for Fiscal Year 2023

Top Quartile

• Average Net Sales:  $2,899,821
• Number and Percentage of Restaurants Attaining or Exceeding Average Net Sales:  45/112  (40%)
• Median Net Sales:  $2,779,425
• Lowest Net Sales:  $2,372,024
• Highest Net Sales:  $5,087,293

2nd Quartile

• Average Net Sales:  $2,100,947
• Number and Percentage of Restaurants Attaining or Exceeding Average Net Sales:  51/112  (46%)
• Median Net Sales:  $2,083,403
• Lowest Net Sales:  $1,858,906
• Highest Net Sales:  $2,370,674

3rd Quartile

• Average Net Sales:  $1,663,999
• Number and Percentage of Restaurants Attaining or Exceeding Average Net Sales:  50/111  (45%)
• Median Net Sales:  $1,645,232
• Lowest Net Sales:  $1,513,839
• Highest Net Sales:  $1,853,972

Bottom Quartile

• Average Net Sales:  $1,205,014
• Number and Percentage of Restaurants Attaining or Exceeding Average Net Sales:  59/112  (53%)
• Median Net Sales:  $1,221,458
• Lowest Net Sales:  $541,857
• Highest Net Sales:  $1,513,160

Total

• Average Net Sales:  $1,968,124
• Number and Percentage of Restaurants Attaining or Exceeding Average Net Sales:  198/447  (44%)
• Median Net Sales:  $1,858,906
• Lowest Net Sales:  $541,857
• Highest Net Sales:  $5,087,293

• As of December 31, 2023, there were 479 Traditional Franchises. Of those 479 locations, 447 (93.3%) Traditional Franchises are represented in this table.

• This table does not include (i) 7 Traditional Franchises that did not report sales in all 53 weeks of Fiscal Year 2023 and (ii) 25 Traditional Franchises that opened during Fiscal Year 2023. This table also does not include 9 Traditional Franchises that permanently closed during Fiscal Year 2023, which had been open for at least 12 months prior to closing.

• No Traditional Franchises were reacquired by McAlister’s Deli in Fiscal Year 2023.

• Some Restaurants have sold or earned this amount. Your individual results may differ. There is no assurance that you’ll sell or earn as much.

• “Net Sales” includes all revenues generated by a Restaurant or conducted from or with respect to a Restaurant, whether the sales are evidenced by cash, check, credit, charge, account, barter or exchange, but does not include (a) the initial sales or reloading of gift cards, (b) discounts, (c) the sale of food or merchandise for which refunds have been made in good faith to customers, (d) the discounted portion of employee meals, (e) sales, meals, use, or excise tax imposed by a governmental authority directly on sales and collected from customers, provided that the amount for the tax is added to the selling price or absorbed therein and is actually paid by you to a governmental authority, (f) the sale of equipment used in the operation of the Restaurant, or (g) tips.

• These sales figures do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the Net Sales figures to obtain your net income or profit.

• McAlister’s Deli calculated the figures in the tables in these financial performance representations using financial reports submitted by franchisees. McAlister’s Deli has not audited or independently verified these financial reports nor has it asked questions of the submitting franchisees to determine whether they are in fact accurate and complete, although McAlister’s Deli has no information or other reason to believe that they are unreliable. No certified public accountant has audited these figures or expressed his or her opinion concerning their content or form.

Section VI – McAlister’s Deli Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️