Blimpie Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$89,780 - $588,750
Franchise Fee
$4,400
Total US Locations
101
Business Summary
Blimpie offers quick-casual restaurant franchises specializing in fresh deli sandwiches, salads, and various other food and beverage items. Franchisees operate these restaurants, which can be either traditional locations easily accessible to the general public, such as free-standing buildings or inline retail shops, or non-traditional locations found within other businesses like convenience stores, hospitals, or airports. Blimpie restaurants are designed to serve a diverse public, offering a full or limited menu depending on the location type.
Corporate History
The Blimpie brand's history dates back to April 1977 when its predecessor, Blimpie International, Inc. (BI), began operating and offering Blimpie franchises. In January 2006, an affiliate of Kahala Franchising purchased 60% interest in the Blimpie brand, acquiring the remaining 40% in May 2007. Kahala Franchising, L.L.C., the current franchisor, was formally formed in December 2008 and has been offering Blimpie franchises since August 2010. The company's parent, Kahala Brands, Inc. (formerly Kahala Corp.), merged with MTY Food Group, Inc. in July 2016. MTY, through various acquisitions since 2018, has integrated numerous other restaurant brands, including Famous Dave's, Village Inn, Wetzel's Pretzels, and Sauce Pizza and Wine, into its portfolio.
Financial Overview
Investment Range
$89,780 - $588,750
Franchise Fee (Low)
$4,400
Franchise Fee (High)
$18,000
Royalty %
6%
Marketing %
4%
Equipment Costs (Low)
$38,000
Equipment Costs (High)
$456,950
Working Capital
$17,500
Audited Financials
Yes
Offers Financing
Yes
Financial Health Notes
Item 21 states that Blimpie's financial statements are consolidated with those of its parent company, MTY Franchising USA, Inc. (the "Guarantor"), and are audited for the fiscal years ending November 30, 2024, 2023, and 2022. The Guarantor provides an absolute and unconditional guarantee to assume Blimpie's duties and obligations under its franchise registrations and franchise agreements. However, the document does not provide further details within Item 21 about the specific financial health, such as working capital amounts, any going concern qualifications, or significant financial trends for Blimpie or its parent company.
Financing Details
Blimpie does not generally offer direct or indirect financing. However, in certain specific circumstances, Blimpie (or its affiliates) may provide financing. If a franchisee purchases an existing corporate-owned Blimpie restaurant from one of Blimpie's affiliates, Blimpie may, at its sole discretion, finance up to 100% of the purchase price. The interest rate for such financing would range from 0% to 12% annually, depending on factors like the franchisee's creditworthiness and the amount financed. Repayment terms are typically 12 to 60 months in equal monthly installments. The financing is secured by a first lien on all equipment, and the franchisee's principals and their spouses must personally guarantee the debt. Default could lead to accelerated payment, increased interest rates (18% annually), and collection costs. Additionally, if a landlord requires a lease guarantee, Blimpie or an affiliate may, in their sole discretion, agree to guarantee the lease in exchange for a fee of 10% of the total rental obligations, up to a maximum of $10,000.
Performance Metrics
Total US Locations
101
Franchised Units
97
Corporate Units
4
Avg Square Footage
900
Franchising Since
1977
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
20
Litigation Summary
Blimpie (Kahala Franchising, L.L.C.) has disclosed two recent lawsuits filed by the franchisor against franchisees in 2024. One case involves a breach of contract claim in Illinois, and the other is a suit for forcible entry and detainer in Iowa. Beyond these recent cases, Blimpie's affiliates and predecessors have been involved in several concluded legal actions, primarily between 2013 and 2021. These past litigations included claims such as violations of franchise investment protection acts, misrepresentation, breach of contract, fraud, and trademark infringement, all of which were resolved through settlements or dismissals. There were also several concluded state administrative actions against Blimpie's predecessors and affiliates, dating from 2005 to 2012, which addressed issues like unregistered franchise sales and disclosure violations.
Bankruptcy History
Blimpie (Kahala Franchising, L.L.C.) states in Item 4 that no bankruptcy information is required to be disclosed for the franchisor itself. However, Item 3 mentions a Chapter 7 bankruptcy proceeding initiated in 2015 against Restaurants Acquisition I, L.L.C., an affiliate of Blimpie's parent company, MTY Food Group, Inc. This proceeding also involved W. Craig Barber and Robert Langford, who were a Chief Executive Officer and Chief Concept Officer for that affiliate at the time. This case was settled in March 2019, with Barber and Langford agreeing to make payments to the trustee and estate.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their Blimpie franchise, franchisees must provide Blimpie with at least 120 days' notice before their current agreement expires. They must be in good standing, meaning they have no defaults under their current franchise agreement or any other agreements with Blimpie or its affiliates, and have not received more than three default notices during the term (or more than two in the five years before renewal). Franchisees need to secure an approved location, sign a new franchise agreement (which may have different terms, including higher fees), pay a renewal franchise fee, and complete any required remodeling or refurbishments to meet current Blimpie System specifications. Additionally, they must be current on all financial obligations and sign a general release provided by Blimpie.
Training & Support Program
Franchisor Assistance
Blimpie provides various forms of support to its franchisees. Before opening, Blimpie offers assistance with site selection (upon written request), provides design drawings, and identifies approved suppliers for equipment, furnishings, and initial inventory. Franchisees receive a Confidential Manual with operating procedures and undergo a Training Program. After opening, Blimpie offers ongoing advisory support for marketing, merchandising, and general business operations. They also provide information on operating standards, conduct periodic inspections, and send a representative for up to six days during the grand opening week. Franchisees must participate in all marketing programs, with funds managed by Blimpie. Blimpie requires the use of an approved electronic point-of-sale (POS) system, with remote access for data collection, and offers POS Help Desk Phone Support Maintenance. They may also make software available for administrative tasks and offer pricing strategy recommendations.
Initial Training Hours
100
Training Location
Online or at corporate offices in Scottsdale, Arizona, with in-store training at affiliated restaurants in metropolitan Phoenix, Arizona.
Ongoing Support
After opening, Blimpie franchisees receive continuing advisory support in marketing, merchandising, and general business operations. Blimpie provides updated information on its operating standards and conducts periodic inspections and quality service checks of the restaurants. A Blimpie representative assists during the grand opening week for up to six days. Franchisees are required to attend mandatory refresher or additional training programs and annual conferences, for which a registration fee may be charged, with franchisees covering their own travel and lodging expenses. Blimpie may also make software available to assist with administrative, bookkeeping, accounting, and inventory control procedures. Phone support for the POS system is provided through a mandatory monthly service fee.
Franchise Requirements
Ideal Candidate Profile
Blimpie is looking for franchisees who plan to actively participate in the direct operation and daily affairs of their restaurant, emphasizing that owners who devote substantial time to their business generally perform better. Ideal candidates are expected to demonstrate strong business skills and judgment, particularly in hiring employees to ensure high customer service. Franchisees and their restaurant managers must be able to read and write English proficiently to complete the training program and effectively communicate with staff, customers, and suppliers. The business operates in a highly competitive environment, suggesting that successful candidates should possess resilience and strong management capabilities.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
Blimpie franchises are granted for a specific, approved location only. Blimpie does not provide an exclusive territory, meaning Blimpie (or its affiliates) may establish other franchised or company-owned Blimpie restaurants, or other competing brands, in close proximity to a franchisee's location. The franchisor also reserves the right to market and sell Blimpie products through various alternative distribution channels that may compete with the franchisee's location.
Staffing Notes
Blimpie requires that its franchisees actively participate in the direct operation and daily affairs of their Blimpie restaurant. The business must be personally managed and directly operated by the franchisee, another partner, shareholder, or a designated manager. Each Blimpie restaurant must employ at least one full-time on-premises supervisor, referred to as the "Manager." This Manager must meet Blimpie's criteria for a qualified restaurant operator, does not necessarily need an equity interest in the business, and must dedicate their full time during normal business hours to managing, operating, and developing the Blimpie business. Managers on each shift must be able to read and understand Blimpie's written materials and communicate in English with employees and customers. Franchisees are solely responsible for hiring, firing, training, supervising, setting employment terms and conditions, and compensating their employees. All Blimpie personnel must adhere to Blimpie's standards for sanitation, cleanliness, and demeanor, wear approved uniforms, and those in customer service roles must be sufficiently literate and fluent in English or the primary language of the market to effectively serve the public.