Garbanzo Mediterranean Fresh Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$511,500 - $805,000
Franchise Fee
$26,250
Min Cash Required
$102,300
Total US Locations
26
Business Summary
Garbanzo Mediterranean Fresh restaurants offer quick-service Mediterranean cuisine, including hummus, falafel, chicken and beef shwarmas, and salads on handmade pita and laffa, as well as soups, desserts, and beverages. These restaurants serve customers for lunch, dinner, catering, and delivery.
Corporate History
Garbanzo Mediterranean Fresh, as a brand system, began offering franchises through its predecessor, Garbanzo Mediterranean Grill Franchising, LLC, in October 2009. The predecessor entity, along with its parent and affiliates, filed for Chapter 11 bankruptcy on August 12, 2020. Following this, Garbanzo Franchising Co., LLC was formed on November 20, 2020, as a Delaware limited liability company. It acquired substantially all of the predecessor's assets, including existing franchise agreements and intellectual property, on December 21, 2020. Garbanzo Franchising Co., LLC then officially began offering Garbanzo Mediterranean Fresh franchises on March 30, 2021. The brand is part of the WOWorks family of brands, which also includes Saladworks, Frutta Bowls, Barberitos, and Zoup! Eatery, all under the parent company CLP Dining, LLC.
Financial Overview
Investment Range
$511,500 - $805,000
Franchise Fee (Low)
$26,250
Franchise Fee (High)
$36,000
Minimum Cash Required
$102,300
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$374,000
Equipment Costs (High)
$599,000
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Garbanzo Franchising Co., LLC's financial health, as reflected in its parent company's (Restaurant Co., LLC dba WOWorks) consolidated financial statements, raises concerns. The company reported a net loss of $3,114,915 for the fiscal year ending September 29, 2024, and $1,009,706 for the fiscal year ending September 24, 2023. As of September 29, 2024, the company also reported a member's deficit equity of $(924,730). Furthermore, a full valuation allowance has been applied to deferred income tax assets due to cumulative net losses since the company's inception, which suggests these assets may not be realized. The franchisor explicitly states in its Special Risks section that its financial condition calls into question its ability to provide services and support to franchisees.
Financing Details
Garbanzo Franchising Co., LLC does not offer any direct or indirect financing to franchisees and does not guarantee any of their notes, leases, or other obligations.
Performance Metrics
Total US Locations
26
Franchised Units
18
Corporate Units
8
Avg Square Footage
2,000
Franchising Since
2009
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Count
1
Litigation Summary
Garbanzo Franchising Co., LLC has no pending or concluded litigation. Its predecessor, Garbanzo Mediterranean Grill Franchising, LLC, had one concluded arbitration proceeding against David Topper (GARBOCA, LLC) that was filed on November 17, 2014. The predecessor alleged Topper breached franchise and area development agreements by failing to comply with the development schedule and closing one franchise unit. The case was settled and dismissed, with all parties released from liability. The predecessor paid Topper $50,000 and agreed to additional payments, including $150,000 upon specific future events, though this $150,000 payment was not assumed by the current franchisor as part of the predecessor's subsequent bankruptcy.
Bankruptcy History
Garbanzo Franchising Co., LLC's predecessor, Garbanzo Mediterranean Grill Franchising, LLC, along with its parent company and affiliates, filed voluntary petitions to reorganize under Chapter 11 bankruptcy on August 12, 2020. This action aimed to resolve outstanding debts and facilitate a sale transaction. The current franchisor, Garbanzo Franchising Co., LLC, acquired substantially all of the predecessor's assets on December 21, 2020. The predecessor's bankruptcy case was dismissed on February 4, 2021, and closed on February 19, 2021.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
Garbanzo Franchising Co., LLC franchisees can renew their franchise for successive 10-year terms if they meet several conditions. These include timely notifying the franchisor in writing (6 to 12 months before expiration), proving the right to operate at the approved location (or an acceptable substitute), completing all necessary maintenance, refurbishing, renovating, updating, and remodeling of the restaurant premises and equipment to meet current system standards at least 90 days before expiration. Franchisees must also be in substantial compliance with all agreements, satisfy all monetary obligations to the franchisor, its affiliates, and major suppliers, and sign the franchisor's then-current franchise agreement, which may have materially different terms. Additionally, they must meet current training requirements at their own expense, sign a general release, and pay a renewal fee of $17,500. The renewal of the Franchise Agreement is at the franchisor's sole discretion.
Training & Support Program
Franchisor Assistance
Garbanzo Franchising Co., LLC provides a range of assistance to its franchisees. Before opening, Garbanzo Franchising Co., LLC helps establish the Development Area for multi-unit owners and loans an electronic copy of the Operations Manuals. It conducts a mandatory Franchise Orientation Seminar (either in-office or via webinar) and provides initial hands-on training (approximately 4 weeks) for the franchisee and their management team (manager and assistant manager), totaling 95 hours. One representative from Garbanzo Franchising Co., LLC will assist with the mock opening of the restaurant. For the first two restaurants, Garbanzo Franchising Co., LLC provides 10 consecutive days of on-site opening assistance with at least two people. Site selection support includes providing a Prototype Design Package (PDP) at no cost, which local architects use to prepare architectural plans for franchisor approval. If a local architect is used, there is a $1,000 plan review fee. Franchisees must also conduct a Grand Opening Advertising Program of at least $15,000, approved by the franchisor. After opening, Garbanzo Franchising Co., LLC offers ongoing consultation and advice via telephone, facsimile, intranet communication, and on-site visits. Additional on-site assistance is available upon request at a cost of $500 per person per day, plus expenses. Garbanzo Franchising Co., LLC may also hold annual conventions or regional meetings, which franchisees are required to attend, covering topics like new developments and operational programs.
Initial Training Hours
95
Training Location
Denver, CO (with virtual components)
Ongoing Support
Garbanzo Franchising Co., LLC provides continuing consultation and advice regarding restaurant management and operation, delivered via telephone, facsimile, intranet communication, and on-site visits. If franchisees request additional on-site assistance, it is available at a cost of $500 per person per day plus expenses. Garbanzo Franchising Co., LLC may also hold an annual convention or regional meeting, which franchisees must attend, covering new developments and operational programs. Failure to attend incurs a $1,000 non-attendance fee.
Franchise Requirements
Ideal Candidate Profile
Garbanzo Mediterranean Fresh seeks franchisees or entities with dedicated principals who are prepared to commit their best efforts to the management and operation of the restaurant, either personally or through a trained manager. Candidates should meet established educational, managerial, and business standards, possess good moral character, a strong business reputation, a satisfactory credit rating, and the aptitude and ability to effectively run the business. Franchisees must also have adequate financial resources and capital to fulfill their operational and financial obligations. The franchise prefers that candidates are not currently operating competing businesses. Garbanzo Mediterranean Fresh also offers opportunities for qualified parties to develop and operate multiple units, indicating a desire for multi-unit owners with strong growth potential.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
Garbanzo Mediterranean Fresh assigns a protected territory to franchisees for their approved restaurant location, but this territory may not be exclusive as the franchisor reserves the right to operate or license others to operate in captive locations (e.g., enclosed shopping centers, airports) within that territory. The exact scope and size of the territory are determined at the franchisor's sole discretion, based on various factors including general location, traffic patterns, parking availability, site size, access, visibility, area demographics, population density, surrounding commercial activity, and market demands. At a minimum, the territory may be limited to the approved location itself. For multi-unit owners, a larger Development Area is mutually agreed upon, which is typically larger than a single-unit territory.
Staffing Notes
Garbanzo Franchising Co., LLC requires that every restaurant always operates under the direct supervision of an Operation Partner, a manager, or an assistant manager who has successfully completed their initial training program. Any new Operation Partner or management personnel must attend this training at the franchisee's expense before taking charge of the restaurant. All personnel with access to proprietary and confidential information, including training materials, must sign a Confidentiality and Restrictive Covenant Agreement.