Nathan's Famous (BMP) Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$41,500 - $287,600
Franchise Fee
$3,750
Total US Locations
180
Business Summary
Nathan's Famous Systems, Inc. offers franchises that allow other food service establishments to add a menu-line extension featuring Nathan's Famous hot dogs, crinkle-cut french fries, and other approved fast-service items. These operations, called Branded Menu Program Operations (BMP Operations), integrate Nathan's Famous products into an existing or new food service establishment. The company also offers the option to add Arthur Treacher's menu items as a separate Branded Menu Program Operation.
Corporate History
Nathan's Famous Systems, Inc. was incorporated in Delaware in December 1993 and assumed the franchise operations for Nathan's Famous restaurants from its parent company. Its direct parent, Nathan's Famous Operating Corp. (NFOC), originally started as a sole proprietorship in 1916 and was incorporated in New York in 1925, later reincorporated in Delaware in 1989. NFOC operated company-owned Nathan's Famous Restaurants continuously since 1916 and offered franchises from 1968 until December 1993. Nathan's Famous Systems, Inc. began offering franchises for its Branded Menu Program Operations (BMP Operations) in October 2006. The company also licenses third parties to manufacture and sell branded products for groceries and direct-to-consumer sales. An affiliate, NF Treachers Corp., acquired the Arthur Treacher's brand in 2006, and Nathan's Famous Systems, Inc. began offering Arthur Treacher's BMP Operations in December 2009.
Financial Overview
Investment Range
$41,500 - $287,600
Franchise Fee (Low)
$3,750
Franchise Fee (High)
$7,500
Equipment Costs (Low)
$21,500
Equipment Costs (High)
$222,600
Working Capital
$15,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Nathan's Famous Systems, Inc. appears to be in good financial health. Its current assets of $15,634,501 exceed its current liabilities of $7,824,175, indicating a strong working capital position. The independent auditors have issued an unqualified opinion on the company's financial statements, and no concerns about its ability to continue as a going concern have been noted.
Financing Details
Nathan's Famous Systems, Inc. does not offer any direct or indirect financing options to its franchisees, nor does it guarantee any financial obligations like notes or leases for them. The company also does not intend to sell, assign, or discount any franchisee financing arrangements to a third party.
Performance Metrics
Total US Locations
180
Franchised Units
176
Corporate Units
4
Franchising Since
1993
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Nathan's Famous Systems, Inc. had one past legal issue in October 2006. This involved a Consent Order with the Minnesota Department of Commerce because Nathan's Famous Systems, Inc. unintentionally signed a franchise agreement in Minnesota when it was not registered there. As a result, the company paid a $1,000 civil penalty and agreed to follow Minnesota's Franchise Law in the future. Other than this resolved matter, Nathan's Famous Systems, Inc. has no other litigation required to be disclosed.
Bankruptcy History
Nathan's Famous Systems, Inc. has no bankruptcy history to disclose.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
Nathan's Famous Systems, Inc. franchisees have no contractual right to renew their License Agreement; renewal is subject to mutual agreement between the franchisee and Nathan's Famous Systems, Inc. If both parties agree to extend the term, the franchisee must pay a renewal fee of $3,750 and meet other unspecified requirements.
Training & Support Program
Franchisor Assistance
Nathan's Famous Systems, Inc. provides limited assistance to its franchisees. Before opening, Nathan's Famous Systems, Inc. will provide specifications and standards that the franchisee must follow to establish and operate a Branded Menu Program Operation. For continuing operations, Nathan's Famous Systems, Inc. will make its branded products available for franchisees to purchase for sale at their food service establishment.
Ongoing Support
Nathan's Famous Systems, Inc. does not provide any initial or ongoing training to Branded Menu Program Operations. The primary ongoing support consists of making branded products available for franchisees to purchase for sale.
Franchise Requirements
Ideal Candidate Profile
Nathan's Famous Systems, Inc. seeks operators who already own an existing food service business and are experienced in operating that type of establishment. Franchisees should anticipate the Branded Menu Program Operation will be an extension of their existing business, accounting for no more than twenty percent of their overall gross sales. While active personal participation is encouraged, it is not required for daily operations.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Nathan's Branded Menu Program Operations do not receive an exclusive territory. Operators are authorized to run one BMP Operation from a single approved location and cannot relocate it without Nathan's prior written consent. Nathan's maintains the right to establish other franchised or company-owned outlets, including additional Branded Menu Program Operations and Nathan's Famous Restaurants, anywhere, regardless of proximity to an existing operation. They may also grant licenses for remote kitchens in close proximity to a franchisee's Restaurant. There are no specific size or geographic criteria provided for the area around a Branded Menu Program Operation.
Staffing Notes
Nathan's does not provide specific staffing requirements or employee structure details for its Branded Menu Program Operations. The License Agreement does not require the operator to personally participate in the direct operation of the Branded Menu Program Operation, although Nathan's encourages and recommends active participation. No restrictions are imposed on the operator's managers. While operators must adhere to Nathan's operating standards related to management and personnel, the Franchise Disclosure Document does not elaborate on specific job roles, qualifications, or operational staffing needs for these Branded Menu Program Operations. Nathan's also does not provide any initial or ongoing training to Branded Menu Program Operations.