Samurai Sam's Teriyaki Grill Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$112,660 - $623,300
Franchise Fee
$4,000
Min Cash Required
$5,000
Total US Locations
12
Business Summary
Samurai Sam's Teriyaki Grill offers unit franchises for quick-service restaurants specializing in Japanese fast food and related menu items. Franchisees operate a single restaurant, which can be either a traditional unit located in venues like shopping malls or strip centers offering a full menu, or a non-traditional unit situated in marketplaces such as airports, hospitals, or kiosks, typically offering a more limited menu. The restaurants prepare and serve Japanese-style food and beverages to the general public.
Corporate History
The Samurai Sam's Teriyaki Grill brand began offering franchises in 1995 under SP Franchising, Inc. In 2003, Kahala Franchising, L.L.C. purchased the predecessor, with franchising continuing under Kahala Franchise Corp. from 2004 to March 2010, and then under Kahala Franchising, L.L.C. since August 2010. Kahala Franchising, L.L.C. itself was formed in Arizona in 2008. The company is now part of the larger MTY Food Group, Inc., following a merger in 2016. MTY Food Group, Inc. is a publicly-traded company that franchises over 50 different restaurant concepts, including brands like Cold Stone Creamery, Pinkberry, Papa Murphy's, Famous Dave's, and Wetzel's Pretzels, which are offered by Kahala Franchising, L.L.C. or its affiliates.
Financial Overview
Investment Range
$112,660 - $623,300
Franchise Fee (Low)
$4,000
Franchise Fee (High)
$30,000
Minimum Cash Required
$5,000
Royalty %
6%
Marketing %
2.5%
Equipment Costs (Low)
$226,000
Equipment Costs (High)
$479,000
Working Capital
$12,500
Audited Financials
Yes
Offers Financing
Yes
Financial Health Notes
Item 21 for Samurai Sam's Teriyaki Grill indicates that the franchisor itself does not provide separate financial statements. Instead, audited consolidated financial statements of its parent company, MTY Franchising USA, Inc. (referred to as the "Guarantor"), are attached. MTY Franchising USA, Inc. provides an absolute and unconditional performance guaranty, ensuring it will assume the franchisor's duties and obligations under franchise registrations and agreements. This guarantee remains in effect until all obligations are satisfied or discharged. This structure implies that the financial health and backing for Samurai Sam's Teriyaki Grill ultimately derive from its larger parent entity.
Financing Details
Samurai Sam's Teriyaki Grill generally does not offer direct or indirect financing. However, in specific circumstances, financing may be available from the franchisor's affiliates. If a franchisee purchases an existing corporate-owned restaurant from an affiliate, the affiliate may finance up to 100% of the purchase price. The interest rate for such financing can range from 0% to 12%, determined by factors like the franchisee's creditworthiness and the initial down payment. Repayment terms typically span 12 to 60 months in equal monthly installments. This financing is secured by a first-position lien on all equipment. Additionally, if required by a landlord, the franchisor or an affiliate may, at their discretion, agree to guarantee a franchisee's lease, for which the franchisee would pay a lease guarantee fee equal to 10% of the total guaranteed rental obligations, up to a maximum of $10,000.
Performance Metrics
Total US Locations
12
Franchised Units
12
Corporate Units
0
Avg Square Footage
900
Franchising Since
2003
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
21
Litigation Summary
Samurai Sam's Teriyaki Grill, through its parent company and affiliates, has a notable legal history. This includes lawsuits from franchisees alleging issues like misrepresentation of financial performance, breach of contract, and violations of franchise laws. Several of these cases resulted in settlements or awards to franchisees. Additionally, there have been state administrative actions against predecessors and affiliates for non-compliance with franchise registration and disclosure laws, leading to fines and offers of rescission. Most recently, within the fiscal year ending November 30, 2024, Kahala Franchising, L.L.C. itself initiated two lawsuits against franchisees for breach of contract and forcible entry and detainer.
Bankruptcy History
Samurai Sam's Teriyaki Grill's Item 4 states that no bankruptcy information is required to be disclosed in this item. However, Item 3 mentions that Ranch*1, Inc., an affiliate, filed for Chapter 11 Bankruptcy Protection in 2001. It also notes a Chapter 7 bankruptcy proceeding from 2015 against the franchisor's Chief Executive Officer and Chief Concept Officer, which was settled in 2019.
Agreement Terms
Renewal Term
5 years
Renewal Conditions
To renew their Samurai Sam's Teriyaki Grill franchise agreement, franchisees must provide at least 120 days' notice before the current term expires. They must be in good standing, meaning they are not in default of their agreement or any other agreements with the franchisor or its affiliates, and have not received more than three default notices during the term (or more than two in the five years preceding renewal). Franchisees must either have the right to keep their current approved location or secure a suitable new one. Additionally, they are required to sign a new franchise agreement, which may contain materially different terms, pay a renewal franchise fee, undertake any necessary remodeling or refurbishing, and sign a general release. All financial obligations to the franchisor must be current.
Training & Support Program
Franchisor Assistance
Samurai Sam's Teriyaki Grill provides pre-opening assistance, including reviewing proposed locations, leases, and purchase agreements, though the franchisee is ultimately responsible for site selection. The franchisor provides design drawings and specifications for construction and identifies approved suppliers for equipment and supplies. Franchisees receive a comprehensive Training Program, consisting of 40 hours of classroom training (online or at corporate offices in Scottsdale, AZ) and 40 hours of in-store training in the metropolitan Phoenix, AZ area. Post-opening, the franchisor offers a representative for up to five days during the grand opening, maintains a continuous advisory relationship on business operations, provides updated operating standards, and conducts periodic inspections. Samurai Sam's Teriyaki Grill also manages a national Advertising Fund for marketing campaigns, and requires franchisees to use an approved POS system with dedicated help desk support, as well as an approved mobile app and online ordering service.
Initial Training Hours
80
Training Location
Online, Corporate offices in Scottsdale, AZ, or metropolitan Phoenix, AZ area
Ongoing Support
After opening, Samurai Sam's Teriyaki Grill provides several types of ongoing support to its franchisees. This includes a representative visiting during the grand opening week for up to five days to assist with initial operations and marketing. Samurai Sam's Teriyaki Grill maintains a continuous advisory relationship, offering consultation and guidance on marketing, merchandising, and general business operations. The franchisor provides updated operating standards and conducts periodic inspections and quality service checks to maintain consistent standards. Franchisees also have access to information on software for administrative, bookkeeping, accounting, and inventory control. The franchisor may also hold refresher training programs, conferences, and seminars, which franchisees are required to attend, possibly incurring a registration fee and travel expenses. Additionally, Samurai Sam's Teriyaki Grill requires the use of an approved POS system, provides POS Help Desk Phone Support maintenance, and mandates approved debit/credit card and Gift/Loyalty Card processing systems, along with an approved mobile application and online food ordering service.
Franchise Requirements
Ideal Candidate Profile
Samurai Sam's Teriyaki Grill seeks franchisees who are not looking for a passive investment but intend to actively participate in the direct operation and daily affairs of their restaurant, demonstrating strong business skill and judgment, especially in hiring. The ideal candidate, or a designated manager, must be a qualified restaurant operator, dedicate full-time effort to managing and developing the business, and possess sufficient English language proficiency to communicate effectively with employees and customers. While the franchisee is not explicitly required to personally participate full-time if a qualified manager is in place, passive investment is strongly discouraged.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Staffing Notes
Samurai Sam's Teriyaki Grill franchisees are responsible for all aspects of employee management, including hiring, firing, training, supervising, and setting employment terms. Franchisees must employ at least one full-time, on-premises manager who meets the franchisor's criteria as a qualified restaurant operator, has no equity interest requirement, and dedicates their entire time during normal business hours to managing and developing the business. This manager, and all employees interacting with customers, must be proficient in English. All personnel are required to maintain high standards of sanitation, cleanliness, and demeanor, and wear approved uniforms. A manager capable of reading and understanding franchisor materials and communicating with staff and customers in English must be present during each shift.