Risk Score
Pending analysis
Investment Range
$1,239,500 - $2,255,500
Total US Locations
194
Business Summary
Smashburger Franchising LLC offers the right to establish and operate Smashburger restaurants, which are fast-casual eateries. These restaurants feature a menu of gourmet hamburgers, sandwiches, salads, and various other food items and beverages, all served in a casual dining atmosphere.
Corporate History
Smashburger Franchising LLC was established as a Delaware limited liability company in April 2008, which is also when it began offering franchises for Smashburger Restaurants. While the franchisor entity itself does not operate Smashburger Restaurants, its affiliates have been operating them since June 2007. Smashburger is ultimately owned and controlled by Jollibee Foods Corporation (USA) and its parent, Jollibee Foods Corporation (JFC), a company based in the Philippines that also oversees other restaurant brands such as Jollibee, The Coffee Bean & Tea Leaf, and Milksha.
Financial Overview
Investment Range
$1,239,500 - $2,255,500
Franchise Fee (High)
$40,000
Royalty %
5.5%
Marketing %
2.25%
Equipment Costs (Low)
$1,039,000
Equipment Costs (High)
$1,825,000
Working Capital
$15,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Smashburger Franchising LLC's financial condition raises questions about its ability to provide services and support to its franchisees. The company's balance sheets show no cash or cash equivalents for the fiscal years ending December 29, 2024, December 31, 2023, and January 1, 2023. Additionally, its cash flow from operating activities was negative in 2024 and 2022. This financial situation is highlighted as a 'Special Risk' within the Franchise Disclosure Document, advising potential franchisees to consider this carefully.
Financing Details
Smashburger Franchising LLC does not provide any direct or indirect financing to franchisees. The company also does not guarantee any promissory notes, mortgages, leases, or other obligations for its franchisees.
Performance Metrics
Total US Locations
194
Franchised Units
65
Corporate Units
129
Avg Square Footage
1,900
Franchising Since
2008
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Smashburger has been involved in two key litigation cases. One ongoing case, filed on December 2, 2024, by Smalls Sliders IP LLC, alleges that some of Smashburger's trademarks (currently pending registration) are too similar to and infringe upon Smalls Sliders' intellectual property and trademarks. Smalls Sliders is seeking an injunction and unspecified damages, while Smashburger plans to vigorously defend itself and has filed a counterclaim. The other case was a class action lawsuit filed on May 16, 2019, alleging that Smashburger engaged in deceptive trade practices by advertising its 'Triple Double Burger' and 'Double the Beef' as misleading. This case was settled on September 29, 2023, with Smashburger paying $2,500,000 for legal fees, costs, and class member claims, or providing vouchers valued between $2.00 and $2.49.
Bankruptcy History
Smashburger Franchising LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
15 years
Renewal Term
15 years
Renewal Conditions
To renew their Smashburger franchise, franchisees must provide 180 to 270 days prior written notice before the agreement expires. They and their owners must have substantially complied with the franchise agreement throughout its term and be in full compliance at both the time of renewal election and the start of the new term. Franchisees must maintain possession of their restaurant's premises and agree to remodel or update the equipment and the restaurant to meet Smashburger's then-current System Standards. A renewal fee, equal to 50% of the then-current initial franchise fee, is required. Additionally, franchisees and their owners must sign Smashburger's then-current franchise agreement and any related documents, including a general release, which may contain materially different terms and fee requirements.
Training & Support Program
Franchisor Assistance
Smashburger Franchising LLC provides extensive support to its franchisees. Before opening, Smashburger assists with site selection and lease approval, offers at least four weeks of initial training for up to four individuals (including the Managing Owner and Designated Manager), and provides grand opening guidance. This guidance is free for the first two restaurants but reimbursed for subsequent locations. Franchisees also receive access to the Standards of Operations Manual and prototype plans for equipment and signs, along with lists of approved suppliers. During operation, Smashburger advises on System Standards, purchasing requirements, advertising, and marketing programs. They also provide a list of authorized vendors and may set maximum or minimum prices for products, if legally permissible. Smashburger may delegate these obligations to affiliates or third parties and can conduct services virtually.
Initial Training Hours
269
Training Location
At a designated training facility (currently Denver, Colorado) or virtually
Ongoing Support
Smashburger Franchising LLC provides ongoing support to its franchisees, including periodic advice on restaurant operations based on reports and inspections. This guidance covers System Standards, purchasing authorized Operating Assets, and assistance with advertising and marketing materials. Smashburger also provides a list of authorized vendors and may set maximum or minimum prices for products, where permitted by law. Franchisees (or their Managing Owners) and Designated Managers are required to attend various periodic training courses, including those from third parties, and an annual meeting of all Smashburger Restaurant franchise owners (up to four days per year). Additional or special training requested by franchisees is available for a fee. Smashburger may also conduct support, inspections, and training virtually.
Franchise Requirements
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
Limited
Staffing Notes
Smashburger franchisees are solely responsible for all decisions regarding their employees, agents, and independent contractors, including hiring, firing, training, and compensation, in compliance with federal, state, and local employment laws. The Managing Owner (or a board-approved Designated Manager) must supervise the restaurant's management and operations. While Smashburger sets minimum employee training requirements to protect its brand, the franchisee is exclusively responsible for conducting and ensuring appropriate staff training. Smashburger's System Standards may regulate staffing levels, qualifications, uniforms, and appearance, but the franchisee retains full authority over other employment matters. Employees with access to confidential information may be required to sign a non-disclosure agreement approved by Smashburger.