Texas Roadhouse Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$3,894,500 - $7,901,500
Franchise Fee
$40,000
Min Cash Required
$800,000
Total US Locations
638
Business Summary
Texas Roadhouse Development Corporation offers franchises to own and operate Texas Roadhouse restaurants. These restaurants feature a specialized menu of steaks and ribs, other food items, and full bar service. They operate using a distinctive system that includes specific exterior and interior design, decor, color schemes, furnishings, unique recipes and menu items, and uniform operational standards for quality, inventory, management, and marketing programs.
Corporate History
Texas Roadhouse Development Corporation was incorporated in Kentucky on June 21, 1995. It has been a wholly owned subsidiary of Texas Roadhouse, Inc. since October 8, 2004. The first Texas Roadhouse restaurant opened in Clarksville, Indiana in February 1993, with company-owned restaurants now operated by its affiliates. Texas Roadhouse Development Corporation has offered franchises for Texas Roadhouse Restaurants since 1995 and also offers licensed retail products. Its affiliates also operate other restaurant concepts like Jaggers and Bubba's 33.
Financial Overview
Investment Range
$3,894,500 - $7,901,500
Franchise Fee (Low)
$40,000
Franchise Fee (High)
$40,000
Minimum Cash Required
$800,000
Minimum Net Worth
$800,000
Royalty %
4%
Marketing %
0.3%
Equipment Costs (Low)
$2,470,000
Equipment Costs (High)
$5,120,000
Working Capital
$621,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Texas Roadhouse, Inc., the parent company of Texas Roadhouse Development Corporation, maintains a strong financial position, as evidenced by an unqualified opinion from its independent auditors on its consolidated financial statements. In 2023, the company reported a net income of $304.876 million. It also has substantial liquidity, with $295.3 million available under its revolving credit facility as of December 26, 2023. No 'going concern' qualifications were noted by the auditors, indicating confidence in the company's ability to continue operations.
Financing Details
Texas Roadhouse Development Corporation does not offer any direct or indirect financing to its franchisees. It also does not guarantee any franchisee's notes, leases, or other obligations.
Performance Metrics
Total US Locations
638
Franchised Units
56
Corporate Units
582
Avg Square Footage
8,750
Franchising Since
1995
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Texas Roadhouse Development Corporation has no litigation history to report in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
Texas Roadhouse Development Corporation has no bankruptcy history to report in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, Texas Roadhouse Development Corporation franchisees must provide written notice between 6 and 12 months before the current term expires. They are required to repair or replace equipment and update the restaurant premises to meet current brand standards. Franchisees must also be in good standing, having complied with all agreements with Texas Roadhouse Development Corporation and its affiliates, and having timely satisfied all financial obligations. Additionally, they must have the right to remain in possession of the restaurant premises, pay a renewal fee (the greater of 30% of the then-current initial franchise fee or $15,000, plus expenses), sign Texas Roadhouse Development Corporation's then-current franchise agreement, execute a general release of claims, and fulfill current qualification and training requirements.
Training & Support Program
Franchisor Assistance
Texas Roadhouse Development Corporation provides various types of assistance to its franchisees. Before opening, they offer written site selection guidelines and on-site evaluations for site approval. Franchisees receive prototypical architectural and design plans and access to operational manuals. Texas Roadhouse Development Corporation may also offer licenses for certain computer software at a reasonable cost, along with ongoing support and updates. For the grand opening, a trained crew provides 15 to 20 days of on-site pre-opening and opening training, supervision, and assistance. After opening, ongoing support includes periodic quality inspections, marketing and promotional materials, advice and written guidance on restaurant management techniques, and lists of approved suppliers. Texas Roadhouse Development Corporation may require Operating Principals, Managers, and other personnel to attend additional training programs and seminars, and can provide on-site remedial training if deemed appropriate. They also manage the Texas Roadhouse Marketing Fund and may establish marketing cooperatives.
Initial Training Hours
654
Training Location
Louisville, Kentucky
Ongoing Support
After opening, Texas Roadhouse Development Corporation franchisees receive ongoing support through various channels. This includes regular visits to the restaurant for quality inspections of products and services. The franchisor provides marketing and promotional materials developed for local marketing, available at a reasonable cost. Franchisees also receive advice and written materials on restaurant management and operational techniques, including updates on equipment and food products. Texas Roadhouse Development Corporation makes certain branded merchandise, like pre-packaged food and memorabilia, available for resale at a reasonable cost. Franchisees are provided with updated lists of approved suppliers. The franchisor may require the Operating Principal, Market Partner, Managers, and other restaurant personnel to attend additional training programs and seminars. On-site remedial training for restaurant personnel is available upon reasonable request or if deemed appropriate by the franchisor. Furthermore, Texas Roadhouse Development Corporation establishes and administers a Marketing Fund for national or regional marketing and may establish marketing cooperatives.
Franchise Requirements
Ideal Candidate Profile
Texas Roadhouse Development Corporation seeks qualified individuals and entities with significant equity, requiring not less than $800,000 or 25% of the total estimated project cost, whichever is higher, for each restaurant. Franchisees must designate an Operating Principal who holds an ownership interest, devotes substantial full-time efforts to supervising the business, and meets Texas Roadhouse Development Corporation's standards and criteria. A Managing Partner is required for daily operation, must commit full-time efforts, pass background checks, and meet educational and business experience criteria. For multi-unit franchisees (starting with the second restaurant), a Market Partner is required to supervise up to eight restaurants, also committing full-time, meeting educational and business criteria, and potentially holding an ownership interest.
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
Texas Roadhouse Development Corporation's assigned areas are site-specific and can range from the restaurant location itself up to a maximum radius of 10 miles from the restaurant. The specific size is determined by various market and economic factors including demographics, market penetration, site availability, and growth trends.
Staffing Notes
Texas Roadhouse Development Corporation requires franchisees to implement a structured staffing model with specific roles. This includes an Operating Principal, who must be a Controlling Principal, hold an ownership interest, and dedicate substantial full-time effort to supervising the overall business. A Managing Partner is essential for the daily operation and management of the restaurant, requiring a full-time commitment, adherence to educational and business experience criteria, successful background checks, and competitive compensation that includes a bonus or profit-sharing component. For franchisees operating multiple units (starting with their second restaurant), a Market Partner is required to supervise up to eight restaurants, also dedicating full-time effort and meeting specific educational and business criteria. All employees, including additional managers and support personnel, must meet specified qualifications, receive initial and supplemental training, maintain good customer relations, and comply with a prescribed dress code. Staffing levels and operational requirements for these positions are outlined in the Manuals.