The Flame Broiler Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$411,278 - $714,774
Franchise Fee
$25,000
Total US Locations
132
Business Summary
Flame Broiler operates quick counter service restaurants specializing in family-style Korean food and other food and beverage items. These restaurants offer both carry-out and on-premises dining. The brand is known for its distinctive system, which includes unique store layouts, specific recipes (including proprietary teriyaki sauce), and standardized operating procedures for everything from food preparation to marketing.
Corporate History
Flame Broiler, Inc. was incorporated in California on June 27, 1996. The company began offering franchises for its quick-service Korean food restaurants in June 1999. Flame Broiler also operated company-owned restaurants from October 2001 to 2015, and resumed operating company-owned locations in June 2019, with 12 such restaurants as of December 31, 2023. The brand has developed proprietary products like its teriyaki sauce and a distinctive operating system.
Financial Overview
Investment Range
$411,278 - $714,774
Franchise Fee (Low)
$25,000
Franchise Fee (High)
$35,000
Royalty %
5%
Marketing %
3%
Equipment Costs (Low)
$267,516
Equipment Costs (High)
$379,665
Working Capital
$101,002
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Flame Broiler's financial statements for 2021, 2022, and 2023 have received an unqualified opinion from independent auditors, indicating that the financial position is presented fairly in all material respects. The company shows positive net income for these years, with significant cash balances. There are no mentions of going concern issues or significant financial difficulties.
Financing Details
Flame Broiler does not directly offer financing to its franchisees. However, in limited instances, an affiliate, the Young R. Lee and Sarah J. Lee Family Trust, may act as the landlord and lease the restaurant premises to a franchisee. This lease typically has a 20-year term with monthly payments ranging from 6% to 10% of net sales. The only security required is a personal guarantee of the lease by the franchisee and their spouse, or by all shareholders of the corporation. Default on the lease could lead to termination, early termination damages, and collection costs.
Performance Metrics
Total US Locations
132
Franchised Units
120
Corporate Units
12
Avg Square Footage
750
Franchising Since
1999
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Flame Broiler has a clean legal record with no litigation cases or legal disputes to report.
Bankruptcy History
Flame Broiler has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their Flame Broiler franchise, franchisees must provide written notice between three and six months before the current agreement expires. They must be in good standing, meaning they have not defaulted and have substantially complied with the Franchise Agreement throughout its term. Franchisees are also required to remodel and upgrade their premises to meet current brand standards, complete any necessary training, pay a $5,000 renewal fee, and sign a general release. The renewal may involve signing a new franchise agreement with different terms and conditions, such as revised fee structures and territorial rights.
Training & Support Program
Franchisor Assistance
Flame Broiler provides comprehensive support to its franchisees. Before opening, Flame Broiler assists with site and lease acceptance, offers basic market analysis and site designation guidance, and provides conceptual designs for the restaurant. Franchisees and one other senior manager receive up to 12 weeks of initial training. They also receive an operations manual, site selection guidelines, and lists of approved suppliers and products. After opening, Flame Broiler provides a representative for up to one week to assist with the grand opening. Ongoing support includes approving local advertising, administering the advertising fund, and periodically updating lists of approved supplies and suppliers. Flame Broiler also modifies the System, including new menu items and equipment, regulates quality standards, helps negotiate supplier rates, and offers general advice and guidance on restaurant operations, including pricing. Periodic visits to the restaurant are conducted, with written reports provided to outline suggested improvements or identify defaults.
Initial Training Hours
480
Training Location
Franchisor's headquarters or a Franchisor-owned/franchised restaurant in Southern California
Ongoing Support
After opening, Flame Broiler provides a representative for up to one week to assist with the grand opening. The franchisor approves all local advertising and manages the advertising fund. Flame Broiler also periodically updates its lists of approved supplies and suppliers and may modify the overall System to include new menu items, equipment, or techniques. The company regulates quality standards across all restaurants and works to negotiate competitive rates with suppliers. Flame Broiler conducts periodic visits to restaurants, providing written reports with suggested improvements. Additionally, ongoing refresher training programs, totaling 5 business days/40 hours per year, are required, with franchisees covering their own expenses for attendance. Training for new or additional managers after the initial program is available at current published rates.
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
full-time
Territory Type
Non-Exclusive
Staff Count
7
Staffing Notes
Flame Broiler requires franchisees to adequately staff their restaurants to meet customer needs and support business growth. While the exact number of employees can vary based on operational volume, the minimum staffing includes having a properly trained manager or a 'person in charge' (PIC) on-site at all times when the franchisee is not present. This PIC must have completed all required training and uphold Flame Broiler's operational standards. Franchisees are responsible for all hiring decisions and ensuring their employees meet legal requirements.