Risk Score
Pending analysis
Investment Range
$1,075,000 - $2,740,000
Franchise Fee
$16,000
Min Cash Required
$25,000
Total US Locations
114
Business Summary
Village Inn is a sit-down family dining concept that offers a variety of menu items across all meal periods. It specializes in breakfast items such as pancakes, omelets, skillets, eggs, and pies.
Corporate History
VI BrandCo, LLC was formed as a Delaware limited liability company on August 17, 2020, and began franchising the Village Inn restaurant brand in September 2021. Its direct parent is VI OpCo, LLC. In July 2021, BBQ Holdings, Inc. acquired VI BrandCo, LLC and its affiliated entities. BBQ Holdings, Inc. subsequently merged with MTY Food Group, Inc. in September 2022, making MTY Franchising USA, Inc. its parent. The Village Inn brand itself has a longer history, with VICORP Restaurants, Inc. first owning and operating Village Inn restaurants in 1959 and granting its first franchise on April 1, 1961. American Blue Ribbon Holdings, LLC (ABRH) later purchased substantially all of Village Inn's restaurant chain assets in March 2009. ABRH filed for Chapter 11 bankruptcy in January 2020, and in October 2020, VI BrandCo, LLC acquired the Village Inn-related trademarks and existing franchise agreements through bankruptcy proceedings.
Financial Overview
Investment Range
$1,075,000 - $2,740,000
Franchise Fee (Low)
$16,000
Franchise Fee (High)
$35,000
Minimum Cash Required
$25,000
Royalty %
4%
Marketing %
1%
Equipment Costs (Low)
$200,000
Equipment Costs (High)
$585,000
Working Capital
$75,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Village Inn's parent company, MTY Franchising USA, Inc., reported a net loss of $12,556 thousand in the fiscal year ending November 30, 2024, a significant change from a net income of $16,978 thousand in 2023. The company also recognized substantial impairment charges totaling $43,602 thousand in 2024, which included $29,685 thousand for goodwill, $6,150 thousand for property, plant, and equipment, and $6,679 thousand for intangible assets. Despite these losses and impairment charges, the independent auditor provided an unqualified opinion, indicating the financial statements are presented fairly in all material respects. The company's cash position decreased from $21,138 thousand in 2023 to $12,834 thousand in 2024.
Financing Details
Village Inn does not typically offer direct or indirect financing to new franchisees, nor does it guarantee their notes, leases, or other obligations. Franchisees are responsible for securing their own financing.
Performance Metrics
Total US Locations
114
Franchised Units
88
Corporate Units
26
Avg Square Footage
31,250
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
20
Litigation Summary
Village Inn's litigation history includes a variety of cases involving its affiliates, predecessors, and franchisees, as well as some administrative actions. Recently, in 2024, two lawsuits were filed by Kahala Franchising, L.L.C. (an affiliate) against franchisees for breach of contract and forcible entry and detainer. Historically, there have been numerous concluded arbitrations and litigations involving various predecessor and affiliate brands such as The Extreme Pita, Kahala Franchising, SweetFrog, Fresh Enterprises, Famous Dave's, and Papa Murphy's. These cases ranged from allegations of misrepresentation, breach of contract, and unfair practices to trademark violations and bankruptcy-related claims. Most of these historical cases were settled or dismissed. For instance, a 2014 Papa Murphy's case involving multiple franchisees alleging misrepresentations about financial performance and marketing obligations was settled with various outcomes, including payments to plaintiffs and store purchases by Papa Murphy's. Administrative actions have also been concluded regarding registration and disclosure violations in states like Maryland and Virginia for predecessors like SweetFrog, Maui Wowi, and BF Acquisition Holdings.
Bankruptcy History
Village Inn's predecessor, American Blue Ribbon Holdings, LLC (ABRH), filed for Chapter 11 bankruptcy protection in January 2020 as part of a planned restructuring of company-owned restaurants. This bankruptcy case was confirmed in September 2020 and terminated in October 2021. Additionally, Village Inn's Co-Chief Operating Officer, Adam Lehr, filed for personal Chapter 13 bankruptcy in January 2018, which was discharged in June 2021.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, Village Inn franchisees must provide written notice between 6 and 12 months before their initial term expires. They must demonstrate the right to possess the licensed location for the extended term, be in good standing without any defaults under the agreement or any other agreements with Village Inn or its affiliates, and must not have received a notice of default within the three-year period prior to giving notice to renew. Franchisees will also need to sign the then-current form of Village Inn franchise agreement, which may contain materially different fees, terms, and conditions. A renewal/extension fee equal to 50% of the then-current initial franchise fee (without discounts) is required, along with satisfying eligibility requirements for new franchises. Franchisees must also upgrade or remodel their restaurant to conform with Village Inn's most current prototype, design, standards, and specifications, and sign a general release of all claims against Village Inn and its affiliates.
Training & Support Program
Franchisor Assistance
Village Inn provides pre-opening assistance by evaluating business sites and approving leases. It offers franchisees prototypical architectural plans and specifications for restaurant construction, which must be adapted to local codes, and also provides general advice on equipment and supplies. Village Inn approves marketing and grand opening plans, requiring a minimum $10,000 spend on the grand opening. An on-site opening assistance team, consisting of at least 10 people, is provided for a minimum of 18 business days during the pre- and post-opening period to help facilitate the opening and train personnel. Franchisees reimburse travel, lodging, and meals for this team, but not salaries. For ongoing support, Village Inn provides training for the Director of Operations and two managers, without tuition fees, though franchisees cover employee costs. It may offer continuing assistance through manuals, supplements, bulletins, and periodicals, and periodically offers training programs (not more than once a year) on various operational aspects, which franchisees may be required to attend at their own expense. Village Inn may also make information available regarding new products, services, or methods.
Initial Training Hours
550
Training Location
A certified training restaurant in Colorado or other designated training restaurant
Ongoing Support
After opening, Village Inn offers ongoing support by providing training for the franchisee's Director of Operations and two managers, with no tuition fees, though franchisees cover their employees' costs. It may also provide continuing assistance through updated operations manuals, supplements, bulletins, and periodicals. Training programs are periodically offered (not more than once a year) on various aspects of restaurant operations, which franchisees may be required to attend, covering their own expenses. Additionally, Village Inn may make information available regarding any new product, service, or updated method of doing business.
Franchise Requirements
Ideal Candidate Profile
Village Inn seeks franchisees who are approved to be a Director of Operations and who can successfully complete the management training program, taking primary responsibility for restaurant operations. They must also employ at least two additional approved and trained managers. Ideal candidates for Village Inn restaurants should demonstrate financial capability, relevant work experience and aptitude, the ability to dedicate their time and best efforts to the restaurant, and sufficient English language skills to communicate effectively with staff, customers, and suppliers.
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
Territory Size Requirements
Village Inn territories are defined as a three-mile radius around the approved restaurant location.
Staffing Notes
Village Inn requires franchisees to designate a Director of Operations who completes their training and is primarily responsible for the restaurant's operations. The franchisee can fill this role if they meet the requirements. In addition to the Director of Operations, Village Inn requires the employment of at least two full-time managers who are approved by Village Inn and have successfully completed its manager training program. One of these three individuals (Director of Operations or one of the managers) must serve as the General Manager, responsible for direct on-premises day-to-day supervision of the restaurant, but cannot be a General Manager for more than one Village Inn restaurant. Another individual must provide on-premises supervision in the General Manager's absence. Franchisees are responsible for training all other employees in system standards, methods, and techniques, and are solely liable for all hiring, firing, and personnel decisions.