Risk Score
Pending analysis
Investment Range
$1,445,000 - $3,810,500
Franchise Fee
$28,000
Total US Locations
969
Business Summary
Zaxbys operates quick-casual dining restaurants known for chicken fingers, buffalo wings, salads, sandwiches, and unique Zaxbys-brand sauces. Zaxbys offers various dining options, including dine-in, carry-out, drive-thru, and delivery through phone, online orders, and a mobile application. Each Zaxbys Restaurant uses a distinctive business format, proprietary operating system, unique trade dress, recipes, and specific standards for restaurant design, equipment, supplies, and marketing.
Corporate History
Zaxbys SPE Franchisor LLC was formed in Delaware in April 2021 and started franchising Zaxbys Restaurants in July 2021. The current franchisor exclusively handles Zaxbys franchising and has never operated its own restaurants. The brand's franchising history dates back to 1994 through its predecessor, Zaxby's Franchising LLC (ZFL), which offered Zaxbys franchises until June 2021. In June 2021, a securitization transaction transferred all existing franchise agreements and intellectual property from ZFL to the current franchisor, Zaxbys SPE Franchisor LLC. The brand's ultimate parent is Craveability Parent LLC, owned by investment funds managed by affiliates of The Goldman Sachs Group Inc., following a restructuring in December 2020. ZFL and Restaurant System Solutions SPE LLC (RSS), an affiliate, continue to provide support services to franchisees on behalf of Zaxbys SPE Franchisor LLC.
Financial Overview
Investment Range
$1,445,000 - $3,810,500
Franchise Fee (Low)
$28,000
Franchise Fee (High)
$35,000
Royalty %
6%
Marketing %
4%
Equipment Costs (Low)
$1,318,500
Equipment Costs (High)
$3,249,500
Working Capital
$48,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Zaxbys SPE Franchisor LLC is financially healthy and has received an unqualified audit opinion for its financial statements. The auditors have confirmed that there are no conditions or events that raise substantial doubt about Zaxbys SPE Franchisor LLC's ability to continue as a going concern. Zaxbys SPE Franchisor LLC acts as a guarantor for a significant amount of debt, totaling over $1.1 billion as of December 29, 2024, incurred in connection with a securitization transaction. Despite this, the company was in compliance with all financial covenants related to this debt at the end of fiscal year 2024.
Financing Details
Zaxbys SPE Franchisor LLC does not offer any direct or indirect financing to franchisees. The company also does not guarantee franchisees' leases or other financial obligations.
Performance Metrics
Total US Locations
969
Franchised Units
826
Corporate Units
143
Avg Square Footage
2,300
Franchising Since
1994
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Zaxbys has no litigation to report, as no litigation is required to be disclosed in Item 3 of the FDD.
Bankruptcy History
Zaxbys has no bankruptcy history to report, as no bankruptcy information is required to be disclosed in Item 4 of the FDD.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew, Zaxbys franchisees must notify the franchisor between 6 and 12 months before their agreement expires. Franchisees, their owners, and affiliates must be in good standing, meaning they have fully complied with all agreements, have no overdue payments, and no pending lawsuits or disputes with Zaxbys or its affiliates and suppliers. Franchisees must also agree to upgrade, refurbish, or remodel their restaurant to meet Zaxbys's current standards, which could include a complete rebuild. They must complete any required renewal training and sign a general release of claims against Zaxbys and its affiliates. Additionally, franchisees must prove they can keep their location for the entire renewal term, provide any updated information Zaxbys requests, pay a renewal fee, and sign Zaxbys's current Franchise Agreement, which may have different terms.
Training & Support Program
Franchisor Assistance
Before a Zaxbys Restaurant opens, Zaxbys SPE Franchisor LLC provides access to its confidential operations manual and assists with site selection by reviewing location information and proposed site agreements. Zaxbys SPE Franchisor LLC also reviews and approves architects, contractors, engineers, and project managers, and provides prototype construction plans. The franchisor reviews and accepts architectural drawings, provides detailed operational specifications, conducts initial training for managers, and approves the initial marketing plan. Final written authorization is given to open the restaurant after all pre-opening requirements are met. During operation, Zaxbys SPE Franchisor LLC offers ongoing support by providing updates on system developments, managing expenditures for local marketing (ZMAA and Marketing Fund), and periodically updating the operations manual. The franchisor also coordinates ongoing training programs and meetings, evaluates restaurant operations for compliance, and negotiates supplier arrangements. All promotional and marketing programs and materials are reviewed and approved by Zaxbys SPE Franchisor LLC.
Initial Training Hours
433
Training Location
Zaxbys Support Center in Atlanta, Georgia, online through Zaxbys University, and at a designated Certified Training Facility.
Ongoing Support
Zaxbys SPE Franchisor LLC provides ongoing support to its franchisees through various channels. This includes regularly updating them on new system developments and operational improvements. The franchisor manages expenditures for local marketing activities through the Zaxby's Multi-DMA Advertising Association and the broader Marketing Fund. The operations manual is periodically updated, serving as a continuous resource. Zaxbys SPE Franchisor LLC also organizes and conducts additional training programs and meetings for franchisees, managers, Designated Principals, and Key Operators, requiring attendance at up to two annual meetings. While training materials are provided, franchisees cover their own travel and living expenses. Field support is provided through regular evaluations of restaurant operations to ensure compliance with brand standards. Zaxbys SPE Franchisor LLC also negotiates supplier arrangements and offers help desk support for its technology systems and digital platform at no extra cost.
Franchise Requirements
Ideal Candidate Profile
Zaxbys SPE Franchisor LLC seeks qualified candidates to operate its restaurants. If the franchisee is an entity, the Designated Principal must be an owner with at least a 25% ownership interest, having full authority over all business decisions for the restaurant and the power to legally bind the franchisee. This individual must successfully complete required training. Additionally, each franchisee must appoint an approved Key Operator, who will oversee the day-to-day operations, including standards and financial performance, for all of the franchisee's Zaxbys Restaurants within the same geographic area. The Key Operator must dedicate full-time effort to this role, refrain from other substantial management responsibilities, and successfully complete the training program. All owners must also possess good moral character.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Absentee Allowed
Territory Type
Protected
Territory Size Requirements
Zaxbys defines its Protected Area for a single restaurant location at its sole discretion, typically a minimum of a 0.25-mile radius around the restaurant. The exact size for each location can vary based on factors like the number of households, traffic count, foot traffic, local competition, accessibility, population density, and other demographic details. For franchisees entering a Development Agreement to open multiple Zaxbys Restaurants, the Development Area size is determined by the number of restaurants to be opened, the general location, and its demographics. These Development Area boundaries may be described using zip codes, streets, landmarks, or county lines.
Staffing Notes
Zaxbys Restaurants must always have at least four Certified Managers on staff, including one General Manager and three assistant or shift managers. After the first year of operation, this requirement can be reduced to three Certified Managers (one General Manager and two assistant or shift managers). Each Certified Manager must work full-time supervising and managing only their assigned restaurant and must successfully complete Zaxbys's training program. A Certified Manager must be present on-premises whenever the restaurant is open for business. Franchisees are solely responsible for all employment decisions, such as hiring, firing, and setting compensation, and must ensure their staff is competent and adheres to all applicable laws and Zaxbys's System Standards. Zaxbys SPE Franchisor LLC does not mandate the use of any optional employment policies provided in its manual.