Risk Score
Pending analysis
Investment Range
$497,800 - $712,500
Franchise Fee
$26,250
Min Cash Required
$99,560
Total US Locations
36
Business Summary
Z!Eats operates fast casual restaurants that offer a wide variety of soups, sandwiches, and salads, along with cold beverages and other ancillary products. These restaurants serve customers for lunch, dinner, catering, and take-home meals.
Corporate History
Zoup Franchising Co., LLC was formed in Delaware on February 9, 2022. It operates and franchises Z!Eats fast casual restaurants, specializing in soups, sandwiches, and salads. The company's predecessor, Zoup! Systems, L.L.C., was a Michigan limited liability company formed on September 2, 2002, and offered Zoup! franchises from January 2003 to April 2022. On May 10, 2022, Zoup Restaurant Co., LLC, the parent company of Zoup Franchising Co., LLC, acquired substantially all assets of the predecessor, including existing franchise agreements and intellectual property. Zoup Franchising Co., LLC then became the new franchisor, beginning to offer franchises under the "Zoup!" mark on October 20, 2022, and transitioning to the "Z!Eats" mark as of the FDD's issuance date.
Financial Overview
Investment Range
$497,800 - $712,500
Franchise Fee (Low)
$26,250
Franchise Fee (High)
$35,000
Minimum Cash Required
$99,560
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$381,800
Equipment Costs (High)
$546,500
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The franchisor, Zoup Franchising Co., LLC, has disclosed that its financial condition, as shown in its financial statements, raises questions about its ability to provide services and support to franchisees. The auditor's notes indicate that Zoup Franchising Co., LLC's parent company, Restaurant Co., LLC dba WOWorks, has accumulated net losses since its inception. This has led to a full valuation allowance reducing its net deferred income tax assets, suggesting that the company may not be able to realize these tax assets in the future.
Financing Details
Zoup Franchising Co., LLC does not offer any direct or indirect financing to its franchisees. Additionally, the franchisor does not guarantee any notes, leases, or other financial obligations for its franchisees.
Performance Metrics
Total US Locations
36
Franchised Units
35
Corporate Units
1
Avg Square Footage
1,800
Franchising Since
2003
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Zoup Franchising Co., LLC has no litigation to report, as no litigation is required to be disclosed in Item 3 of the FDD.
Bankruptcy History
Zoup Franchising Co., LLC 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 their franchise agreement, Zoup Franchising Co., LLC franchisees must meet several conditions. They need to timely notify the franchisor in writing of their intention to renew. Franchisees must demonstrate their right to operate the restaurant at the approved location for the renewal term or secure an acceptable substitute. They must satisfactorily complete all necessary maintenance, refurbishing, renovating, updating, and remodeling of their restaurant premises and equipment to meet current System standards and specifications no later than 90 days before the current term expires. All monetary obligations owed to the franchisor, its affiliates, and major suppliers and vendors must be satisfied, and franchisees must have substantially complied with all agreements. Franchisees must sign the franchisor's then-current form of franchise agreement, which may have materially different terms, and satisfy any current training requirements at their own expense. They also need to meet the franchisor's operational standards, including quality, service, and cleanliness, and sign a general release. Finally, a renewal fee of $17,500 must be paid. The renewal is at Z!Eats's sole discretion.
Training & Support Program
Franchisor Assistance
Zoup Franchising Co., LLC provides pre-opening and ongoing assistance to its franchisees. Before opening, Z!Eats offers a franchise orientation seminar, initial training for the franchisee and up to three management personnel (lasting about four weeks, including classroom and on-the-job training in Michigan or designated locations), and a Prototype Design Package for restaurant design. The franchisor also provides specifications for inventory and supplies, requires a grand opening advertising program of at least $15,000, and offers one to five days of on-site assistance during the initial opening period, depending on whether it's the franchisee's first, second, or subsequent restaurant. After opening, Z!Eats offers continuing consultation and advice on management and operations via telephone, facsimile, intranet, and on-site visits. Additional on-site assistance is available for $500 per person per day plus expenses. The franchisor also holds annual conventions or regional meetings that franchisees are required to attend.
Initial Training Hours
95
Training Location
The classroom training is conducted virtually via webinar. On-the-job training takes place at a company-owned Z!Eats restaurant, currently in the Southfield, Michigan, area, or at an alternative designated location. The application of procedures training occurs at the franchisee's own restaurant.
Ongoing Support
After opening, Zoup Franchising Co., LLC provides ongoing consultation and advice to its franchisees regarding restaurant management and operations. This assistance is offered through telephone, facsimile, intranet communication, and on-site visits. If a Z!Eats franchisee requests additional on-site assistance, and it is deemed necessary and feasible, it is provided at a cost of $500 per person per day, plus reasonable travel, lodging, meal, and other expenses. Z!Eats may also hold an Annual Convention or Regional Meeting, which franchisees are required to attend, with associated attendance fees and personal expenses being the franchisee's responsibility. The franchisor also offers additional or refresher training courses and seminars, which franchisees and/or their managers may be required to attend at their own expense for travel and lodging.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Staffing Notes
Zoup Franchising Co., LLC requires that either the franchisee or one of their principals dedicate their best efforts to managing and operating the Z!Eats restaurant. Day-to-day supervision can be delegated to a Manager, who must successfully complete the franchisor's initial training program before taking on responsibilities. Each Z!Eats restaurant must always be managed by a trained individual, whether it's the owner or a qualified Manager. If a franchisee operates multiple Z!Eats locations, each must have a properly trained Manager. Managers are expected to devote full-time efforts to daily supervision and must have full authority to act on the franchisee's behalf when dealing with the franchisor. If a Manager leaves, a replacement meeting current standards must be hired within 30 days and complete initial training within 60 days.