What does a Texas Roadhouse franchise toll to open up?Texas Roadhouse requires a $xl,000 franchise fee with a liquid capital ranging from $442,000 to $641,500. Full startup toll volition be $iii,595,500 to $six,463,500 earlier you tin can open the doors. This is a significantly higher startup cost than other franchise restaurants like Little Caesars that tops out at an investment level of $1.vi million.

A franchise agreement with Texas Roadhouse requires an initial term of x years which is renewable in v-year terms. Texas Roadhouse is one of the meridian-ranked steakhouses in the U.S. with 28 current international chains. This is likewise a testament to the growth and stability of the concept globally.

In this franchise review, I evaluate the total cost to invest in this steakhouse restaurants and help yous decide if it's worth the price tag. Take our 8-infinitesimal franchise quiz to find out if this is the right choice for y'all.

  • Financial Requirements
  • Average Sales / Revenue per Twelvemonth
  • Franchise Facts
  • How Much Profit Do a Texas Roadhouse Franchisee Make Per Year?
  • Advantages
  • Challenges
  • Is the Texas Roadhouse correct for you lot?

Financial Requirements

Texas Roadhouse

Texas Roadhouse.

Here's a snapshot of the fees and expenses associated with opening a Texas Roadhouse.

Fees/ Expenses Financial Amount
Initial Franchise Fee: $40,000
Working Majuscule $442,000 to $641,500
Total Investment $three,595,500 to $six,463,500
Royalty Fee four.0%

Have note that the initial franchise fee is the amount you must pay Texas Roadhouse in club to open up your own restaurant. Working capital is the amount you have on mitt and can admission immediately if needed. Total investment is the estimated amount you'll demand to get the franchise up and running.

Average Sales / Revenue per Twelvemonth

Texas Roadhouse's electric current annual sales sat at $2.969 billion at the end of June 2021. Despite the health crunch pandemic, total acquirement has increased by 18.52% from 2019. The average annual sales per unit is at $five,359 (thousands). Texas Roadhouse doesn't show much of their average profit per franchise, but estimates show that each franchise earns a net profit of $522,000 per location after EBITDA (@ 12.3% EBITDA margins).

Profits from a Texas Roadhouse franchise like any other concern are dependent on a multifariousness of factors like location and marketing.

Franchise Facts

Yr Founded 1993
Total Units 611 outlets in 49 states with 28 international branches in x countries
Manufacture Full-Service Restaurants
Category Steakhouse
Franchising since 1995

Texas Roadhouse is a steakhouse chain with a distinctly Western-fashion with a diverse menu of steaks, ribs, chicken, and seafood. The steaks at Texas Roadhouse are ever fresh-cut in the restaurant and never frozen. With their ribs and steaks, the eatery chain has fifty-fifty won national cooking competitions.

The boilerplate Texas Roadhouse employs about 100 individuals and serves betwixt 220 and 270 visitors at any time. Today, in that location are 69 Texas Roadhouse franchised sites in the United States as of the 2021 Franchise Disclosure Document. The expansion plan for Texas Roadhouse is to constitute each of their concepts equally a local hometown favorite for a large swath of customers looking for high-quality, inexpensive meals provided by friendly, highly-seasoned service.

How Much Profit Exercise a Texas Roadhouse Franchisee Make Per Yr?

At this indicate you empathise this franchise will require an investment between $3 – $4 1000000. And I'm sure you lot're curious… Volition I make this money dorsum? Back in 2017, each Texas Roadhouse franchise brought in an annual gross turn a profit of $1 million before EBITDA.

Considering that 2017 was i of the years the eating place had scaled down profits on year-on-year comparison, times take changed and Texas Roadhouse's revenue has been on the uptick in contempo years. Today, each Texas Roadhouse franchise store earns an average of $4.25 million earlier EBITDA. That'south a whopping 325% increase in but the by four years.

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Advantages

steak and potatoes

Steak and potatoes.

As with virtually nutrient franchises, there are advantages and challenges in opening up a brick-and-mortar restaurant. In this department, I nowadays the different benefits of operating ane of the biggest restaurants in the country.

Texas Roadhouse is a quickly expanding restaurant corporation that primarily operates three coincidental dining restaurants: Texas Roadhouse, Bubba'south 33, and Jaggers. In Clarksville, Indiana, the starting time Texas Roadhouse opened in 1963. Afterward more than than fifty years in business, it'south clear this concept has staying ability.

Growth Strategy for the Long Run

The following key components underpin the operating strategies that support growth.

Competitive bounty for managers. Individual eatery managers and multi-restaurant operators are referred to as managing partners and market partners, respectively, under Texas Roadhouse's performance-based compensation construction. Every one of these partners is paid a base pay as well every bit a operation bonus based on a percentage of their eatery's pre-tax revenue. This approach helps you retain top talent since direction is fairly compensated.

Providing freshly prepared, high-quality meals. Near steaks are hand-cut with sides that are made from scratch. If you've ever dined at a Texas Roadhouse before, you know some of the side are 1 of a kind like the loaded baked potatoes, sweetness tater, and Texas chili.

Dinner is the name of the game. Texas Roadhouse restricts its operating hours to dinner but on weekdays in a large pct of their locations with about one-half of the units offering lunch on Friday. Texas Roadhouse'south teams only have to gear up and handle i shift each twenty-four hours in the week by focusing on dinner. This makes the operations simpler by focusing on the busiest times of the 24-hour interval.

Fun with high-quality service. Texas Roadhouse thinks that the level of service, value, and ambiance they provide is critical to generating echo business concern. They strive to keep their table-to-serve ratios low so that servers may devote their total attention to guests and cater to their specific demands.

Cost points that are highly-seasoned. They provide a multifariousness of toll points in order to come across each invitee's budget and value expectations. Compared to most steakhouses, you lot'll be surprised at how reasonable the menu prices accept stayed in spite of inflation.

Texas Roadhouse, Inc. has strong costless greenbacks flows that provide resource in the hand of the company to expand into new projects. Co-ordinate to Texas Roadhouse's about contempo 10-Yard filing, in 2018 the company had $215 million in internet cash provided by operating activities and $171 meg in net greenbacks used for investing activities.

This left Texas Roadhouse with $44 1000000 in costless greenbacks flow after accounting for its majuscule expenditures. This is a significant increase from the $17 million in gratis cash flow the company generated in 2017. While Texas Roadhouse has been spending more on capital expenditures in recent years due to its expansion efforts, its potent free cash flow provides it with the resources it needs to continue growing. Texas Roadhouse'southward free cash flow will likely continue to exist a key commuter of its growth going forward.

Challenges

Despite the eating house chains' surging sales, at that place are still hurdles they notwithstanding demand to argue with. Afterward all, there's no perfect business, right? Though the challenges aren't that concerning, as a premier steakhouse restaurant, the company was speedily able to adjust and rebound on the biggest challenge every business has always faced – including the recent wellness crisis.

Since sales volumes have exceeded estimates and caused the company to seek supply on the open up marketplace, Texas Roadhouse expected commodity cost inflation of 10% in the 2nd one-half of the year mostly due to rising beefiness prices.

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Aside from college ingredient costs, the tight labor marketplace is projected to keep to exist a disadvantage for Texas Roadhouse for the residuum of the year.

Still, as long as Texas Roadhouse can proceed to attract customers for on-site dining, they might be better positioned to attract wait staff. As a server, you're less concerned about the hourly wage and with most of the income coming from tips. If the tables turn over speedily, await staff won't be difficult to find.

Covid-19 Pandemic

Texas Roadhouse CEO Kent Taylor recently said that Covid-xix gave Texas Roadhouse ii choices. It may either accept the implications of airtight dining rooms or conform. According to him, information technology has never been their style to sit down back and exist content with a business concern-equally-usual arroyo. The corporation was not going to sit back as they confronted their greatest challenge nonetheless.

But don't confuse Texas Roadhouse's stability with obstinacy. For decades, it has prioritized core equities over following the crowd. The eating house remains focused on what works.

Texas Roadhouse began by moving activities outside to parking lots right away. The visitor began to focus on off-premises volume, introducing family packs and fix-to-grill steaks. It also procured and installed equipment and procedures to assist staff as quickly as possible.

The company's top executives likewise forewent remuneration to aid front-line staff. Electronic surveys and temperature checks were setup at some locations for a short menstruation of fourth dimension.

The Stigma of By Litigation

Texas Roadhouse was charged past the Equal Employment Opportunity Commission in the The states in 2017. Applicants who were over the age of twoscore were allegedly rejected employment at Texas Roadhouse due to age discrimination.

The charges were disputed by Texas Roadhouse, and the trial commenced on January nine, 2017. The first trial failed to accomplish an understanding, and a 2d trial was scheduled for May 2017. However, prior to the second trial, Texas Roadhouse committed to a $12 million fund and to make a concerted try to hire workers over xl years onetime.

Over the past couple of years, Texas Roadhouse has proven it can remain a feasible business no matter what black swan event comes there manner. In 2021, the company recorded global sales of more than than $3.4 billion. Texas Roadhouse is on the upswing equally a thriving franchise, generating billions in profits and hundreds of millions in internet income.

If you're interested in owning a Texas Roadhouse franchise, y'all'll need to dig further into the numbers to meet if it's the right fit. Although owning a franchise is a meaning investment, conducting research is an essential first footstep.

Kent Taylor founded Texas Roadhouse in Clarksville, Indiana, in 1993 with the purpose of providing a lively environment for people of all ages while still providing a fantastic repast for everyone. Information technology is part of the Texas Roadhouse Inc, which has its headquarters in Louisville, KY. They are well-known for their mitt-cutting steaks, fall-off-the-bone ribs, made-from-scratch sides, fresh-broiled bread, and legendary margaritas.

In the late 1990s, the company grew quickly and went public in 2004. In 2011, the business began expanding globally, with its first location in Dubai, United Arab Emirates. Equally of March 2021, the business has 611 outlets in 49 states and 28 offshore sites in ten countries. Texas Roadhouse is also known for its trademark free buckets of peanuts with dinner bread rolls and beloved cinnamon butter served at each tabular array.

If yous're serious nearly opening a Texas Roadhouse Franchise, accept our 8-infinitesimal quiz to learn if this is the correct concept for you.