Po’ Boys Creole Café bolsters franchisee relationships with flat fee royalty
Tallahassee, FL – When Charlie Youngs decided to franchise Po’ Boys
Creole Café, he designed a franchising program that would help put more
money in the pockets of franchisees who invested in the New
Orleans-themed restaurant chain.
As corporate parents, Youngs and partners Carmen Calabrese and Jon
Sweede agreed the best way to lure franchise holders to their concept
would be to give them every opportunity to boost earnings during their
first year in business.
The franchisers implemented a flat fee royalty schedule that charges
franchise owners a flat weekly service fee instead of a percentage of
their gross revenue.
Po’ Boys’ royalty schedule charges new franchisees a lump sum of $500 a
week until they surpass $800,000 in gross revenue within a 12-month
period.
The franchisees’ service fees increase to $600 a week if they earn
$800,000 to $1 million in gross revenue within a year. Franchises that
gross $1 million to $1.2 million a year pay $700 a week in service fees.
The royalty fee rises to $800 per week if franchisees take in $1.2 to
$1.4 million within the year. Franchised units that earn $1.4 to $1.6
million in gross revenue pay $900 a week in fees.
Franchisees earning more than $1.6 million of gross revenue will pay a
weekly sum of $900 and an extra $100 for every $200,000 of gross
revenue the restaurant earns above $1.6 million.
“We want our franchisees to do well,” said Youngs, the director
of franchise development. “This encourages our franchise owners to
increase their business in order to increase their profits. The more
they make the first year, the more they put in their pocket.”
While the flat fee royalty schedule is designed to strengthen bases for
new franchisees, most Po’ Boys franchisees typically pay less in
royalties than the five percent industry standard.
“The first year is the year the franchisees can really kick it,” Youngs
said. “But even with the increases, we’re hovering around three
percent, which is pretty low. This probably is one of the biggest
selling points for our franchisees.”
Besides increasing their earning potential, the flat fee royalty schedule allows for easy cash flow management for franchisees.
“It all has to do with ease of calculating,” Youngs said. “The
franchisees know how much money will come out each week, and it’s an
automatic withdrawal from each franchisee’s bank account.”
Since 1992, Po’ Boys Creole Café has grown into a seven-unit chain that
serves traditional Creole and Cajun fare, including gumbo, jambalaya,
crawfish, red beans and rice, specialty Louisiana beers, a full-service
Sunday brunch and their namesake, po’ boy sandwiches. Five franchised
locations operate in Gainesville, Tampa, Brandon, Jacksonville and
Orlando.
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Media Contact:
Krista Zilizi
Quantified Marketing Group
(706) 627-3204
(407) 936-1010
krista@restaurant-public-relations.com
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