I N V E S T M E N T
Your total initial investment will depend on many factors. Some of those factors include: location, rent, size of unit, and equipment. An estimate of total cost to open a franchise including the franchise fee can be found later in this overview. The franchise agreement is for 10 years and renewable in additional 10-year increments. Our initial franchise fee, which is part of your initial investment, is Thirty Five Thousand Dollars.
ADVANTAGES OF THE CHIP'S AUTHENTIC SOUTHERN COOKIN' SYSTEMOur start up costs are exceptionally low for a franchise of our size. You can often purchase dependable brand name restaurant equipment at reasonable prices through our experience in the restaurant business and through our purchasing power. Since leasehold improvements are only a small portion of the total capital requirements, you are not putting a lot of valuable cash into non-recoverable fixed assets.
Also, take note that most stores are only 1,600 square feet in size, and therefore, may be opened in a wide variety of building styles. The small amount of space required to open a Chip's Authentic Southern Cookin' unit reduces your overhead costs. Since we prepare, pre-cook and deliver most of your food daily, the "grunt" work is done for you! This allows you more time to work "on" developing your business and less time spend "in" your business. Because of this, our concept is ideal for the entrepreneur with marketing savvy and little to no restaurant experience.
FINANCINGAn important consideration in purchasing your first Chip's Authentic Southern Cookin' restaurant is how to finance your investment. A good arrangement is to have 50% of the total capital requirements available in cash and sufficient collateral to obtain funding for the balance. As franchisor, VTG Management Group, LLC. does not finance any portion of your initial investment costs.
FEES
Continuing franchise fees are based on your gross retail sales. The continuing franchise fee is only 3%. A 1% marketing fee is also paid by you into the Chip's Authentic Southern Cookin' Regional and National Creative Advertising Fund. Franchisees in some markets may additionally vote to increase the marketing fee percentage for local advertising purposes and enhance their premier market presence.
POTENTIAL MARKETWe feel it is important to gain as much market share as possible. With our system and operational strengths, low capital requirements, simple operaton and low overhead, as well as a dedicated field and corporate staff, there is every reason to believe the Chip's Authentic Southern Cookin' franchise will continue to grow as a dominant force in the regional and national multi-billion dollar fast food industry. In fact, in a survey among other similar franchise owners, most rate Chip's Authentic Southern Cookin' a "best buy" and many are looking to us as a co-brand offering to help compliment their existing franchise.
PROFIT POTENTIALThe potential sales and profitability of a Chip's Authentic Southern Cookin' restaurant is naturally a major concern to any prospective franchisee. To determine this information, we encourage you to contact existing franchise licensees and question them n how they are doing. In this way, you can make your own first-hand evaluation of the sales and profit potential of a typical Chip's Authentic Southern Cookin' restaurant.
We have a policy that no employee of the company can provide you with projections as to your potential sales, earnings and profitability. This policy eliminates possible misunderstandings and leads to a better long-term relationship.
Our standard procedure is to provide you with the name and telephone number of every licensed franchisee that we have currently operating stores in and near your market area. Of course, it is not mandatory for franchisees to provide exact figures, but most of them are willing to give you a good idea of how they are doing and state if they are satisfied with their Chip's Authentic Southern Cookin' franchise.
OPTIONAL PROGRAMSOptional programs include a catering program, a deliver program and a soon-to-be-added breakfast program. All of these programs you may wish to consider as additional revenue sources beyond your basic lunch and dinner menus.
PRICINGPricing of all items in the store will depend on your local market. Pricing guidelines are described in our operations Manual which can be made available to you.
EFFICIENT SET UPThe set up of a Chip's Authentic Southern Cookin' franchise has been fine-tuned to promote efficiency and simplicity. Most of the business day centers on the hot steam-well units which hold the vegetables needed for product preparation and sale. A limited number of products are also fried or baked by franchisees on-site as well and can easily be prepared by an individual who is relatively new to the restaurant field.
SITE SELECTIONIt is recommended that before training is completed, franchisees should begin the site location process. Sites range from 1,000 to 1,600 square feet, or larger, with the average site being 1,500 square feet. A location should be situated to take advantage of nearby residential and business communities. All sites must be approved by a company representative or affiliate. We believe that having the right market data and support makes the difference between running a successful franchise operation and merely surviving. At corporate, no detail is left to chance. Accessibility, visibility and high-density office and residential markets are basic essentials to your success. The franchisee, with the assistance of a company representative and the home office leasing affiliate, negotiates the economics of the lease with the landlord. The objective is to secure the best possible location at a reasonable rent.
RESEARCH AND DEVELOPMENTWe are constantly working with approved vendors, testing and developing new food items, paper products, and equipment to better service our franchisees. R&D is an ongoing and vital part of our development success.
STORE DESIGNThe company provides custom floor plans for décor and equipment placement at substantial cost savings to franchisees. Each Chip's Authentic Southern Cookin' store is designed to meet several objectives, including:
- Enhance the Chip's Authentic Southern Cookin' image
- Present the products and services to their best advantage
- Facilitate easy maintenance
- Conserve energy, both economically and physically
- Provide proper customer flow in and around the premises
- Increase efficiency
EQUIPMENTYou will work with Chip's Cookin' Corporate to determine the equipment and décor needs of your store based on the floor plan provided. Once the equipment list is complete and has been approved, we will help you verify prices for both new and used equipment and determine the total cost of your equipment and décor package that best fits within your budget.
TRAININGAn understanding of what it takes to open and operate a Chip's Authentic Southern Cookin' restaurant is important. Our intensive 5-day training program covers the fundamentals of establishing and operating a Chip's Authentic Southern Cookin' store. The training program is split into both classroom and in-store instruction. Also available is an optional course for store managers as well as advanced product marketing courses for owners.
FRANCHISEE ADVERTISINGAdvertising plays a major role in the marketing of almost every business, and the Chip's Authentic Southern Cookin' franchise system is no exception. Proper advertising builds store traffic, customer loyalty and sales. As a franchise licensee, you will need to spend a portion of your gross receipts to promote your own store. In addition to your personal efforts to increase sales, all franchisees contribute a percentage of store sales to the Chip's Authentic Southern Cookin' Regional and National Creative Advertising Fund.
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