Texas Roadhouse, the steakhouse franchise, has been rounding up sales as it grows out its footprint, according to the Motley Fool in a recent Top Franchises post on Nasdaq.com.
Given the strong presence Sintel Systems has in the retail, restaurant and service industries’ point of sale marketplace, we share these service sector growth trends with our customers and franchise hopefuls looking for key insights and opportunities in order to help them make the best decisions from the very beginning.
Here are the highlights of the Motley Fool’s post, “Top Franchises: Investing in Texas Roadhouse”:
• Texas Roadhouse looks for proven experience in running restaurants, however, the Kentucky-based steakhouse chain also seeks only well-heeled franchisees with at lease $3 million in liquidity, a measure of the ease with which the potential franchisee can convert assets into cash, and a minimum net worth of at least $6 million.
• The Motley Fool also notes that the chain favors franchisees who want to operate more than a single Texas Roadhouse restaurant.
• Currently, Texas Roadhouse operates 433 locations in 49 states and three foreign countries. It will open 25 company-owned restaurants in 2014. Seventy-five restaurants are franchised, and the company’s franchise partners have committed to opening another five, with four of them being in foreign countries.
• The Motley Fool writes that Texas Roadhouse already has agreements in place to open more steakhouses in eight countries in the Middle East over the next 10 years (five are already operating), and last year it signed a franchise development agreement for the development of the concept in Taiwan over a five-year period.
• Texas Roadhouse, by the numbers:
Year Founded 1993
Systemwide Restaurants 443
Capital Required $200,000
Total Investment $1.6-$3 million
Franchise Fee $40,000
Avg. Check per Guest $15.80
Avg. No. Tables 57 to 68
Avg. No. Guests 245 to 291 guests, including 15 bar seats
Typical Restaurant Size 6,700 to 7,500 square feet
• The Motley Fools says that while Texas Roadhouse has enjoyed an 8% compounded rate of growth in revenues over the past five years, last year they were up 11% from 2012. The chain has proved itself to be one of the most popular steakhouse destinations in the country, second only to The Capital Grille, operated by Darden Restaurants, which also runs the Longhorn Steakhouse.
• The post notes that according to market researcher Technomic, the top 10 steakhouses in the U.S. generated over $8 billion in sales in 2013, an average 7% increase, that led them to increase their footprint by 6%. The researchers were also quoted in the post saying that while the top full-service chains posted just a 2.4% increase in U.S. sales last year, the steakhouse segment surged some 6.2%.
• “But it’s not as if it’s without risk,” warns the Motley Fool. “Restaurants do close, the economy can weaken once more, and beef prices today are at record levels.”
Read the Motley Fool’s full Nasdaq.com post here.
For more insights into the restaurant industry’s performance and trends, check out our related posts, Frozen Yogurt Is Hot, Hot, Hot, Growth Investors Likely To Get In Line For Shake Shack IPO, and The Top 12 Franchises, Based Upon Average Annual Single-Store Sales.
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