Review of the Krystals Franchise Opp and Startup Costs

Do you love providing people with a unique dining experience? Would you love to put a little “soul” into the restaurant options that are currently available in your community? If so, then a Krystal franchise might be the perfect solution to meet your needs! This organization was started during the heights of the Great Depression and features a one-of-a-kind menu that is led by the much wanted original Krystal burger.

Do you qualify to become a franchisee of this organization? Is it a wise investment to make?

What Are the Initial Startup Costs?

What Krystal is looking for in a franchisee is solid business experience. It’s at the top of their qualifying criteria because above all else, good business sense is required to make this franchise a profitable venture. This organization has survived through some very tough times, thrived under difficult circumstances, yet never compromised on providing a quality product. That’s why business experience tops the list of requirements.

You’ll also need a minimum net worth of $500k in order to qualify. This net worth must also show a history of being able to own and operate a restaurant or other organization within the food service industry. Your net worth must also contain $250k in liquid assets. If you are looking to start multiple Krystal franchises, these net worth minimums are applied on a per store basis. Three stores, therefore, would require a minimum net worth of $1.5 million, and in some locations a 3 restaurant development agreement is necessary in order to become a franchisee.

If you meet these financial minimums and qualify through your experience, then you may be invited to complete your franchise application. There will be a $32,500 franchise fee that applies to each location that is opened and the initial term of the agreement is 20 years, with the option for a 20 year renewal. There is assistance with finding the right real estate opportunity, either through direct purchase or lease that comes with the franchise fee. Once your location opens, you’ll have a 4.5% royalty responsibility back to the home organization. There’s also a 4% advertising responsibility.

Are There Other Requirements That Must Be Met?

A Krystal franchisee must meet a minimum lot size if their location will be free-standing. It needs to be a minimum of 30k square feet and there must be a minimum frontage of 135 feet before easements and setbacks. There are other opportunities that include shopping malls, travel plazas, and even convenience store units if you’re looking at owning a more non-traditional unit. If you’re running a reduced-size free standing unit, there must be 23k square feet and 110 feet of frontage.

Locations for this franchise are located in the south and southeast. Once approved as a franchisee, you’ll be required to go through a minimum of six weeks of training in the organization’s identity and restaurant processes at their Georgia headquarters.

To help facilitate your location’s growth, Krystal has brought in specific experience to help community awareness and growth to occur after being sold in 2012 to an investment group. Led by Doug Pendergast, who has experience growing the Church’s Chicken brand and was the Chief Development Officer for Craftworks Restaurants and Breweries has been leading the organization for the last 18 months and his experience in growing franchises is exactly what you’ll learn as you undergo your company mandated training.

The Emphasis of Krystal Is To Improve Customer Satisfaction

Even though Krystal is the oldest quick serve restaurant in the South, it has only been franchising locations for about 2 decades. The number of franchises has been slowly decreasing since the initial start-up, but that’s because the new leadership believes a focus away from providing a quality guest experience was removed from the equation. Southern food is more than just providing a good-tasting meal at a great price. It’s about hospitality too and that’s what Pendergast wants to bring back to the Krystal franchise at a core level.

To improve performance, Krystal has reduced menu sizes so that speed, efficiency, and hospitality can all become part of each guest’s experience in your new franchise location. The reduced menu helps with training costs, keeps everything rather straightforward, and positions you for a steep growth opportunity.

How good are the growth prospects? You can find out yourself because Krystal will provide you with contact information for their franchisees so you can discuss the unique particulars of this franchise on a 1-on-1 basis. No promises of profitability can be made by law, but there is a lot of potential for the brand in the near future. With only 100 franchises and another 200 company-owned locations, this really is a ground floor opportunity that is rare to find because of the over 8 decades of total restaurant experience that you get to be part of as a franchisee.

Is This the Right Investment To Make?

The challenge of a Krystal’s franchise is the multiple unit agreement that may be required. If that is part of the equation, you’ll have the benefit of being able to limit competition within your targeted communities, but you’ll need $750k of liquidity in order to accomplish it. You’ll also need to be wanting to open a location in Texas or the Southeast because that is the focus of this restaurant chain. In return, you’ll get protected development opportunities within your requested territory and that can help to lead to greater profitability for your own business.

You’re also going to need to be on-board to help grow the Krystal brand. Whether you want a university location or you’ve got the perfect free-standing unit already in mind, there must be an enthusiasm present for you to be accepted as a franchisee. If you can provide that, then in the next 12 months you could be preparing for your own grand opening with this franchise!

The initial application process can take up to 60 days. If you’re interested in this franchise opportunity, then now is the time to apply so that you can get the process started!

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