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Review of the Yoshinoya Franchise Opp and Startup Costs

The bowl concept for QSR Asian cuisine is exploding in popularity because it is a fresh meal that is served for an affordable price. With a slogan that says “Our bowls are better than theirs,” Yoshinoya is doing something right because they are serving 500k bowls to customers every single day! If you’re ready to put fast food into a whole new place in your community, then investing into this franchise opportunity might be the right choice to make.

Featuring a menu that is heavily influenced by Japanese cuisine, the trends in the United States seem to be well aligned for this franchise opportunity. Using ethnic influences with today’s nutrition and health trends, you’ll have an exciting menu of healthy foods that will naturally attract an audience! Just how good is this franchising opportunity? Will you receive the right kind of support to help develop a mutual level of success? What can you expect the initial investment to look like if you decide to become a Yoshinoya franchisee?

What Is the Initial Expected Investment?

Your investment into the Yoshinoya franchise begins with the initial franchise fee of $27,500. This provides an immediate advantage in the QSR industry because it is up to 50% lower than other similar franchises in this niche. If you’re interested in developing a specific territory as a franchisee, then you may also wish to consider a Territory Development Agreement as it will offer discounted franchise fees over all of the units. The initial term of the franchise is 10 years and you currently receive two 5 year renewal options.

Once you achieve your grand opening, there is also a 4% ongoing royalty that is paid from your sales to the organization. Part of the agreement includes providing a separate $10k opening advertising budget so you can generate some excitement for your new franchise locally. No restaurant experience is necessary to get involved as a franchisee, but a proven entrepreneurial spirit does need to be shown with a history of developing profitable business opportunities.

Unlike other franchise opportunities, however, there are no minimum net worth or liquid cash considerations that must be met. Franchisees will be thoroughly vetted by Yoshinoya on an individualized basis to determine if they have the financial stability to create long-lasting presence in their chosen community. An emphasis on overall financial responsibility is what governs this vetting process, so applicants with strong credit scores and a history of success will receive precedence over wealthy investors with a less reliable history.

The typical initial investment for this opportunity, including the build-out phase and leaseholder improvements as necessary, are an expected minimum of $509k. The high end investment estimate for a Yoshinoya restaurant is $806k and this amount includes the first three months of operating expenses for the new franchise. Some franchises may experience lower or higher investment amounts because of unique circumstances.

Third-party financing may be available in certain circumstances and in return for your investment, you receive an exclusive territory with a 1 mile radius. Some large population districts may not qualify for this territory exclusivity. Yoshinoya does welcome QSR locations that are looking to convert into something new. Depending on your existing layout and current equipment, a conversion franchise opportunity may be up to 75% less than the costs described above, including leaseholder improvements that may be required.

What Kind of Support Do You Receive As a Franchisee?

The initial support begins after signing the franchise agreement and includes training for up to four people within your organization. The franchisee is given one week of extensive training at the company’s Torrance, CA headquarters. When you have your kitchen management sorted out, Yoshinoya will provide them with six weeks of direct training at both company headquarters and your operating location. Your front manager will receive 12 weeks of training to properly managed the front of the house.

Yoshinoya will also provide you with a model guideline for your franchise location, but it’s up to each franchisee to find the right location in the community. Once everything has been selected, Yoshinoya will want to approve the location. Once you achieve your grand opening, a support representative will stay on-site through your first week of operations to make sure your practices are solid. Ongoing training is also available on an as-needed basis and may include new menu items, new equipment, or adjustments to the best practices in the operations manual.

Field support is also a critical part of the success of each franchisee and you’ll have staff from Yoshinoya regularly inspecting your restaurant to evaluate your progress and suggest improvements. Ongoing research and development is always occurring and you’ll also be contributing to a marketing fund that will give you a local advertising presence.

How Good Is This Investment Opportunity?

From a QSR perspective, this is a pretty exciting investment opportunity. The costs are in-line with other units, but instead of burgers and fries, you’ll be serving healthy bowls of fresh ingredients that are all around the 500 calorie mark. With good flavors and fast service, you’ll provide a tempting, fast meal for people who need to eat in a short amount of time.

The one area of concern is the subtle language shifts in the descriptions of the investments and support that is received. There is a lot of emphasis about letting each franchisee work on their own, but this is followed up with a system that approaches micromanagement. If you’re thinking about this opportunity and decide to engage with a mutual vetting process, read through all of the documentation you receive thoroughly and make sure to consult with your legal representation before finalizing any agreement.

If you want to get into this food niche, however, you may not find a better opportunity for fast growth with fresh ingredients that are made to order. If fast, healthy eating is what your community needs, then take a closer look at Yoshinoya today to see if this could be the right investment to add into your portfolio.

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