"Boiling Crab" Franchise Cost in USA, Fees, Profit, Revenue, Apply Process | SkillsAndTech

“Boiling Crab” Franchise Cost in USA, Fees, Profit, Revenue, Apply Process | SkillsAndTech

The Boiling Crab is a family-style seafood restaurant inspired by the traditional seafood boils from Louisiana and Southern Texas. The vibe is pretty unique as you order bags of seafood by the pound including crawfish, shrimp, or sausage by the pound. The first Boiling Crab restaurant started in 2004, and now the brand has over 20 sites around the world, including branches in Shanghai and Melbourne.

Boiling Crab Franchise Wiki

The Boiling Crab is a southern seafood restaurant with a Vietnamese touch that is inspired by the Louisiana seafood boil. The restaurant serves Cajun-style seafood meals and provides complimentary side dishes to round out the meal. The casual eatery also offers a variety of unique sauces ranging from sweet to spicy.

Total Units23
Incorporated NameThe Boiling Crab
Franchising Since2004
IndustryRestaurant Franchises
SubsectorFast Food Franchises

The first-ever restaurant of The Boiling Crab was launched in 2004 by Dada Ngo and her husband Sinh Nguyen in Garden Grove, California. The Boiling Crab was inspired by Sinh Ngyuen, who grew up in Southern Texas located on the Gulf of Mexico. In this place, seafood boils were part of the culture. Currently, there are over 20 Boiling Crab Restaurants around the world, including Melbourne and Shanghai.

As a fun side note, I’ve dined at the Garden Grove location many times. In fact, it’s one of my favorite restaurants and my wife and I had our first date there. If you’d like to dine there, be sure to get there early. It’s not uncommon to be waiting an hour before you can get table if you visit on the weekends.

How much does it cost to open a franchise of Boiling Crab?

To open your Boiling Crab restaurant, you’ll need to invest anywhere from $941,000 to $1,335,500. You will also need $90,000 to $190,000 in liquid capital and a $1,000,000 net worth to qualify.

If you are interested in starting a business that offers family-style seafood dining like Boiling Crab, read on to evaluate if it’s really the ideal franchise for you. In this article, I examine everything you need to know about opening this franchise. This analysis includes the financial requirements and fees of franchising this company as well as the advantages and challenges of the concept.

Boiling Crab Franchise Financial Requirements and Fees

I included basic requirements to assist you to get an idea of what you might need in terms of finances to start your own Boiling Crab franchise. But first let me describe the financial terms you’ll come across in this section.

Liquid capital refers to the entire amount of cash you will need on hand and is available to use at any time. Net worth refers to the value of all your non-financial and financial assets minus the value of all your outstanding liabilities. Total investment is the total capital or the total money you will need to put into the franchise overtime to get it up and running. Lastly, franchise fee refers to the amount you must pay to the franchisor to use its brand and resources.

Boiling Crab Franchise Investment

Fees or ExpensesFinancial Amount
Liquid Capital$90,000 to $190,000
Net Worth$1,000,000
Total Investment$941,000 to $1,335,500
Franchise Fee$39,500

The initial franchise fee is $39,500 with a 20% discount to open a second franchise. The initial franchise cost is nonrefundable, but if The Boiling Crab terminates your franchise agreement within 120 days they will refund you $31,600.

It’s important to note that the values provided are simply estimations; the overall cost of owning a Boiling Crab franchise will vary depending on a wide range of factors. Most notably these expenses will depend on the city / state you plan to open. Lease agreements, taxes, labor cost, and permits vary widely in cost from state to state.

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Dada Ngo, the company’s founder, is the CEO of the Boiling Crab business. Dada Ngo served as the company’s CFO from its creation until December 31, 2013. On January 1st, 2014, she was appointed CEO and President. She juggled positions with her husband Sinh, who served as CEO until December 31, 2013.

Additional Cost Breakdown

Other than the initial investment costs, below is a list of additional fees you may encounter. Again, these figures are only estimates that may vary depending on the location and a variety of other factors.

Royalty Fee5% of gross sales
Marketing Fees0.5%
Local Advertising3% of gross sales
Co-op advertising feeNot to exceed 3% of gross sales
InventoryAt the moment, the Boiling Crab is not a supplier of any inventory items.
Booths and TablesMust be purchased from affiliates
Compliance Audit by Boiling CrabVariable
Interest on Late Payments1.5% per month
Remedial Work to Correct Unhealthy or Unsafe ConditionService charge equal to 25% of the cost of remedial or corrective work
Service charge for insurance The cost of purchasing replacement insurance plus 25%
Renewal Fee20% of our then current initial franchise fee
Transfer Fee – Area Development Agreement and Unit Franchise Agreement$10,000
Transfer Fee – Qualified Transfers$1,500 per qualified transfer
Public or Private OfferingsReasonable attorney’s fees up to $20,000 per Public or Private Offering
Additional Training After Opening Date$500/day
Indemnification and DefenseAll costs, variable
Alternate Supplier TrainingVariable, not to exceed $2,500
Mystery Shopper Fee$200-$500 per year
Management Fee$500/day

Keep in mind when buying a restaurant franchise, a substantial investment is usually required. All necessary equipment including food, ovens, proper food disposal machines, ventilation, and furniture are all the things that must be considered when buying a restaurant franchise.

Other costs to consider are associated with a franchise are royalty payments and marketing costs. While the seemingly endless list of costs may appear overwhelming, but it’s important to remember that this overhead is inline with most franchise businesses.

Average Sales / Revenue Per Year

In 13 years, the business has grown to over 20 restaurant location with an average annual sales per unit of $6 million. This is an incredible average sales number per restaurant. Part of this has to do with the product (seafood) that has higher cost ingredients. But another big piece of the success is the

Other data shows that the monthly gross revenues of existing Boiling Crab restaurants can range from $160k to $940k in a given month. Unfortunately, there is no data to show their annual systemwide sales yet so I needed to rely on estimates from reports found online.

Several factors can influence your profitability as a franchisee of Boiling Crab. Commercial lease costs in your area (which varies by location), local product demand, labor costs, and how well you manage your operations are all variable factors.

How Much Profit Does A Boiling Crab Franchisee Make Per Year?

You can expect an average revenue per year of $6 million with this franchise. It’s important to note that your profitability after expenses as a franchisee of Boiling Crab is influenced by a variety of factors.

While I can’t pinpoint the average profit after expenses for a Boiling Crab, I can confirm the seafood market is an attractive market. According to a report from Nation’s Restaurant News, seafood customers tend to have higher incomes, lean male, and are college educated. The average American eats 16 pounds of seafood per year.

Advantages of Franchising Boiling Crab

There is a great deal to think about before moving forward with your plans of franchising the business. Owning a Boiling Crab franchise as with any other restaurant, will have distinct advantages and disadvantages. I’ve outlined the upside right here to help you to more informed investment decision.

Are you looking for a restaurant franchise business that offers something other than the monotony of American food? Customers who desire something distinctive in their meals can get it in seafood restaurants, which offer a one-of-a-kind experience. When it comes to diet, seafood is generally healthier, and it assists people who are seeking lean meats and an alternative to ordinary cuisine.

The Boiling Crab is a casual seafood restaurant serving much different seafood such as shrimp, crawfish, crab, and oysters accompanied by the best spices, sauce, and extras. Seafood businesses offer interesting, savory cuisine with distinct and interesting flavors that break up the monotony of American cuisine.

Unique Experience

Have you ever been to a crab boil? Since I didn’t grow up in the South, I’d never experienced it before. Instead of being served on plates, meals are served on butcher paper and a bag of cooked seafood. This was a totally new dining experience for me.

The environment of The Boiling Crab can best be described as vibrant. If you’ve ever visited one of their locations in Southern California, you know the place is packed on the weekends. These restaurants are the ideal place to take a large group, have a conversation, and have a couple beers.

Territory Rights

With the Boiling Crab franchise, you will be able to operate within a protected territory. A territory usually provides you some level of exclusivity in a specific geographical area.

Typically, the franchisor will agree not to open another franchise inside the stated territory or may provide you exclusive marketing rights within that area. As a result, you will face less competition from other Boiling Crab franchisees and your business can grow more quickly.

Training and Support

Support is an essential component of its operations. Boiling Crab ensures that all of its franchises (both new and existing) receive the best possible support in order to run their franchise outlets. Support encompasses several essential parts of its operations, including training, marketing assistance, and grand opening.

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New Boiling Crab franchisees are taken through a rigorous and thorough training procedure that provides operators with hands-on understanding of how the franchise runs as part of its training program. This is known as the initial training and consists of around 14 hours of classroom coaching. This is followed by an additional sort of training (on-the-job) lasting approximately 124 hours. Both of these amount to around 138 total hours of training.

Aside from the initial training provided to new franchisees, continual training is provided to existing franchisees. This is intended to refresh their knowledge and operators current on restaurant industry trends and advances.

Challenges of Franchising Boiling Crab

Along with the benefits of owning a Boiling Crab franchise, there are challenges associated with starting any type of business. Here are some of the hurdles I see with this franchise.

No In-House Financing Arrangements

It is important to assess the company’s financial assistance programs. Those who want to purchase a franchise but don’t have the financial means to do so may want a dependable financial support program.

Many prospective franchisees have funding issues.

Unfortunately, the Boiling Crab franchise does not provide any of these. However, they may offer arrangements with third-party sources that provide money in crucial areas of business. This means they may refer you to independent lenders who may be able to assist you with finance, but this is not a guarantee.

Smaller Chain

Although a smaller chain may have more possibilities for expansion, this concept is not a globally recognized brand. Depending on where you open, you’ll need to do a lot more branding and marketing to get the word out in your town. You may need to spend more money and effort to promote your location. If you plan to open somewhere in Southern California, you’ll have better brand awareness in the market.

Rapidly Changing Menu Costs

The cost of seafood, including shrimp, crawfish, and crabs change regularly. The cost of seafood could quickly increase due to supply chain issues or fishing shortages in certain areas. This can cause a bit of frustration among customers since the price per pound of seafood will vary at each visit. This also means you’ll need to regularly update your pricing on a chalkboard menu to adapt to input costs.

False Expectations

Some people buy a franchise with the expectation of immediate success, maybe because of the success of other franchisees or success stories they’ve read online. These sorts of achievement, however, do not come without a lot of hard work and years of work.

Franchising, like any other business, demands a significant amount of time, effort, and dedication. When discussing what is required to run the firm, prospective franchisees should ask the franchisor to be realistic.

Managing the Business

Some people are more suited to running a business than others. They’ve managed a restaurant before and are passionate about service. Others mights running a franchise to be a draining experience. Franchisees should examine their capacity to run a firm honestly. If they discover they have little or no business management experience, they can seek specific assistance from the franchisor.

Is the Boiling Crab Franchise Right For You?

If you have the needed resources and would love to have seafood family-style dining then this business could be perfect for you. Before purchasing any franchise, you should conduct a thorough self-analysis. Be honest with yourself. Are you actually going to love owning a seafood restaurant?

One of the common misconceptions is owning a franchise is simple. This is absolutely not the case! While the franchise system will provide initial training and continuous support, you, the franchisee, must be prepared to manage the business.

Conclusion

Many people quickly dive into buying a franchise thinking that it’s a sure way to become a successful business owner only to discover later that they do not enjoy the business. The saying “know thyself” is undoubtedly true in this case. You should invest in a franchise in a field that you will enjoy for the next 10 years or so. It’s critical to identify your passions and the type of business that you might love.

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