Why Your Favorite Restaurant Will Never Come to Sioux Falls – And The Ones That Could Come
Whenever we do a Facebook poll and ask what restaurant you'd like to see in Sioux Falls, we seem to get the same answers over and over. The top answers are always Cheesecake Factory, Chick-fil-A, Dave & Buster's, and P.F. Chang's.
The last time we did a poll, we had over 5,000 votes. We asked "What restaurant would you like to see in Sioux Falls?"
I narrowed it down to the Top 11 and did some research to see why some of the restaurants mentioned will never come to Sioux Falls and which ones are actually looking for franchisees.
Many restaurants require franchisees to have a high net worth and a significant initial investment, so those factors could deter many prospective owners.
Some restaurants, like Chick-fil-A, is one of the cheapest to own, but their business model is very strict and they want hands-on owners, which could be the reason we haven't seen one in Sioux Falls yet.
Here are the reasons why your favorite restaurant will probably never come to Sioux Falls, and the ones that could come.
Cheesecake Factory restaurants are all company owned and operated. They do not franchise the business. CEO David Overton told investors that their site standards are high and they remain focused on A-plus sites in both new and existing markets.
So, don't plan on eating at a Cheesecake Factory in Sioux Falls any time soon.
According to their website, there are not any domestic U.S. franchise opportunities. They are currently looking for locations internationally. When they do start to franchise again, their standards are pretty high. You need a fully developed five year business plan based on a proven model of success, proven experience, unquestionable financial resources, and a proven positive internal culture.
Not only is Chick-fil-A one of the most successful fast-food chains, it's one of the least expensive to open. According to Business Insider, it generates more revenue per restaurant than any other chain nationally.
A franchisee only needs $10,000 to open a restaurant and it doesn't require franchisees to meet a certain net worth. Chick-fil-A will also pay for all startup costs including real estate, construction and equipment. The company then leases everything to the franchisee for an ongoing fee equal to 15% of sales plus 50% of pretax profit remaining.
Franchisees must be involved in the day-to-day operations of the restaurant, must be involved in community service and must go through a stringent interview process. Due to the company's beliefs, they mandate that every store must be closed on Sundays.
For more info on becoming a franchisee, click here.
In-n-Out Burger's president Lynsi Snyder told CBS news that the burger restaurant will never go public or franchise its restaurants. All restaurants are owned by the Snyder family. There are currently over 300 stores with locations in California, Nevada, Arizona, Utah, Texas and Oregon.
Golden Corral is currently looking for franchisees in Sioux Falls. According to their website, Sioux Falls is an "available market." According to Franchising.com, the franchise fee is $50,000, cash investment is $500,000 and you must have a net worth of $2.5 million. Your total investment could be as high as $5.5 million. They require that you or someone in your group have restaurant experience.
For more details on how to franchise Golden Corral, click here.
Joe's Crab Shack
There is not a lot of information available regarding franchising a Joe's Crab Shack, like franchise fee, net worth or total investment. One website says that many Joe's Crab Shack restaurants are located on waterfront property, and most locations offer patio seating and a children's playground. Sounds to me like this would be perfect for the Lake Lorraine development.
Unfortunately, Joe's Crab Shack filed for bankruptcy in 2017 and closed restaurants in Alabama, California, Florida, Illinois, Indiana, Michigan, Missouri, Nebraska, New Jersey, New York, Nevada, Oklahoma, Texas and Virginia. So, not only will it probably not come to Sioux Falls, it probably won't be coming anywhere anytime soon.
Prospective franchisees can get more info here.
To franchise a T.G.I. Fridays in the U.S., you would need to have a net worth of at least $3 million - $1 million liquid. A total investment runs between $2-$6 million. Franchise owners must provide financial statements, a 5-year marketing plan and have an understanding of the market where they would build. Franchise fees are $50,000. According to their website, selected markets are available in South Dakota.
For more info on franchising a T.G.I. Fridays, click here.
Bubba Gump Shrimp
The franchise fee, royalty fee and advertising fee are determined per location. A total investment required would be $2.5 million. Your minimum net worth needs to be at least $6 million. The potential market must contain demographics to support the concept including high numbers of tourists and families with children.
Again, Bubba Gump Shrimp is probably not a restaurant you'll see in Sioux Falls anytime soon.
Old Spaghetti Factory
The Old Spaghetti Factory is family-owned and operated. There are only 43 locations in the U.S. The restaurants are not franchised.
Good news. South Dakota is an "available market," meaning franchisees are welcome to inquire. You must have food service or multi-unit management experience, and a clear understanding of the real estate development process. Financial requirements vary by market, but the lowest requirements are $250,000 minimum liquid assets and $500,000 minimum net worth per unit.
For more info click here.
Steak 'n Shake
According to their website, South Dakota is available for development. The restaurant is open 24 hours a day. For the classic restaurant franchise your initial investment would be between $1,375,000-$2,135,000. Your net worth must be at least $1.5 million and liquid assets of $500,000.
For more info, click here.