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FAQs

The Drunken Crab Franchise FAQs

FAQ Category Topic Navigation:

Selection Process | Timeline | Expectations | Training | Support | Site Location | Site Process | Investment | Build-out | Your Family | Marketing | Territory | Opening


SELECTION PROCESS

Q: What we are seeking?

A: A dedicated franchisee that will operate at least one restaurant under the name The Drunken Crab which features Louisiana-style shellfish and other seafood, along with a variety of drinks, including craft beer and wine. 

Q: What factors are considered when selecting a franchisee?

A: Our mission is to only award franchises to people who will be great operators. The single most important factor in the long-term success of the The Drunken Crab franchise program will be the quality of your franchisees. We’ve seen fantastic concepts fail because the franchisor did not follow best practices in the franchise award process. Conversely, we’ve seen mediocre brands succeed at a high level because the franchisor had the commitment and skills needed to recruit quality franchise owners.

Q: What do you initially look for in an ideal franchisee candidate?

The hard skills that we seek from our franchisee candidates are at least 5 years restaurant management experience, general computer literacy and accounting knowledge, a 720+ FICO, a high school diploma, a clean criminal record with the ability to attain a liquor license, physically capable to lift up to 50 pounds, $225K liquid, and bilingual preferred.

Q: What additional traits do you prefer a franchisee to bring to the table?

A: We look to find service and detail-oriented team players who are coachable, organized, and bring a can-do attitude.  They should have strong verbal and written communication skills.  We also look for candidates that are relationship-driven, process oriented, decisive, extroverted, and ultimately good listeners with basic HR knowledge.

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TIMELINE 

Q: How long does it typically take to open a restaurant after signing the franchise agreement and what factors affect this?

A: We anticipate that franchisees will typically open their restaurants approximately 6 to 12 months after signing the Franchise Agreement.  The factors that affect this are locating a satisfactory site, whether you construct a facility or lease a facility, obtaining a lease, construction of improvements to the site, financing, obtaining building permits, obtaining a liquor license, zoning and local ordinances, acquisition of sufficient inventory, weather conditions, shortages and any delays in installation of equipment, fixtures and signs.

Q: How does the approval process work in order for a franchisee to open their The Drunken Crab restaurant?

A: The approval for any franchisee to open their The Drunken Crab restaurant is depending on four key items.  These include an approval of the final construction, the installation of all equipment, inventory and visual branding elements, the franchisee having satisfactorily completed their pre-opening training, and the franchisee having hired and trained an adequate number of staff to successfully operate The Drunken Crab.

Q: What is the length of the franchise term?

A: The length of the franchise term is 10 years.

Q: How does a renewal or extension of the franchise term work?

A: If you meet certain conditions, you can enter into the then-current renewal Franchise Agreement for up to three additional terms of five years.

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EXPECTATIONS

Q: What type of involvement can I expect from the franchisor?

A: This typically depends on the needs of the franchisee, but we may furnish advice and guidance to you on the operation of your The Drunken Crab restaurant.  This may include helping you to develop your annual business plan and conducting site visits.  We will also provide additional training if you request it, or if we determine that it is necessary.  We may also prepare and disseminate promotional and advertising materials for your use, as well as establish and administer or engage a vendor to administer a gift card or other customer loyalty program.

Q: What type of involvement will the franchisor expect from me?

A: We will provide yearly refresher training, which you would be required to attend.  We may also organize franchisee meetings periodically, which you may be required to attend as well.

Q: What is the obligation to participate in the actual operation of the franchise business?

A: We require that you or an operating manager who has successfully completed initial training directly operate your The Drunken Crab restaurant.  If you have not previously owned or managed a restaurant, we may require that you designate an operating manager. 

Q: What are the requirements for an operating manager?

A: The operating manager must live within 30 miles of your The Drunken Crab restaurant and work actively in your The Drunken Crab restaurant.  Your operating manager is subject to our consent.  If your operating manager is terminated or elects to end his or her relationship with you, you must recruit a new operating manager within 30 days and submit his or her qualifications to us for review and consent.  The operating manager must own at least 10% of the equity in the franchised business.  You may also have a general manager overseeing the daily operations of the restaurant and an assistant manager.  We require that you, your operating manager, your general manager and your assistant manager, if you have them, complete initial training to our satisfaction.

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TRAINING

Q: Who will conduct the training?

A: Our senior management personnel or our trainers will conduct initial training.  Instructors have a minimum of five years of experience in the field and four years with us or our affiliates.

Q: Is any additional training required?

A: We require you and certain of your personnel to attend refresher training for up to five days per year, which will take place at our headquarters in North Hollywood, California or another location we designate.  We may also require you to attend a national business meeting or convention for up to three days per year. 

Q: Will I receive assistance with budget development?

A: Yes, during the initial training, developing an operating budget with the franchisee for their first six months in operation is standard.  The budget would focus on key targeted metrics such as marketing, food costs, labor costs, paper costs, average ticket per customer, take-out and delivery, and restaurant maintenance.

Q: What will be included within the initial training?

A: The initial training program will include a combination of classroom sessions and hands-on experience working in one or more of the fully operating The Drunken Crab locations.

Q: What happens after the on-site training team leaves?

A: Once the onsite training team leaves, weekly calls would be scheduled with the franchisee over the first four months of operation.  The calls would be led by the franchisee’s field business consultant, and would focus on the franchisee’s progress to plan on a weekly basis.  Action plans would be developed for any areas in which the franchisee is falling behind their development plan.  A representative of the franchisor would also visit the franchisee once a month during their initial four months in business.  Provided the franchisee is operating at or above their plan by the end of their fourth month, the weekly calls would be moved to every two weeks for the final two months of the QuickStart program.  Additional training via the learning management system, by phone, or in person would be scheduled every other week as well.

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SUPPORT

Q: What will be included within the ongoing support?

A: This ongoing support may be in the form of updates to our manuals, newsletters, bulletins, written reports and recommendations, refresher training programs, and/or telephone contact.  However, nothing can replace the value of face-to-face contact, so one of our representatives may also visit you to provide hands-on support in the continued development of your business and to ensure adequate quality controls are being maintained by you and your staff.

Q: What is the goal of a QuickStart program?

A: The goal of a QuickStart program is for the franchisee to feel they are strongly supported by the franchisor post-training, and that they have a pre-determined path to profitability over their initial six months of operation.  The intensive coaching in the QuickStart phase can help validate for the franchisee the benefit of reviewing monthly income statements in depth, the need to track marketing effectiveness, and the value of peer benchmarking as a guide to identifying and pursuing best practices generated by the franchisee community.

Q: Is there a corporate website that a franchisee can access?

A: Yes, we have established a corporate website that provides extensive information about The Drunken Crab.  Your location will be listed on this website for consumers who live in your area.  The website is a great reference tool for potential guests and a good marketing tool as well.

Q: What other assistance should I expect to receive down the road?

A: We will provide you with advice and written materials concerning techniques of managing and operating your The Drunken Crab franchise from time to time, including new developments and improvements in restaurant equipment, food products, packaging and preparation, and menu items.  We will continually conduct market research and testing to determine new consumer trends and salability of new and upcoming products.  Any new developments that prove to be effective will be passed along to all franchisees.

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SITE LOCATION

Q: How does the site selection work?

A: We will provide you with assistance in selecting a location for your The Drunken Crab restaurant.  We may select one or more real estate tenant representative firms that can assist you in locating acceptable sites, and if we do so, you must retain the services of such firm or firms.  You select the location for your business subject to our acceptance.

Q: Do you own or lease out premises to franchisees?

A: No, we do not own premises or lease them to franchisees. 

Q: What factors do you consider when accepting a site location?

A: In general, the factors that we may consider include the general location and neighborhood of the business, zoning of the site, demographics, locations of any other seafood restaurants in the general area, proximity of complementary businesses, traffic flow, parking, rent, size, layout, physical characteristics of the location and lease terms.

Q: How long do I have to submit a location after signing the Franchise Agreement?

A: You must submit a proposed location acceptable to us within 150 days after signing the Franchise Agreement.  We will accept or reject your proposed location within 30 days after receiving the request and all of the information we require concerning the proposed location.  You must obtain our consent and sign a lease for that location within 180 days after signing the Franchise Agreement.  If we cannot agree with you on a proposed site, then you must find another site and request that we accept it.

Q: How long do I have after signing the Franchise Agreement to open my new store?

A: You must open your The Drunken Crab restaurant within 12 months after signing the Franchise Agreement or 60 days after you have successfully completed training, whichever is earlier.  If you are converting an existing restaurant into a The Drunken Crab restaurant, you must open your The Drunken Crab restaurant within 120 days after securing our consent to the location.

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SITE PROCESS

Q: What are the location selection guidelines and how does the site selection process work?

A: We will assist you in your efforts to select and obtain a site; however, you are ultimately responsible for selecting and securing a site, negotiating a lease, and building out the site.  We will review any sites you identify as potential locations for your Drunken Crab franchise. The location must fulfill all franchise requirements, such as adequate space, size, parking lot size, zoning, etc.  The ideal site is 4,600–7,000 square feet, ideally with a patio.  Inside seating will range from 120–150, including the full bar area.  Commercial centers, strip centers, standalone and any other sites that have adequate foot traffic and parking are all possible locations.

Q: What is expected from a franchisee during this process?

A: We expect the franchisee to know the history of the area, business trends, predicted future business trends, employment issues, and proposed traffic flow changes.  It is recommended that you visit with your city or county offices to understand possible changes coming to the proposed community.  Once we have accepted a location, you must negotiate a lease to secure the property.  You are strongly encouraged to retain an experienced real estate attorney to help negotiate the final lease terms and to ensure you fully understand your rights and responsibilities under the lease.

Q: What happens after a location has been secured?

A: Once you have secured a space, you will need to develop a floor plan, including equipment layout, for your business.  You will work with our corporate-approved architect to help you determine the best layout possible.  Once we have reviewed and approved the design drawings, the architect will proceed with creating construction drawings, including architectural, mechanical, electrical, and kitchen drawings. These drawings must also be submitted to us for review when they are complete. We will provide prompt feedback regarding the approval of the plans.  These drawings will be used to submit to local authorities for permits and will also be used to submit to contractors for pricing.

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INVESTMENT

Q: What is the franchise fee?

A: Our franchise fee is 35k.

Q: How much will it cost overall?

A: The total initial investment necessary to begin operations ranges from $545,500 to $1,769,000.  This includes the franchise fee.

Q: Are there any incentives for military veterans?

A: Franchisees who are veterans of the U.S. military who have been honorably discharged pay a reduced initial franchise fee equal to 80% of the initial franchisee fee for their first Drunken Crab franchise.

Q: Are there any additional incentives for opening up more than one location?

A: Franchisees that are subsequently granted the right to develop additional locations after their first location is already open pay a reduced initial franchise fee equal to 80% of the then-current initial franchise fee.

Q: How many square feet are these estimates based off of?

A: The estimates in this chart are based on a restaurant with approximately 4,600 to 7,000 square feet.

Q: What else is included in the estimated costs?

A: This estimate includes amounts needed for construction, remodeling, decorating costs and any other leasehold improvements. This estimate is also based on a restaurant with approximately 4,600 to 7,000 square feet.  The amount of initial inventory you purchase will depend on the size and type of geographic location of your The Drunken Crab restaurant and the demographics of the population in the area.

Q: Do you require franchisees to hire an accountant or bookkeeper?

A: We do not require you to hire an accountant or bookkeeper we designate, but you must use our mandated chart of accounts, income statement and balance sheet format in preparing financial statements.  If you are not tracking information and generating financial statements in a manner consistent with our requirements for financial reporting and analysis, we may require you to use an accounting firm that we designate for accounting services.  You must submit financial statements and reports we require in the format we designate.  We may also require you to use a designated firm for financial reporting and analysis.

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BUILD-OUT

Q: Can I hire my own contractor?

A: Yes, but you still must use one of our designated architects to work with you to develop floor plans and construction drawings for your The Drunken Crab restaurant.  You must also use contractors who meet our standards and qualifications for contractors, including that the contractors be commercially licensed and insured and have experience in building restaurants.  We may identify contractors that meet our standards and specifications, but you will not be required to use the contractors we identify, and you will retain the final decision in hiring a contractor.  We also reserve the right to review the construction process and require you to submit to us the construction bids you receive.  Once full construction documents have been developed and approved by the landlord, we recommend that you obtain a minimum of 3 construction bids for the build-out of your location.  Obtaining multiple construction bids will help to ensure a competitive price to build out your location. You are permitted to select the contractor of your choice.

Q: What are the design features expected for a new location?

A: The Drunken Crab locations are designed to be a destination for both special occasions and an everyday gathering place. While there are standard design elements within each restaurant, the locations are designed to have their own look and feel. The goal is for each restaurant to integrate into the local community, building relationships with local organizations, sports teams, and civic groups.

Q: Will I receive assistance with development from an architect?

A: Yes, we will designate one or more architects with whom you must work to develop floor plans and full construction drawings for your location and deliver prototype drawings for a conceptual appearance of a The Drunken Crab restaurant.  We will then review your architect’s floor plans and full construction drawings for your The Drunken Crab restaurant. 

Q: Will I receive help identifying the right contractors?

A: Yes, we will prescribe standards and qualifications for you to identify contractors.  Once a franchisee selects their contractor, it is recommended that a representative of the franchisor, the franchisee, and the contractor schedule a face-to-face meeting to discuss specifics of the construction process.

Q: Will I receive any construction assistance?

A: Yes, once you have secured a site, we will then provide input on how to best build out the location as a The Drunken Crab restaurant, including specifications and layouts.  These specifications will cover the requirements for dimensions, design, image, interior layout, décor, fixtures, equipment, signs, furnishings, and color scheme.

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YOUR FAMILY

Q: How does my spouse factor into the agreement?

A: The spouse of an individual franchisee (and the spouse of each owner of a franchisee that is an entity), must sign a spousal consent.

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MARKETING

Q: Will I receive assistance with advertising for the grand opening?

A: Yes, we will assist you in devising your grand opening advertising promotions strategy.  We do require that you spend at least $15,000 on grand opening marketing.  We may also require franchisees to form local marketing cooperatives when unit development in the marketing area makes such an option feasible.  If such a marketing cooperative is formed in your area, we may require that you contribute to the cooperative up to 50% of your revenues allocated to local advertising.

Q: What marketing assistance can I expect after the grand opening?

A: We will provide you with marketing recommendations detailing the use and development of The Drunken Crab brand.  In addition, we have developed a variety of advertising materials and sales aids specifically designed to promote The Drunken Crab concept.  You will be able to order the advertising materials and sales aids you will need to carry on effective marketing efforts.

We will also provide ongoing assistance with marketing programs that can be used in your local area.  Prior to the use of any marketing material developed by you for your market, you must first submit the proposed material to us for review. 

Q: Can I use my own advertising materials?

A: Yes, you may use your own advertising materials, such as point-of-purchase materials and menus, but we must review beforehand and consent to their use.  You must submit such advertising materials to us at least 10 days before disseminating them.

Q: Do you offer a system marketing fund?

A: Yes, we have established a system marketing fund to which you are required to contribute.  Currently, the franchisee must contribute 2% of their gross revenues to that system marketing fund, but we may increase this amount to up to 4.5% of gross revenues.  We may elect to disseminate advertising through television, radio and print media such as magazines, billboards, flyers or mailers and newspapers.  The media coverage will initially be local in scope, but may expand to be regional and national.  We may use the system marketing fund to employ outside public relations consultants or advertising agencies to assist in the development, production and dissemination of advertising materials.  We may also use the system marketing fund to develop promotional and advertising materials for your use.  We may also use these funds on the development of web sites, search engine optimization, brochures, and slides and other materials.  No expenditures will be made from the system marketing fund principally to solicit new franchise sales.

Q: How long does it typically take to open a restaurant after signing the franchise agreement and what factors affect this?

A: We anticipate that franchisees will typically open their restaurants approximately 6 to 12 months after signing the Franchise Agreement.  The factors that affect this are locating a satisfactory site, whether you construct a facility or lease a facility, obtaining a lease, construction of improvements to the site, financing, obtaining building permits, obtaining a liquor license, zoning and local ordinances, acquisition of sufficient inventory, weather conditions, shortages and any delays in installation of equipment, fixtures and signs.

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TERRITORY

Q: What territories are currently available?

A: Currently we are only approving site locations based in the greater Los Angeles area.  By the year 2021, we will then allow site locations in other areas of California and abroad.  Our end goal is to expand globally to select countries around the world.

Q: What are the specifics of the territory agreement?

A: You will receive the right to operate a The Drunken Crab restaurant at a location in your protected area.  Your protected area will have a population of at least 30,000 people at the time you sign your Franchise Agreement.  Your area will be defined by zip codes. 

Q: What are the specifics behind the territory agreement?

A: We will grant you the right to conduct business operating a restaurant under the name “The Drunken Crab,” a design logo using the same words as seen on the cover page to this Franchise Disclosure Document, and related trademarks.  You must also use other trademarks which we develop or prescribe to identify your business and its services and products.  By trademark, we mean trade names, trademarks, service marks and logos used to identify your business, its services and its products.

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OPENING

Q: What utilities and services will be needed to set up before opening a new store?

  • A: Utilities:
    ·       Electricity 
    ·       Gas 
    ·       Water and sewer 
    ·       Telephone [3 ROLL-OVER LINES, LAST BEING THE FAX] 
    ·       High-speed internet 
    ·       Wi-fi (for business use)
        Regular services:
    ·       Video surveillance
    ·       Beer line cleaning by vendors weekly
    ·       Cable television set to sports stations
    ·       Pandora music subscription service (Top 40s on the weekend, classic rock, and something beachy and fun/upbeat when slower)
    ·       Grease trap cleaning/removal every 4–6 months (will also depend on your local requirements), and oil changed in-house twice a week
    ·       Linen service for floor mats, kitchen towels, aprons
    ·       Hood cleaning every 3–4 months
    ·       Knife sharpening service
    ·       Ecolab for pest control monthly
    ·       Ecolab for dishwasher (chemicals, rental and maintenance)
    ·       Local ice machine company (rental and maintenance)
    ·       Cleaning service for daily detail cleaning (HIGHLY recommended)
    ·       HVAC/Refrigeration preventive maintenance contract quarterly
    ·       Trash collection
    ·       Minimum pest control monthly
    ·       Payroll service
    ·       Ansul system every 6 months

Q: What are the required licenses, permits, and certificates that may need to be secured before opening?

A: You are required to obtain a state sales tax permit/vendor’s license, a federal tax ID number, and a full liquor license.  Other typical permits, certificates, and inspections that may be required would be for construction, electrical, plumbing, gas line, HVAC and hood, fire, occupancy, signage, zoning, food handler, and alcohol awareness certificate program.  You must also operate in full compliance with the laws and ordinances that regulate businesses, such as workers’ compensation insurance, unemployment insurance, withholding and payment of income taxes, social security taxes, and sales tax, as well as any health and sanitation expectations.

Q: Am I required to attain all of these permits myself?

A: Although the contractor you hire will take care of most of these permits, it is far better to ask too many questions at this time instead of not enough.  Do your homework and personally call the city if information is unclear on the permitting process.  In addition, during the permitting process, it is a great time to acquire all needed ID numbers and accounts for employment taxes and workers’ compensation insurances.

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