QSR September 2022

BEST FRANCHI SE DEALS

RustyTaco NUMBER OF U.S. FRANCHISE UNITS: 32 NUMBER OF U.S. TOTAL UNITS: 36 TOTAL SYSTEM-WIDE SALES: $35,554,880 FRANCHISE AVERAGE-UNIT VOLUME: $1,099,722 TOTAL AVERAGE-UNIT VOLUME: $1,099,722 FRANCHISE FEE: 25,000 ROYALTY: 5 percent of gross sales

rant operates; and 5 percent of the restaurant’s gross sales accrued during the remainder of the initial term of the franchise agreement. If you fail to open the restaurant in compliance with the franchise agreement and/or development agreement (if applicable) on or before December 31, 2022, fail to submit the development costs to us within 120 days of opening the restaurant, or fail to build the restaurant in the design, to the specifications, and at the location approved, you will not qualify for the 2022 Pull Forward Incentive and your royalty fee with be 5 percent of gross sales for the term of the franchise agreement. SIZINGUPFROMTHESIDELINES: “Backed with more resources after being acquired by Inspire Brands, it’s hard to bet against this 36-unit brand becoming much bigger in coming years. With most markets open, and no end in sight to the taco-trend, franchisees have the opportunity to both pick prime ter ritories and ride the rising tide of consumer preference and increased brand recognition.” “I love this brand and its brand story. I also like the simplicity of the concept, ‘nothing fancy, just real flavor and cheap, too.’ While this brand hasn’t got the cache in its name that more mature brands enjoy, it does have the full strength of Inspire Brands behind it. That means the same economies of scale afforded to franchisees of brands such as Arby’s, Buffalo Wild Wings, Sonic, Jimmy John’s, Baskin-Robbins, and Dunkin’, will be found here. Also, Inspire offers some very powerful incentives to franchisees signing development agreements for store openings over the next 36 months.” THESKINNY: Founded in 2010 by Rusty Fenton and his wife, Denise, Rusty Taco merges the flavors and experience of a traditional taco stand with flexible prototype designs. The Inspire Brands-backed chain (Dunkin’, Sonic, Buffalo Wild Wings, Baskin-Robbins, Arby’s, and Jimmy John’s) has 36 locations across multiple states, with its newest store opening earlier this year in San Antonio. Unlike some other taco chains, Rusty Taco appreciates three strong dayparts, with a high percentage of sales coming in the morn ing thanks to an array of breakfast tacos. All tacos can also be ordered as rice bowls or salads, which helps spread occasions. To capital ize on recent trends, it also unveiled an elevated prototype complete with an on-site bar. The layout provides further dining and seat ing options. Other adaptations include mobile ordering and pickup through its app, website, and third-party. As the Council mentioned, Rusty Taco is a rare up-and-comer with the support of one of the country’s largest conglomerates. The company notes franchisees can invest in a new, emerging chain with ample whitespace, yet do so with the “comfort and security” of Inspire Brands’ engine. That includes shared services like development, supply chain, and marketing sup port. Multiple franchise agreements were signed in 2021, which will lead to growth throughout Utah, Nevada, Virginia, and Texas. Several new operators are already a part of the Inspire family. Tim

“ I LOVE THIS BRAND AND ITS BRAND STORY. I ALSO LIKE THE SIMPLICITY OF THE CONCEPT, ‘NOTHING FANCY, JUST REAL FLAVOR AND CHEAP, TOO.’ ”

RENEWAL FEE: 50 percent of then-current initial franchise fee MARKETING FEE: If established, the amount Rusty Taco specifies,

subject to the Marketing Spending Requirement. TOTAL START-UP COSTS: $531,900 to $897,450 FRANCHISEE INCENTIVES:

VETFRAN PROGRAM: The “VetFran Program” is designed to provide career opportunities for honorably discharged military veterans or wounded warriors. It applies if you are a veteran or returning service member (who has not previously signed, or had an affiliate that signed, a development agreement or franchise agreement with the brand) who qualifies. The discount is 50 percent off the initial franchise fee for each franchise agreement. Rusty Taco applies the prorated discount for each Franchise Agreement toward the development fee payable under your development agreement. Prospective franchisees may qualify for both the VetFran Program and the standard adopter incentive program. STANDARD ADOPTER INCENTIVE PROGRAM: Notwithstanding the first sentence of Section 4.2 of the Franchise Agreement, if you open the restaurant in compliance with the terms of the franchise agreement (including, but not limited to, Section 3.1 (site selection and on-site evaluation) Section 3.2 ( franchise site application), Section 3.3 (Lease of Building), Section 3.4 (Restaurant Designed and Build Out), Section 3.5 (Opening), Section 6.5 (Purchase Requirements), Section 6.6 (Purchases from Designated Sources), and Section 6.7 (Franchised Location; Vehicles), then the royalty fee will be amended as set forth below:

TIME PERIOD First 12 months of operation Months 13–24 of operation Months 25–36 of operation Remaining term of franchise agreement

Notwithstanding the foregoing, if you open the restaurant in compliance with the terms of the Franchise agreement at least three months before the opening date, then the royalty will be zero percent of gross sales accrued for the first six months that the res taurant is open for business, and the royalty rates described in the table above will apply beginning six months after the restaurant’s actual opening date. 2022 PULL FORWARD INCENTIVE: If Rusty Taco and you have already signed a pre-existing development agreement, or if the company and you sign a new development agreement, with a development schedule that requires you to open a restaurant in 2023 or later, and you sign a franchise agreement for and open that restaurant in compliance with the franchise agreement and development agree ment on or before December 31, 2022, and you submit development costs to the company within 120 days of opening the restaurant and build the restaurant in the design, to the specifications, and at the location approved, then the royalty fee will be zero percent of gross sales accrued during the first year (12 months) that the restaurant operates; 2 percent of gross sales accrued during the second year (13–24 months) that the restaurant operates; 4 percent of gross sales accrued during the third year (25–36 months) that the restau

Hortons NUMBER OF U.S. FRANCHISE UNITS: 637 NUMBER OF U.S. TOTAL UNITS: 637 TOTAL SYSTEM-WIDE SALES: $687,500,000 FRANCHISE AVERAGE-UNIT VOLUME: $1,200,000 TOTAL AVERAGE-UNIT VOLUME: $1,200,000

FRANCHISE FEE: $50,000 ROYALTY: 6 percent of sales

GUILLOCHE BORDER: ADOBE STOCK / SAIFUL, RUSTY TACO / HAIGWOOD STUDIOS PHOTOGRAPHY, TIM HORTONS

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