Couple Hits the Sauce, Finds Barbecue Success
One year and $7,000 later, Ivey opened Virginia BBQ out of a former dress consignment house in Ashland, Va., and began cooking up typical barbecue fare like Texas beef sandwiches, chicken barbecue sandwiches and corn bread muffins.
After a writeup of the restaurant in the Richmond Times-Dispatch as the best barbecue in town, business exploded, and Ivey soon opened a second location. "We had lines out the door," he says. Ivey currently owns eight franchises in Virginia, with a ninth opening in Delaware in about two weeks.
Fast food, the largest U.S. frachise category, has exhibited the most new concept growth since 2003, according to a 2007 report by FRANdata. In a booming sector that includes household names such as McDonalds (MCD) and Wendy's (WEN), Virginia BBQ is doing what fast food does best: keeping business simple and cheaper than the rest.
The Cost Of Good Cookin'
For a restaurant, Virginia BBQ's franchise fee is considerably low, says Eric Stites, founder of Franchise Business Review. "125,000 is a very affordable food concept," he says.
Subway, for example, estimates its startup expenses at around $256,500. According to FRANdata, the average initial investment for a fast food franchise ranges from $200,000 to $2 million.
Virginia BBQ's $20,000 franchise fee includes use of the trademark along with a week of on-site and financial training. Equipment costs factor to about $65,000 and build-out costs -- which include plumbing, electricity and building permits -- come to about $40,000.
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