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A Deep Dive Into the Food Franchises Shaq Owns
Want to be like Shaq but can’t dunk a basketball? Follow in the all-star’s entrepreneurial footsteps by investing in one of the many franchise opportunities he has been involved with over the years.
Historically, franchising and professional athletes have made a winning team. The franchised business model offers former pros the chance to invest their impressive earnings in a long-term, reliable and oftentimes passive investment. NBA star Shaquille O’Neal is one of the most famous examples of this match-up. With a reported net worth of some $400 million, much of which is tied up in franchising, O’Neal said he officially makes more annually from his business investments than he did from his $30 million-a-year basketball paycheck.
“The franchise is a simple model,” O’Neal told CNBC. “If it works, you follow the rules, and it will continue to work. If you stick to the values you’ve learned, you can’t go wrong.”
But it's not strictly business for O’Neal. In a 2021 interview in The Wall Street Journal, O’Neal said: “Whenever I do business, it’s not about the money. I heard Jeff Bezos say one time when he was talking – he says he makes his investment based on if it’s going to change people’s lives for the better. And once I started doing the strategy, I think I probably quadrupled what I’m worth now.”
So, the million-dollar question: which franchise concepts have been Shaq-approved? Here is a dive into his past and present portfolio.
Auntie Anne’s is a snack franchise known for its fresh, hot-out-of-the-oven soft pretzels, pretzel dogs, pretzel bites and beverages. In 1988, the brand was started when Auntie Anne Beiler and Jonas Beiler started selling pretzels and lemonade at farmers’ markets in Pennsylvania. The next year, the pair began franchising the idea. Today, Auntie Anne’s has 1,930 units and while O’Neal previously owned 17 of those locations — nine in Michigan and eight in Buffalo, N.Y — he just recently sold them. When it comes to his reasoning, he gave Earn Your Leisure podcast a hilariously honest answer: “I sold my Auntie Anne’s. Because Black people don’t like pretzels that much. So I had to switch it up.”
As a business model, Auntie Anne’s stands out by offering franchisees multiple venue options, whether it be opening at an urban street site, a college or university, a shopping mall, an outlet center, an airport, a train station, a travel plaza, entertainment center, food truck, pop-up store, or commissary location. The brand has also worked to diversify the menu and offer catering to provide varying income streams for owners.
The cost to open an Auntie Anne’s is between $146,050 to $523,500, including a franchise fee of $30,000. The liquid capital required is around $120,000, and the net worth requirement is $300,000. As of 2022, the average revenue per Enclosed Mall location was $636,952.
Krispy Kreme is an 83-year-old donut franchise with 363 units across the country. Known for its fresh, hot and melt-in-your-mouth donuts, the brand has a uniquely beloved reputation and was recently ranked the No. 1 most intimate fast food brand in MBLM’s Brand Intimacy 2022 Study, the largest study of brands based on emotions.
O’Neal only currently owns one location in Atlanta but says he would like to own many more and told The Wall Street Journal that Krispy Kreme is his favorite business endeavor. “I like doughnuts, and Charles Barkley loves doughnuts,” he said. “And he’s my biggest customer. I wanna be a large part of that business.”
The estimated total investment necessary to begin the operation of a Krispy Kreme franchise ranges from $440,500 to $3,410,000, depending on the type of location. Krispy Kreme requires you to have a net worth of at least 2 million dollars and a liquid capital of at least $300,000. The average Krispy Kreme franchise made $3.6 million in sales in 2021.
Founded in 1985, Papa John’s is one of the largest pizza delivery companies in the world with more than 5,000 stores around the globe. O’Neal owns nine Papa John’s pizza franchise locations, which equals holdings worth in the neighborhood of $7 million. In addition to franchising with the concept, O'Neal also acts as a celebrity endorser and a board member — he just recently resigned an endorsement deal worth $5.63 million.
The Papa John’s brand spent the past few years in hot water after its very public fallout with its founder John Schattner. While it's hard to say if Shaq has fully revitalized the franchise’s image, the company has seen a nearly 8% increase in franchise units over the past three years.
The initial investment to join a Papa John’s franchise comes in at $200,000 to $789,000, including an initial franchise fee of $25,000. The net worth requirement is $750,000, and the liquid capital requirement is $250,000. According to the brand’s 2022 FDD, the 2,219 franchised restaurants saw average unit sales of $1,120,496.
Five Guys, the fast-casual burger chain with 1,600 units worldwide, was founded in 1986 and started franchising in 2002. The company is known for its special burgers that are made-to-order and are always different, with a quarter of a million possible ways to enjoy a burger in the restaurant.
At one point, O’Neal really loved Five Guys and owned a whopping 155 locations, which represented 10% of the total company at the time. Today, he has divested his Five Guys stake and sold his franchises, which were probably worth upwards of $100 million.
The initial investment required for a Five Guys franchise ranges from $306,200 to $716,250 and includes an initial franchise fee of $25,000. Net-worth requirements come in at $500,000, and liquid cash requirements at $250,000. The company does not make financial performance representations.
Big Chicken is an up-and-coming chicken franchise concept started in 2018 by O’Neal himself. The brand specializes in mega-sized chicken sandwiches generously bulked up with items such as coleslaw and macaroni and cheese. O’Neal partnered with Authentic Brands, which is a brand development and entertainment group, and JRS Hospitality, a catering and events company, to kick off the venture.
O’Neal is a majority owner of the restaurant brand and has been involved in all aspects of building out the Big Chicken franchise, from naming the chicken sandwiches after people he admires, like the “Charles Barkley” to the sourcing of the supply chain. The Las Vegas-based chain can be found on two Carnival Mardi Gras cruise ships (a company in which O’Neal serves as the Chief Fun officer) and arenas in Seattle and New York, as well as in Las Vegas and Los Angeles. Overall, Big Chicken has already sold over 200 units since franchising last year.
The initial investment for the Big Chicken franchise ranges from $450,000 to $1.4 million. That includes the franchise fee, which comes in at $40,000.
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