Layne’s Soon to be Famous™ Chicken Fingers is known for its friendly service, iconic chicken fingers and secret sauce, but if you are a prospective franchisee, you likely want to know a little bit more about the inner workings of the franchise. Potential business owners with the brand will particularly be interested in the initial investment required to operate a Layne’s location, as well as the potential earnings they can look forward to. 

As a prospective franchisee researching a brand, one of the most important documents you'll encounter is the Franchise Disclosure Document (FDD). The FDD contains 23 items, all of which can help you discern how well a franchise brand fits your business goals. 

Let’s walk through each item on Layne’s 2023 FDD to better understand what information you can glean from each.

Item 1: The Franchisor, Its Predecessors, and Affiliates - This section provides an overview of the franchisor's business, track record and experience along with the industry the brand is situated in. 

• Layne’s is a restaurant chain that was formed in 2017. The brand’s predecessor, M.A.G. Systems, Inc., founded the concept in 1994, and the brand’s affiliate is Layne’s Kickin Chicken, LLC.

Item 2: Business Experience - This item details the business experience of the franchisor's key executives and management team. Franchisees often benefit from the expertise of the franchise leadership team, and leadership stability is a critical element in a franchise owner's long-term success. 

• Garrett Reed – Chief Executive Officer: Reed has been CEO since February 2017 and has served as President of Main & Main Capital Group, LLC in Frisco, Texas since January 2004. 
• Samir Wattar – Chief Operating Officer: Wattar has held this title since February 2021. He has over 30 years experience in the restaurant industry, with previous titles of Vice President of Supply Chain for Fuzzy’s Taco Shop from January 2019 through January 2021, along with VP Operations, VP Supply Chain and VP of Franchise Development with MOOYAH Burgers Fries and Shakes from August 2013 through December 2018.
• Ralph Reed – Chief Financial Officer & Manager: Reed has held this role since February 2018. He has also been the Chief Financial Officer of Main & Main Capital Group, LLC in Frisco, Texas since January 2003.  

Item 3: Litigation - This section discloses any relevant litigation history of the franchisor. 

• Layne’s has no litigation history to report. 

Item 4: Bankruptcy - This item discloses any bankruptcy history of the franchisor or its management. A history of bankruptcy could be an indicator of financial instability. 

• Layne’s has not been required to disclose any bankruptcy proceedings.

Item 5: Initial Fees - This section outlines the initial fees that a franchise owner must pay to the franchisor. This gives prospective franchisees an understanding of the initial investment required.

• The initial franchise fee for Layne’s is $35,000.

Item 6: Other Fees - This item details any other fees that the franchise owner must pay, including ongoing fees. 

• The brand requires an ongoing royalty fee of 5% of gross revenues, a brand development contribution fee of 2% of gross revenues, a local marketing fee of 1% of gross revenues and a number of other fees that vary based on each location’s needs or circumstances. 

Item 7: Initial Investment - This item provides prospective franchisees with a detailed estimation of start-up costs. It includes your initial investment and three months of working capital. It also acts as a comprehensive breakdown of where your investment funds will go.

• The total investment necessary to begin operation of a Layne’s franchise location ranges from $545,000 to $1,190,000.

Item 8: Restrictions on Sources of Products and Services - This section outlines any restrictions on where a franchise owner can source products or services for their business. The required suppliers could affect franchisees’ costs and this should be taken into consideration. 

• Layne’s provides franchisees with a designated approved supplier and distributor list for all items needed to construct and maintain the restaurant.

Item 9: Franchise Owner's Obligations - This item details the obligations and expectations of the franchise owner under the franchise agreement. 

Item 10: Financing - This section discloses any financing arrangements offered by the franchisor. This section is particularly helpful for those who require assistance with start-up costs. Layne’s does not provide financing. 

Item 11: Franchisor's Assistance, Advertising, Computer Systems and Training - This item outlines the support and training provided by the franchisor. Candidates should be looking for robust training and support infrastructure, including assistance with marketing, staffing, operations and more. 

• Before a franchise owner begins operation of their location, they can expect an initial training program for up to three individuals, on-site opening assistance and a list of approved suppliers.
• During the operation of a franchise owner’s restaurant, the franchisee can expect ongoing consultation and advice as well as ongoing training programs.
• The brand also creates advertising materials in-house and has clear stipulations for marketing, soft openings and grand openings of new locations. 

Item 12: Territory - This section details the territory rights granted to the franchise owner. Candidates will need to ensure the regulations align with their target market location.

• Layne’s territories are not exclusive and franchisees may face competition from outlets owned by the brand or other franchisees. 

Item 13: Trademarks - This item provides information on the franchisor's trademarks. This item is crucial to understand the brand and the assets that come along with it.

• Layne’s uses the iconic Astro Chicken as a clear indicator of a Layne’s location.

Item 14: Patents, Copyrights, and Proprietary Information - This section discloses any patents, copyrights or proprietary information owned by the franchisor. This can be another indicator of the unique value and competitive advantage of the franchise.

Item 15: Obligation to Participate in the Actual Operation of the Franchise Business - This item outlines the franchise owner's obligations regarding their participation in the operation of the business. Candidates should make sure these requirements align with their desired goals and work-life balance.

• Layne’s requires franchised locations to be supervised on-site by an individual you designated by the business owner as “Operations Manager.”

Item 16: Restrictions on What the Franchise Owner May Sell - This section details any restrictions on the goods or services the franchise owner can offer. Franchise owners should ensure these restrictions align with their business goals.

Item 17: Renewal, Termination, Transfer, and Dispute Resolution - This item outlines the terms for renewal or termination of the franchise agreement, transfer of the franchise and dispute resolution procedures. A franchise agreement is a long-term commitment and one that should be taken very seriously. 

• The term is five years. Franchise owners who are in good standing may renew for two consecutive five-year terms. 

Item 18: Public Figures - This section discloses any public figures used in promoting the franchise. Knowing this can help franchise owners understand the marketing strategies of the franchisor. Layne’s does not currently use any public figures. 

Item 19: Financial Performance Representations - This item provides information regarding the financial performance of existing franchise locations. Candidates can use this section to estimate their potential earnings. 

The information below shows the gross revenue for four franchised Layne’s locations from January 1, 2022 to December 31, 2022. 

• Location 1 - $1,570,330
• Location 2 - $1,745,490
• Location 3 - $776,234
• Location 4 - $ 1,384,650

Item 20: Outlets and Franchise Owner Information - This item provides information on the number of franchised and company-owned outlets in operation, as well as valuable insight into locations that have recently opened or closed. 

• Layne’s reported five franchised locations in operation at the end of 2022, along with four company owned restaurants.

Item 21: Financial Statements - This section provides the franchisor's financial statements. Review these with a financial advisor to assess the financial situation of the franchisor.

Item 22: Contracts - This item includes copies of all contracts the franchise owner will be required to sign. This section should be reviewed carefully with a franchise attorney.

Item 23: Receipt - This section includes a receipt acknowledging that the franchise owner received the FDD. Candidates typically have a minimum of 14 days to review the FDD before signing any agreements.

The FDD is a treasure trove of information, and as a prospective franchise owner, it's important to read the document fully and carefully to understand the obligations and expectations of the agreement. Potential candidates are advised to seek legal advice if needed. 

Becoming a franchise owner is a significant decision, but if you equip yourself with a thorough understanding, you will be well-positioned to make an informed choice. 

To find out more information on costs to buy this franchise, please visit https://1851franchise.com/layneschickenfingers/info.