Franchise Deep Dive: Red Robin’s Franchise Costs, Fees, Profit and Data

The well-known casual dining franchise targets middle-income, multi-generational customers with a unique approach to off-premise sales.

By Luca Piacentini1851 Franchise Managing Editor

8:08AM • 06/18/23

LAST UPDATED: May 22, 2023

FRANCHISE WEBSITE: https://www.redrobin.com/franchise-request

NUMBER OF LOCATIONS: 546

REPORTED COST TO GET IN: $1,865,000 to $4,115,000

REPORTED ROI (Item 19): N/A

Red Robin Gourmet Burgers, Inc. is a casual dining restaurant chain founded in 1969 that operates through its wholly owned subsidiary Red Robin International, Inc., and under the trade name Red Robin Gourmet Burgers and Brews. Red Robin pairs casual-dining with quality burgers, craft beers and seasoned French fries. The brand faces a lot of competition from well-known brands in the fast food industry, especially from the giants Burger King and Steak n Shake.

How Many Red Robin Locations Are There?

Red Robin’s beginnings started in a small tavern located in Seattle, Washington. The owner, Sam, was known to be in a barbershop quartet where he apparently loved the song “When the Red, Red Robin Comes Bob, Bob, Bobbin’ Along.” He decided to change the name of the tavern from Sam’s Tavern to Sam’s Red Robin.

In 1969, Gerry Kingen bought Sam’s Red Robin, and started putting food on the menu and calling the place a “Grownup’s McDonalds.” After 10 years of building the Red Robin concept, Kingen decided to franchise it, partnering with brothers Mike and Steve Snyder, who were considered regulars of Red Robin, to open up the first franchise located in Yakima, Washington.

In 1983, there were a total of 22 Red Robin locations. By 1985, that number exploded to 175 restaurants open across the U.S. and Canada. At present, Red Robin has over 546 locations all over North America, with 81% company-owned and 19% franchised. Red Robin is a publicly traded company that trades on NASDAQ under the ticker symbol “RRGB.” The brand was ranked No. 83 on Franchise Times’ Top 500 Franchises list for 2022.

What Is the Red Robin Business Model?

Red Robin aims to deliver memorable moments connecting family, friends and fun. By serving quality food and beverage in a casual, playful atmosphere, franchisees give guests the dining experience they want. Two-thirds of sales come from Gen X, Millennials and Centennials.

According to its website, Red Robin recently restructured its labor model to deliver a new hospitality model called Total Guest Experience (TGX). The brand has also streamlined its off-premises dining experience by leveraging technology and implementing a triple check for each order.

In 2021, Red Robin launched three virtual brands to boost off-premise ordering and also partnered with Donatos® pizza to provide an additional revenue stream for franchisees as well.

How Much Can Red Robin Franchise Owners Make?

Red Robin does not make any representations about financial performance or the past financial performance of company-owned or franchised outlets.

According to The Grub Wire, a Red Robin restaurant generates about $3 million in sales on average. That’s around 16% in earnings before interest, taxes, depreciation and amortization (EBITDA) on average. With these numbers, a Red Robin franchise owner makes about $480,000 a year before paying debt interest or taxes, or paying administrative staff.

How Much Does It Cost to Open a Red Robin?

The total investment necessary to open a Red Robin franchise ranges between $1,865,000 to $4,115,000.

Red Robin startup costs (Freestanding)

Initial Franchise Fee: $35,000

Building Construction Cost: $800,000–$1,500,000

Furniture, Fixtures and Equipment: $700,000–$950,000

Exterior Signage: $120,000

Additional Funds — 3 Months: $100,000–$200,000

Other: $465,000–$1,510,000

Total: $2,220,000–$4,115,000

Red Robin startup costs (standard/mid-size restaurant)

Initial Franchise Fee: $35,000

Building Construction Cost: $800,000–$1,500,000

Furniture, Fixtures and Equipment: $550,000–$950,000

Exterior Signage: $40,000

Additional Funds — 3 Months: $100,000–$200,000

Other: $340,000–$910,000

Total: $1,865,000–$3,635,000

What Is the Franchise Fee for Red Robin?

The initial franchise fee is $35,000.

Who’s On Red Robin’s Leadership Team?

What Helpful Articles Can I Read to Learn More About Red Robin?

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