Zaxby's Franchise: Cost, Royalties, and What Owners Earn
TL;DR — Key Facts
- →Total investment: $517,000–$1,727,000 depending on format and whether you build or convert.
- →Franchise fee: $35,000. Multi-unit developers may negotiate reduced fees.
- →Royalty: 6% of net sales. Brand fund: 1.5% of net sales.
- →AUV ~$2.2M for the system. Southeast markets significantly outperform others.
Zaxby's: A Regional Champion Expanding Carefully
Zaxby's is a Georgia-based chicken franchise with ~900 locations concentrated heavily in the Southeast US - Georgia, Alabama, Tennessee, South Carolina, North Carolina, and Florida. The brand's AUV is among the highest in the chicken QSR category, partially because of its loyal Southeast customer base and college-town footprint.
The brand positions itself between fast food and fast casual - higher quality than traditional QSR chicken, dine-in focused, with strong sports bar adjacency (many locations near college campuses and SEC football markets).
Investment Breakdown (FDD Item 7)
| Cost Item | Range |
|---|---|
| Franchise fee | $35,000 |
| Build-out (leasehold improvements) | $350,000–$1,200,000 |
| Equipment | $100,000–$200,000 |
| Pre-opening training and travel | $5,000–$15,000 |
| Grand opening marketing | $10,000–$30,000 |
| Working capital | $20,000–$50,000 |
| Total (FDD Item 7) | $517,000–$1,727,000 |
Most locations open in the $700,000–$1,100,000 range. Second-generation restaurant conversions (taking over an existing kitchen build-out) reduce total cost by $200,000–$400,000 compared to a new construction. Multi-unit development agreements (5+ locations) can reduce the per-unit franchise fee.
Ongoing Fees and Unit Economics
Royalty: 6% of net sales weekly.
Brand fund: 1.5% of net sales - lower than most QSR brands.
AUV: ~$2.2M for franchised locations per Item 19. Top-quartile locations near major college campuses can exceed $3M annually.
EBITDA margins: 16–22%. At $2.2M AUV and 19% margin: $418,000/year pre-debt-service.
Debt service: On a $900,000 SBA loan at 10.5% over 10 years: ~$12,100/month = $145,200/year.
Net to owner: ~$273,000/year at median performance.
Geography risk: Zaxby's brand recognition outside the Southeast is meaningfully lower. Franchisees in new markets face higher ramp periods and must build brand awareness from scratch in addition to running the restaurant. Validate consumer familiarity with Zaxby's in your target market before committing. A location in Georgia starts with built-in recognition; a location in Ohio does not.
What Most Articles Get Wrong
Most franchise cost guides treat Zaxby's system AUV of ~$2.2M as a reliable projection for new franchisees. It is not.
The $2.2M AUV is a system average weighted toward the Southeast locations where the brand has operated for 20+ years and has deep consumer recognition. A new franchisee opening in a market where Zaxby's has no existing presence should expect an 18–36 month ramp before hitting system AUV. That ramp period - with full debt service running ~$12,000/month - is the primary financial risk for buyers who expand beyond the brand's core territory.
Before signing a development agreement in a non-Southeast market, ask Zaxby's for Item 19 data segmented by region or state. If they don't provide it, ask your franchise attorney to estimate ramp-period cash burn.
Location: The SEC Market Advantage
Zaxby's highest-performing locations share a cluster of characteristics: - Proximity to college campuses or large universities - the brand's core demographic is 18–35 - Sports bar adjacency - game-day traffic is a meaningful revenue driver - Suburban arterial road visibility with drive-through access - Southeast geography where brand recognition reduces marketing friction
ScoreVet's Youth Density Score evaluates the under-35 population concentration and university proximity for any target address - giving you an independent read on whether the trade area matches Zaxby's performance profile.
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This article is for informational purposes only and does not constitute financial, legal, or investment advice - consult a licensed professional before making acquisition or financing decisions.
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Score a franchise location free →By FundBizPro Editorial · Published 2025-11-12 · United States
Written by
FundBizPro Editorial Team
Backgrounds in commercial banking, SBA lending, and franchise industry research
The FundBizPro Editorial Team covers North American franchise costs, FDD analysis, site selection, and acquisition financing. Articles draw on current FDD filings and primary industry sources and are reviewed before publication. Content is educational only and is not a substitute for advice from a licensed professional.
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