Texas Roadhouse is one of the most popular casual dining chains in the United States. Known for its hand-cut steaks, fresh-baked bread, and lively atmosphere, it has built a strong customer base across the country. Many entrepreneurs look into this brand as a potential business opportunity. But one of the biggest questions is: how much money can a Texas Roadhouse franchise owner really make?
Is Texas Roadhouse A Franchise?
Before diving into earnings, it’s important to clarify something. Texas Roadhouse does offer franchise opportunities, but it is more limited than other restaurant chains. Most of the Texas Roadhouse locations are company-owned. According to the company’s public filings, around 90% of their restaurants are operated by the corporation itself.
However, there are still some opportunities for franchising, particularly in international markets or in select U.S. areas where the brand is looking to expand. These franchises are closely controlled and require approval from corporate leadership.
Initial Investment and Franchise Costs
To understand potential earnings, it’s important to look at the cost of starting a franchise. Like any business, you need to invest before you earn.
Texas Roadhouse Franchise Costs Include:
Initial franchise fee: Estimated around $40,000 to $60,000
Build-out and equipment: $1.6 million to $3 million
Initial inventory and supplies: $100,000 to $150,000
Signage, technology, and furniture: $200,000 to $400,000
Working capital: At least $100,000 to cover initial months of operation
Total Estimated Investment:
The total cost to open a Texas Roadhouse franchise is typically between $1.6 million and $3.6 million, depending on the location and size of the restaurant.
Royalties and Ongoing Fees
Franchise owners must also pay ongoing fees to the corporate office. This is common with most franchises and ensures that the brand remains strong and consistent.
- Royalty Fee: 4% to 5% of gross sales
- Marketing Fee: 2% to 3% of gross sales
These fees are paid monthly and are based on your total restaurant sales, not your profits.
Average Sales per Unit
The success of a franchise depends largely on how much money the location can bring in. Texas Roadhouse restaurants are known for high sales volume.
According to public data, the average Texas Roadhouse location generates around $5 million to $6 million in annual sales.
This is much higher than many other casual dining restaurants. This high volume is one reason why the brand is appealing to investors.
However, high sales don’t automatically mean high profits. Expenses must be deducted to determine net income.
Typical Operating Costs
Every restaurant has expenses. These can significantly affect how much money ends up in the owner’s pocket. Here are some typical operating costs for a Texas Roadhouse location:
- Food and beverage costs: 30% to 35% of sales
- Labor costs: 25% to 30% of sales
- Occupancy costs (rent, utilities, etc.): 8% to 10% of sales
- General and administrative costs: 5% to 7% of sales
Example Breakdown:
Let’s assume a Texas Roadhouse location earns $5.5 million in sales annually. Here’s a rough idea of how the expenses might look:
- Sales: $5,500,000
- Food and Beverage: $1,650,000 (30%)
- Labor: $1,375,000 (25%)
- Occupancy: $440,000 (8%)
- Admin: $275,000 (5%)
- Franchise Fees (royalty + marketing): $385,000 (7%)
- Total Expenses: $4,125,000
- Estimated Profit (before taxes): $1,375,000
Net Profit for Franchise Owners
From this example, a franchise owner could potentially earn around $1.3 million per year in profit before taxes. However, this number can vary widely depending on many factors:
- Location (busy urban area vs. small town)
- Local competition
- Operating efficiency
- Management experience
- Rent and labor costs in the area
Some locations may only earn $500,000 in net profit, while others in high-traffic areas may earn over $1.5 million.
Owner-Operator vs. Investor
Another factor to consider is whether you are an owner-operator or an investor-owner.
Owner-Operator: Runs the business full-time, is heavily involved in daily operations, and can keep more of the profits.
Investor-Owner: Hires a full-time general manager to run the restaurant. May receive less profit but has more freedom.
Texas Roadhouse prefers working with owner-operators, especially for U.S.-based opportunities. This helps maintain the brand’s strong reputation for customer service and quality.
Real-World Reports from Franchise Owners
Although specific income details can be hard to confirm, some franchise owners and former employees have shared insights.
One report from a franchise owner in the Midwest indicated they made about $1 million in net income annually.
Another source from an investor group suggested that well-run locations could generate 20% to 25% profit margins.
These numbers align with the earlier estimates based on average sales.
Is It Worth The Investment?
If you have the required capital and a good location, a Texas Roadhouse franchise can be a profitable business. The high sales volume and strong brand loyalty provide a solid foundation. However, it’s not a passive investment. Success requires time, energy, and hands-on management.
Pros:
- High average unit sales
- Strong brand with loyal customers
- Potential for large profits
Cons:
- High startup costs
- Limited franchise availability
- Requires full-time involvement
Conclution
So, how much does a Texas Roadhouse franchise owner make? It depends on many factors, but a well-run location can earn $500,000 to $1.5 million per year in profit. However, achieving this requires significant upfront investment, dedication, and operational skill.
If you are serious about becoming a Texas Roadhouse franchisee, it’s wise to contact the company directly, speak with current owners, and work with financial advisors to understand the full picture. Done right, it can be both a rewarding and profitable venture.
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