Johnny Carino’s Grill is a fast-growing franchised casual dining restaurant with approximately 170 locations in 30 states, Bahrain, Kuwait, Egypt and the United Arab Emirates since 2008. It is full service and serves Southern Italian cuisine with pizza, pasta, shrimp, beef, chicken and pork. Most dishes cost between $ 10 and 20. The restaurant brand and concept are owned by Fired Up, Inc., founded in 1997 and based in Austin, TX. Fired Up owns approximately 50% of the restaurants and the remainder is owned by franchisees. In 2007, Fired Up changed the name from Johnny Carino’s Country Italian to Johnny Carino’s Italian Grill to highlight its open kitchens and outdoor grills. The official website is carinos.com. Johnny Carino’s is expanding very quickly in California with 15 locations now. It currently has a development agreement with 15 franchise partners to expand the restaurant chain to more than 490 locations around the world.
Property and location
A typical new Johnny Carino restaurant is a distinctively designed, freestanding, tiled roof, custom built Tuscan farm building with a few different models, each approximately 6500 square feet on a 1.5 acre lot. You will usually find Johnny Carino’s in the suburb or new and growing area, but not in the downtown area or an established area with no developable land. The restaurant is often in a highly visible prime location with heavy traffic – main artery, corner lot, near or across from a major mall or mall. Fired Up works with about 20 developers to build new restaurants. Once the restaurants are up and running for a few years, he sells the property and rents the property. In this way the company can get the capital to expand more.
Johnny Carino is a tenant
The tenant often signs a 20-year absolute triple net lease with a 10% rent increase for every 5 years. When a property has a Fired Up corporate guarantee lease, the rent increase is more conservative, for example 1% per year. Revenues by location are in the range of $ 2.5-3M in the first year, which is very decent. The building is often priced between $ 2.5-4M and is capped at 7.25% to 7.5%.
Even though the franchise is expanding rapidly, it closed a few locations recently, for example 3 locations in Florida in 2007 and 1 location so far in Hampton, VA in 2008. This is not that unusual in the restaurant business.