How long has LJS been trading?

LJS was originally founded in 1989 as Long John Silver, and the first store opened in 1990 in Avondale.

Why did the change the name to LJS?

In 1997 the company re-branded to LJS as part of a total re-imaging program in the stores to primarily better reflect the high restaurant quality standards of product, and is reflected in the brand’s credo as a fish and chips and associated seafood café/restaurant.

What connection does LJS have with Long John Silvers in the USA?

None at all; LJS is a completely NZ founded, owned and operated business.

Why are the stores mainly in the shopping malls?

The majority of the Group’s stores are currently located in the foodcourts within most of the major New Zealand Malls, where there are high volumes of foot traffic generated by the Mall.  This has enabled the brand to gain good exposure and enabled brand awareness to grow substantially. The Company also currently has, and has had, various stand-alone fully-seated restaurant locations in prime inner city locations where there is a high volume of foot-traffic passing by.

Since the Group now has a presence in most of the major shopping mall locations throughout New Zealand, the Company is now ideally positioned for a controlled move towards new stand-alone stores, in order to take advantage of the previously untapped and very large after-hours dinner market currently not available to the shopping mall type stores.

What is the cost of a new store?

LJS does not charge a one-off or up-front franchise fee to purchase a new store. The turnkey store is sold only for the cost of building and equipping it to an operational level. Depending on whether the size of the store and whether it is in a Foodcourt or a standalone situation, the cost will generally range between $150,000 to $250,000.

How much can I borrow to purchase a store?

LJS is a pre-approved franchise for most major banks. It has a preferred franchisee relationship with some Banks that will provide more favourable lending terms and criteria than others as they have already looked into the LJS company and franchise system. In general LJS prefers Franchisee borrowing to be approximately 50% of the purchase price of the store, however if a franchisee has equity in any property that can be used to secure a higher level of borrowings then this will be considered on a store-by-store basis.

What Royalty Fees does LJS charge?

LJS franchise royalty fee are 6% of net turnover. This is one of the lowest of any other franchise business.

What is the difference between a store in a Mall Foodcourt and one not in a Mall?

A foodcourt store in a Shopping Mall is part of a group of food premises in a common dining area provided by the Malls. A standalone store is a self-contained store in its own building either by itself or part of a larger complex, containing its own dining area. Standalone stores are larger in size than Foodcourt stores because they have an internal dining area. Standalone store rents and occupancy costs are generally much lower than a Foodcourt store.

Is a Foodcourt store more profitable than a standalone store?

A Foodcourt store does not have a dining area and consists only of a shop front/servery area and rear preparation area, and the size of the store is typically between 35 and 45 square metres. In a standalone store the store also needs to contain a dining area, and the size of these stores are usually best suited to be around 100 square metres, although they can also be accommodated in either smaller or larger configurations depending on location and lease terms.

Why don’t I see LJS advertised on TV or radio?

LJS has and does periodically advertise on TV and radio, However, advertising is generally tailored to specific requirements of each store. In a foodcourt store a marketing fee is payable to the Mall to conduct the advertising of the Mall. Since they are already advertising to attract people to the Mall there is little need to advertise direct to customers to come to the store. Advertising most often takes the form of in-store marketing with promotions and visual merchandising to help attract customers and market share over the other competition in the Foodcourt. In a standalone store the opposite will apply where a greater advertising spend will be necessary in the form of direct marketing to advertise direct to the customer to build awareness of the stores location.

Is a Foodcourt store more profitable than a standalone store?

This is very subjective because it will vary from store to store depending on a number of factors and circumstances. A Mall has a captured market owing to its critical mass, and the Foodcourt will take a share of this market depending on its size, location in the Mall, offer, and other key physical attributes, and enjoys a relatively high level of customer traffic throughout the year. The market share of each store will be solely dependant on the brand, the offer and the strength of the operator.

A Mall’s foot traffic is relatively static due to limiting influences such as the demographics of the location, car-parking, etc., and in general remains at a fairly constant level throughout the term of the lease. Whereas for a standalone store the opposite will apply where there is initially a lower customer traffic due to the non-awareness of a new standalone store and the customer traffic must be built over a period of time.

In general terms, a Foodcourt store has an immediate but constant level of sales throughout the term of the lease with little or no growth, and has higher occupancy costs to pay for its captured market. A standalone store has no captured market and much lower occupancy costs, but sales must be built from a basic starting point, and should be expected to show constant growth over the term of the lease under strong and consistent management.

What else can we sell in an LJS store?

A Foodcourt store is limited to a specific product category use due to the other retailers in the Foodcourt, and this is the advantage of Foodcourts in that they have a range of different products and no other retailer is doing the same as anyone else. A standalone store generally has much looser restrictions enabling other products categories to also be sold, such as Sushi or frozen pre-packaged seafood retail seafood packs.

Can I own more than one store?

There is no restriction on the number of stores owned by a Franchisee, although LJS prefers a franchisee to have a proven record of operating an LJS store for a year prior to purchasing another store.