Johnny Carino’s Grill is a fast-growing franchised casual dining restaurant with around 170 locations in 30 states, Bahrain, Kuwait, Egypt, and the United Arab Emirates as of 2008. It is full service and serves Southern Italian cuisine with pizza , pasta, shrimp, beef, chicken and pork. Most dishes are between $10 and $20. The restaurant brand and concept are owned by Fired Up, Inc., founded in 1997 and headquartered in Austin, TX. Fired Up owns about 50% of the restaurants, with the rest 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 open flame 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 worldwide.
Property and Location
A New Johnny Carino Typical Restaurant is a distinctively designed, freestanding, tile-roofed, custom-built Tuscan farmhouse with a few different models, each approximately 6,500 square feet on a 1.5-acre lot. You’ll typically find Johnny Carino’s in the suburbs or in a new, growing area, but not in the center of town or in an established area with no developable land. The restaurant is often in a prime, highly visible 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. After the restaurants are in operation for a few years, you sell the real estate and lease the property back. In this way, the company can obtain the capital to expand further.
Johnny Carino’s as Tenant
The lessee often signs a 20-year absolute triple net lease with a 10% rent increase every 5 years. When a property has a Fired Up corporate guaranteed lease, the rent increase is more conservative, for example, 1% per year. Revenue per location is in the range of $2.5-3 million in the first year, which is very decent. The building is typically priced between $2.5 million and $4 million and offers a cap of 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.