Captain D’s Seafood Franchise

Quality, innovation and strong support drive AUV growth for growing fast-casual seafood franchise 

Captain D’s is the No. 1 seafood chain by average unit volume in The QSR 50, the annual ranking by QSR Magazine. We received noteworthy recognition in the franchise industry by setting brand AUV records in 2012, 2013, and 2014, and 2015 marked our 5th consecutive year of sales growth. We are on track for another record year. So why is our iconic brand, which started in 1969, enjoying such massive success?

Our high-quality seafood, warm hospitality, and commitment to innovation have helped us grow revenue. In 2014, average revenue at franchise-owned locations was up 4.4% compared with the year before, topping $1 million. Per the 2020 FDD*, average gross sales for new stores opened in the past 2 years topped $1.5 million, and we believe there is still plenty of room to win more customers as we deliver our authentic seafood to new and growing markets.

What is driving our success?

Captain D’s is more than four years into a brand relaunch that honors the quality that has always set us apart from other QSR seafood concepts. This brand relaunch expands our menu to include healthy, grilled options and re- imaged decor to attract a new generation of diners who are seeking seafood as a fast-casual meal alternative.

We’ve added grilled items to complement our batter dipped fish and seafood recipes, classic side dishes and well-rounded full meals. All of these meals are offered at attractive price points which has helped us win and retain customers, while the increased variety has encouraged repeat visits. Our new restaurant design jettisons the “captain of the sea” look and uses bright colors to create a vibrant coastal atmosphere that evokes a sunny beachside resort destination.

The changes have spurred increased customer counts, higher average tickets and more customer frequency. While other QSR chains have struggled to maintain and grow AUV, Captain D’s is growing — and the growth is sustainable.

“We are at the beginning of what I expect to be a tremendous period of growth,” says CEO Phil Greifeld. “Nobody else provides quality seafood at the prices that we offer, and when competitors have tried — even huge competitors — they have failed to make inroads against us. In our markets, we own fast- casual QSR seafood. Seafood is growing as more people hear from their doctors that they need to consume more fish. What we are finding is that fast-casual seafood is new and growing in most markets.”

Seafood that is sustainable and authentic

The quality of our food is key to Captain D’s success, and our buying process has enabled Captain D’s to provide consistent, affordable, high-quality seafood. Captain D’s purchases both wild-caught and some farm-raised seafood, and we continuously monitor our suppliers to ensure quality and value for our guests and our franchisees.

Captain D’s uses wild-caught Alaska pollock for our batter dipped fish and grilled whitefish. Alaska pollock is a member of the cod family, fished in the Bering Sea, and is the world’s most sustainable food group; every Alaska pollock we sell is wild-caught and purchased from one of the world’s best- managed fisheries. Thanks to constant monitoring by fishery officials, as well as our own oversight, we are able to trace every fillet that Captain D’s serves all the way back to the boat that caught the fish and the section of the Bering Sea from which it was caught.

Captain D’s also closely monitors the processing facilities that clean and prepare the fish. Thanks to our negotiating power we are able to negotiate great prices while also guaranteeing ourselves the best cut of the fish — the fillet. Other restaurants typically receive trimmings that are pressed together into blocks, leading to the strange “fish stick” texture and square fish patties you may have experienced when buying cheap seafood from a fast food restaurant. Captain D’s batter dipped fish is shaped by nature — it’s the whole fillet, and you can snap it in half and see its natural flakiness. It’s the best part of the fish, and the natural texture and flavor of our fish has won us fans for decades.

Brand is poised for breakout growth

Captain D’s has more than 500 locations nationwide, with a large cluster of restaurants in the Southeast and an expanding footprint in other states. About half the restaurants are owned by franchisees. Unlike many other franchise systems, Captain D’s has a large number of corporate-owned locations, and we continue to build them.

“Some other franchise brands are selling company-owned locations, and asking only their franchisees to build new ones,” Phil says. “We don’t share that perspective. We don’t ask franchisees to do anything we’re not willing to do, including investing capital into growing the brand.”

Captain D’s wants to expand throughout the United States by partnering with franchisees. The brand has proven extremely versatile; we have top-performing locations in rural towns, in suburban enclaves and in dense urban areas.

We believe that seafood restaurants today have an opportunity similar to that of chicken restaurants in the 1970s. Forty years ago chicken was a small player in the QSR market; it was completely dominated by burgers. Customers wanted more variety, and today chicken restaurants are just as strong as burger places. The QSR seafood space has few competitors, so Captain D’s has plenty of room to grow.

“There is room for thousands of Captain D’s restaurants,” Phil says.

The cost to start a Captain D’s

Startup costs for a Captain D’s range from $1,005,600 to $1,223,600, not including the cost of real estate. Franchise candidates should have liquid assets of $350,000 and a net worth of $1 million.

*Please review our FDD Item 19 for further detail