Alamo Drafthouse Cinema Franchise FDD, Costs & Fees (2024)

KEY FRANCHISE STATS

All you need to know about this franchise in a snapshot

Initial franchise fee
$125,000
Investment required
$5,048,000 - $16,113,000
Royalty fee
5.00%

Alamo Drafthouse Cinema: A Unique Cinematic Experience

Alamo Drafthouse Cinema is a leader in the movie theater industry, celebrated for its innovative blend of cinema and dining. Founded in 1997 by Tim and Karrie League, the first theater was located in a converted parking garage in Austin, Texas. This inaugural location introduced a novel experience by combining second-run films with a unique food and drink service directly to patrons' seats.

The Alamo Drafthouse quickly gained acclaim for its distinctive programming, which included silent films with live musical accompaniment, food-themed movie nights with matching dinners, and special events with film retrospectives and director talks. This comprehensive approach to cinema played a key role in its expansion.

The franchise began expanding in 2003, with the first location outside Austin opening in Houston, Texas. Today, Alamo Drafthouse has numerous locations across the U.S., known for its strict no-talking and no-texting policy, high-quality food and beverage service, and curated pre-show entertainment. This policy, along with its unique events and programming, has garnered national attention and acclaim.

Alamo Drafthouse has received accolades such as "Best Theater Ever" by Time Magazine and "The Coolest Theater in the World" by Wired. The franchise continues to grow, committed to providing a memorable movie-going experience that combines great films with high-quality dining.

Initial investment

Here's what you would need to invest if you were to start this franchise. These costs are provided by the franchisor in the Franchise Disclosure Document.

Alamo Drafthouse Cinemaoffers 3 types of franchises:

Type of Expenditure Amount
New build Alamo Drafthouse Cinemas franchised venue (where you own the land and building) $13,330,166 to $16,112,868
New build Alamo Drafthouse Cinemas franchised venue (where you lease the building) $5,330,166 to $8,112,868
Conversion Alamo Drafthouse Cinemas franchised venue (where you lease the building) $5,048,133 to $8,194,684

We are summarizing below the main costs associated with opening a new build Alamo Drafthouse Cinemas franchised venue.

For more information on the various types of franchises and its costs, refer to the Franchise Disclosure Document (Item 7).

A new build Alamo Drafthouse Cinemas franchised venue

Type of Expenditure Amount
Initial Franchise Fee $125,000
Design or PIP Fee $7,500
Land Highly Variable
Carrying Costs Highly Variable
Site Work & Building $8,537,666 - $9,436,368
Furniture & Equipment $3,638,000 - $4,494,000
Pre-Opening Marketing and Promotion $150,000 - $300,000
Deposits $100,000 - $150,000
Initial Inventory $100,000 - $150,000
Training $155,000 - $260,000
Business Licenses & Permits $10,000 - $30,000
Liquor Licenses $7,000 - $160,000
Additional Funds $500,000 - $1,000,000
Total for a Single Franchise $13,330,166 - $16,112,868

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Number of units

2023
Franchised units

22

21

21

Company-owned units

19

16

17

Total units

41

37

38

Franchise Disclosure Document

Training 

The franchisor provides a comprehensive training program for franchisees, including:

Initial Training Before the venue opens, the franchisee's Principal Correspondent, along with all Managers and Assistant Managers, must complete the franchisor's initial training program satisfactorily. This training is conducted by the franchisor or its designee in Austin, Texas, or another specified location if it is the franchisee's first venue. An initial training fee of $5,000 per attendee is payable in advance by the franchisee.

Opening Assistance For the first venue, the franchisor offers opening assistance, deploying 12 to 24 trained representatives. These representatives provide on-site pre-opening and opening training, supervision, and assistance from two weeks before to two weeks after the opening. The franchisee must reimburse the franchisor for all incurred costs, including travel, lodging, meals, and wages for the personnel.

Additional and Remedial Training The Principal Correspondent, Managers, and other designated personnel of the franchisee must attend any additional training programs as required by the franchisor. These programs, which may be operational in nature, are conducted at the headquarters or a certified training venue in Austin, Texas, or another designated location. The frequency, duration, and mandatory nature of this additional training vary, and the franchisor may charge a reasonable fee for participation.

Territory Protection

The Alamo Drafthouse franchise does not grant exclusive territories in the traditional sense. Instead, it provides territorial protection by agreeing not to establish or authorize another venue within the immediate vicinity of a franchisee's location. This vicinity, termed the "Territory," is defined in the franchise agreement and may extend up to a 3-mile radius from the franchisee's venue.

Although this agreement limits direct physical competition from other Alamo Drafthouse venues within the Territory, it does not restrict the franchisor's ability to engage in other forms of sales, such as online or direct marketing, within the same area.

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