Farmer Boys looking ready to turn up more fertile Las Vegas territory

Riverside, Calif.-based Farmer Boys Food Inc. plans to keep expanding in Southern Nevada, beyond the four fast-casual restaurants already here.

The proposed fifth location is slated for the southwest corner of Centennial Center Boulevard and Tropical Parkway and will encompass 3,195 square feet. Already under contract with a franchisee, the location is subject to approval from the city of Las Vegas Planning Commission.

Ken Clark, president and chief operating officer of Farmer Boys Food Inc., estimated it could open by the end of the year if everything goes as planned.

“We would like to build other locations too,” Clark said. “There’s still plenty of room for us to grow in the city.”

Its home state of California has 68 Farmer Boys. The chain was founded in 1981, and the first Las Vegas restaurant opened in 2008 at 4450 N. Lamb Blvd. It serves all-day breakfast, sandwiches, melts, salads and desserts.

“The company is doing very well. We continue to expand and increase in sales,” Clark said. “We haven’t closed any stores in the last five years, and we don’t plan to.”

This year, the company expects to open five locations, including the Las Vegas restaurant.

“Fast-casual restaurants like Farmer Boys are one of the fastest-growing sectors within franchising, as increasingly consumers want to experience a higher quality of product without the full sit-down restaurant experience,” said Matthew Haller, spokesman for the International Franchise Association.

The quick service and fast-casual restaurant business line is the largest category of businesses within the franchising sector, with 20 percent of all franchise establishments, and accounts for 37 percent of franchise employment. This business line is forecast to contribute 26 percent of total output this year and grow close to 1.7 percent, adding 2,565 units, according to IHS Global Insight.

In Las Vegas, franchisee Jim Philippou owns the stores at 2341 N. Las Vegas Blvd. and 4450 N. Lamb Blvd. Sam Fangary owns those at 5955 S. Eastern Ave. and 5847 S. Decatur Blvd.

Fangary has owned his Decatur store since August 2009, and the Eastern location opened Jan. 7. Both are doing well and handle 300 to 500 transactions each day, with the average check being $8 to $10.

Philippou’s location on Lamb Boulevard — where he caters to an Air Force clientele — is thriving, but the North Las Vegas Boulevard store is struggling. He cited massive layoffs in the city of North Las Vegas as the main reason, as the store is near the city’s government buildings.

Philippou is contracted to open the new Centennial restaurant, but his ownership depends on financing.

“We’ve exhausted a lot of our financing trying to stay afloat at North Vegas,” he said.

If he and his brothers, who are partners in the restaurants, can swing it, Philippou is hopeful the Centennial location could be a hit because of its proximity to four high schools and a busy shopping center.

Eventually, he said, he’d like to own 10 Farmer Boys with his brothers.

In addition to his Las Vegas restaurants, Fangary owns two Farmer Boys in California and has been with the franchisor for 10 years.

“Vegas has been a very good market for us,” Fangary said. “We’ve been told by our customers that they’re glad we’re finally here.”

Total investment for a Farmer Boys location is between $515,575 and $795,505, which includes the initial $45,000 franchise fee, working capital and other expenses, assuming franchisees will lease the land and own the building and equipment. To qualify for the 20-year agreement, applicants need about $350,000 in liquid assets and a $750,000 net worth, not including the value of their home.

Farmer Boys Food Inc. charges a weekly royalty fee of 5 percent of franchisees’ adjusted gross revenue. Owners also will spend about $4,000 on their grand opening ad campaign during the first month of operation, and 1 percent of their adjusted gross income on local advertising on an ongoing basis. Franchisees also contribute 3 percent of their weekly adjusted gross revenue to the company advertising fund.

Contact reporter Laura Carroll at lcarroll@reviewjournal.com or 702-380-4588. Follow @lscvegas on Twitter.