This Franchise Is Cutting Its Royalties to Find Its First Franchisees

By Tam Goldsmith

Evergreens is reducing royalties for its first franchisees as it takes a 14-unit company-owned restaurant business into franchising.

Evergreens spent more than a decade running its own restaurants before turning to franchising. Now it is offering cheaper royalties to the operators willing to go first, putting a price on the additional risk carried by a brand's earliest franchisees.

Evergreens has spent more than a decade building its salad, wrap and bowl business through company-owned restaurants. Now that it wants franchisees, it is offering its earliest recruits something later operators will not get: cheaper royalties.

The Seattle-based company currently operates 14 restaurants and is seeking franchisees across 12 Western states. Operators who sign qualifying development agreements during 2026 can receive a 3.5% royalty on restaurants opened in 2027 and 4.5% on those opened in 2028, before the standard 5.5% rate applies.

Giving up royalty income just as a company begins franchising may sound like an odd way to start. Yet Evergreens is asking its first franchisees to accept uncertainty that operators joining a more established network will never face. Reducing their royalties gives that additional risk a financial value.

The First Franchisees Have More to Prove

Evergreens was founded in 2012 and already has years of restaurant experience behind it. The company says comparable sales increased 4.5% in 2024 and 9.2% in 2025, while the top half of its company-owned restaurants, excluding airport locations, averaged more than $1.45 million in annual sales last year.

That operating history is useful, but running company restaurants does not automatically prove that a company can franchise them successfully. Evergreens must now train independent owners, help them select locations, support openings and solve problems in restaurants operated by people who have invested their own money.

The first franchisees will discover how well the company handles that transition. Future recruits will have existing franchisees to call, franchised locations to visit and several years of evidence showing how the relationship works. The first group is buying before any of that exists.

The Discount Could Be Worth Real Money

Evergreens says opening an initial restaurant could require an investment of between $649,000 and $1.1 million, including a $45,000 initial franchise fee. The company is also looking for operators prepared to commit to at least two locations.

At that level of investment, a reduction in the ongoing royalty is more meaningful than a launch promotion designed simply to make the franchise fee look cheaper. If a restaurant performs well, the saving continues as sales grow and leaves the franchisee with more money during the early years of building the business.

That money could help fund management, local marketing or development of the next restaurant. It also means Evergreens is sharing some of the financial burden while its earliest franchise partners help establish whether the model can succeed outside the company's existing estate.

A Cheap Royalty Does Not Make a Good Franchise

Prospective franchisees still need to judge the underlying business rather than become distracted by the incentive. A two-point royalty saving will not rescue a weak location, excessive labour costs or disappointing sales, and Evergreens still has to demonstrate that its performance in company-owned restaurants can be repeated by franchisees entering new markets.

Its advantage is that it has resisted franchising immediately after proving a single restaurant could work. Fourteen company-owned locations and more than a decade of trading give the company an operating history from which to build its franchise programme.

The next test is whether that experience can be transferred to people who were not there while the business was being built. Evergreens is effectively paying its first franchisees a little more to help answer that question.

What We Can Learn From This

Franchisors launching a network should consider whether their earliest franchisees are being compensated for taking risks that later recruits will avoid. A temporary royalty reduction can be more valuable than discounting an initial fee because the benefit continues while the franchisee is actually operating the business. Evergreens will still have to prove that its company-store experience translates into strong franchised locations, but its approach gives the first operators some financial recognition for helping establish that record. Other new franchisors should consider whether asking somebody to go first deserves a better deal.

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