Bad Ass Coffee
Bad Ass Coffee offers retail coffee shops with a Hawaiian theme, serving coffee, espresso, tea, food, and beans. Known for its bold branding and multiple-unit franchise requirement, it operates in the casual dining and coffee shop industry.
Bad Ass Coffee franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of one BAD ASS COFFEE OF HAWAII franchise is $134,400, which must be paid to the franchisor or its affiliates. This amount is specified on page [p.1] of the FDD excerpts provided.
What is the initial franchise fee?
The initial franchise fee varies based on the number of shops. For a single shop, it is $30,000 [p.11]. If you sign a Development Agreement for at least three shops, you must pay an initial development fee of $100,000, which includes the initial franchise fees for your first three Shops ($40,000 for the first Shop and $30,000 each for the second and third Shops) [p.11]. This isn't specified in the excerpts for scenarios other than a single shop or a minimum of three shops.
What are the ongoing royalty and advertising fees?
The franchisee pays a bi-monthly royalty equal to 5% of their "Net Sales" [p.72]. Additionally, there is an ongoing National Marketing Fund contribution, which was allocated as specified in the expenditures detailed on page [p.28] for the fiscal year ended December 31, 2024. This fund supports national advertising and marketing efforts, but no specific percentage or amount for individual franchisee contributions to this fund is provided in the excerpts.
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is not specified in the excerpts. However, according to [p.85], at the end of the initial term, the franchisee has the option to renew its franchise rights for an additional 10 years by acquiring successor franchise rights, provided certain conditions are met.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot transfer your franchise without the franchisor's permission. A 'transfer' includes any voluntary or involuntary assignment, sale, gift, merger, consolidation, exchange, or other disposition of any interest in the franchise agreement, ownership of the Franchisee (if applicable), or assets of the Shop [p.82]. This restriction applies even if the transfer results from a divorce, insolvency, corporate dissolution, or death of the Franchisee [p.82].
On what grounds can the franchisor terminate the agreement?
The franchisor reserves the right to terminate the National Marketing Fund upon 30 days' written notice [p.75]. Additionally, Virginia law restricts franchise cancellations to only those with reasonable cause, as defined by the Virginia Retail Franchising Act or Virginia laws [p.195]. This isn't specified in the excerpts for other grounds of termination.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
You are granted a protected territory around each individual shop location, but no exclusive territory. The protected territory will consist of a geographic area around your Franchised Location, typically defined as approximately one mile radius depending on local conditions [p.32]. This protected territory is subject to the franchisor's reservation of rights and may be adjusted based on market conditions [p.32].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program supervised by Susan Sauer, with a total duration of 6.5 days including both classroom instruction and on-the-job training [p.31, p.30]. This training is available to replacement or additional Principal Managers and Shop managers during the term of the agreement [p.68, p.26]. Ongoing support includes making the initial training program available for franchisees as needed, subject to space considerations and prior commitments [p.68, p.26].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 32 franchised BAD ASS COFFEE OF HAWAII Shops operating in the United States. The FDD does not specify any closures or terminations beyond mentioning that two Hawaii locations temporarily closed due to a fire but did not indicate their termination [p.44].
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet's performance if you are purchasing one. However, they do not make any financial performance representations beyond what is included in Item 19 of the FDD, and they do not authorize their employees or representatives to make such representations either orally or in writing [p.42].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only those products and services approved by the franchisor. This includes retail items such as branded packaged coffee, mugs, caps, T-shirts, or similar merchandise. You may not operate an online eCommerce store or website, fill wholesale orders for bulk coffee or coffee products, sell products or services off-premises, by mail order, through catalogs, or transship or reship products unless you have received prior written approval from the franchisor [p.36]. Additionally, you may have to buy or lease items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than similar items available elsewhere [p.3].