Hangry Joes
Hangry Joes offers fast-casual hot chicken sandwiches with various spice levels in a franchise opportunity. Known for its premium hot chicken, this fast-growing restaurant chain operates in the quick-service food industry.
Hangry Joes franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to begin operation of a Hangry Joe's Hot Chicken franchise ranges from $305,500 to $518,000, which includes a mandatory payment of $35,000 to the franchisor or affiliate. [p.1]
What is the initial franchise fee?
The initial franchise fee is a nonrefundable payment required upon execution of the franchise agreement. It covers the use of trademarks, the system and training provided by the company [p.10, p.65, p.162]. This fee also includes 50% for the use of marks and 50% for training, support, and the franchise system [p.103].
What are the ongoing royalty and advertising fees?
Ongoing royalty fees are calculated as a percentage of the franchisee's gross sales and are due on a weekly basis, with revenue recognized during the period earned [p.164]. Advertising fees, also based on gross sales, are collected into an advertising fund for marketing expenditures that benefit the franchise as a whole; however, these fees do not result in immediate revenue recognition due to their nature and intent [p.162].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement generally has a term of 10 years [p.165]. You may renew the agreement by signing a new franchise agreement if you are in compliance with the terms and conditions for renewal, which include exercising a general release of claims against the franchisor [p.64].
Can I sell or transfer my franchise, and what does that require?
Yes, you can transfer your franchise, but it requires approval from the franchisor. According to [p.5], the franchisor may refuse a transfer for good cause, which includes failing to meet qualifications, being a competitor, unwillingness to comply with obligations, or non-payment of sums due. A transfer fee is also required: $5,000 for full ownership and $2,500 for a minority interest transfer ([p.66]).
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on various grounds including immediate termination for insolvency, abandonment, material misrepresentation, legal violation persisting 10 days after notice, repeated breaches, judgment, criminal conviction, monies owed to the franchisor more than 5 days past due, and imminent danger to public health or safety. Additionally, the franchisor can terminate upon written notice and a 60-day opportunity to cure for any breach of the Franchise Agreement [p.41]. This isn't specified in the excerpts regarding termination by good cause [p.5(c)].
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a transferee, you must have adequate financial resources and capital to meet the performance obligations under the agreement [p.78]. This includes demonstrating sufficient net worth and liquid capital, though specific amounts are not detailed in these excerpts.
Do I get an exclusive or protected territory?
Yes, you receive an exclusive territory as specified in [p.26], meaning the franchisor promises not to establish either a company-owned or franchised outlet selling the same or similar goods or services under the same or similar trademarks or service marks within your designated geographic area.
What training and ongoing support does the franchisor provide?
The franchisor provides initial training at one of their designated outlets, which covers various topics as detailed in the Franchise Agreement (Section 5.1) [p.20]. Additionally, they offer ongoing support through a franchise agreement that includes the exclusive use of trademarks and the system, though this does not include financial guarantees or refunds if certain conditions are not met [p.165].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if you are purchasing one, but they do not make representations about future financial performance. The franchisor can also share performance data between employees and affiliates, as well as with franchisees and their employees, though this data must be kept confidential [p.73, p.4, p.28]. Financial performance information may be included in the disclosure document if there is a reasonable basis for it [p.33].
What am I restricted to selling, and where must I buy supplies?
You are not specifically restricted to selling any particular items, but you must purchase food and beverages, as well as furniture, fixtures, equipment, and smallwares, pursuant to the franchisor's specifications, which may include vendor designations [p.16]. Supplies and inventory must also be purchased according to the franchisor's specifications, which may involve designated vendors [p.17].