Harlem Shake
Harlem Shake offers fast-casual restaurants with smash-griddled burgers and milkshakes; known for its unique dining experience in the quick-service food industry.
Harlem Shake franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to begin operating a single Harlem Shake franchise ranges from $411,650 to $848,950. This includes a mandatory payment of $40,000 to the franchisor or an affiliate [p.1].
What is the initial franchise fee?
The initial franchise fee is forty thousand dollars ($40,000.00) [p.8]. This payment is fully earned by the company and is due in a lump sum when you sign the Franchise Agreement; it is not refundable under any circumstances [p.55, p.153].
What are the ongoing royalty and advertising fees?
The franchisee pays a royalty fee of 6% of gross revenues each week [p.56]. Additionally, the franchisee must spend at least 1% of their monthly gross revenue on local advertising, which can be increased to a maximum of 3% [p.74].
How long is the initial franchise agreement, and can I renew it?
The term length for the initial franchise agreement isn't specified in these excerpts. However, you have the right to enter into a new franchise agreement upon expiration of the term, subject to certain conditions, for an additional five years [p.55].
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires payment of a transfer fee equal to fifty percent (50%) of the then-current initial franchise fee. For transfers among existing principals, shareholders, or members without changing management control, the transfer fee is $3,500.00 [p.84]. If transferring to a spouse, parent, or child due to death or permanent disability, the fee is $2,500.00 [p.84].
On what grounds can the franchisor terminate the agreement?
The franchisor may terminate the agreement on any grounds available by law [p.169]. However, under Virginia law, it is unlawful for a franchisor to cancel a franchise without reasonable cause [p.172].
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 do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by Harlem Shake, and other channels or competitive brands controlled by them [p.32]. However, your protected area for catering/delivery services will be the same as your Territory, though Harlem Shake reserves the right to modify this area during the term of the agreement [p.31].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for the franchisee and their general manager, which must be completed at least two weeks before opening [p.28]. Additionally, upon reasonable request or as deemed appropriate by the franchisor, the franchisor will provide on-site remedial training and assistance during the term of the agreement [p.59]. This support is contingent on the availability of personnel and requires payment for any additional services beyond initial training [p.59].
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 financial performance information for its outlets, but only under specific conditions [p.46][p.43]. This information can be based on actual records of existing outlets you are considering purchasing, and it must have a reasonable basis [p.43]. Otherwise, the franchisor does not make any representations about future or past financial performance [p.46].
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering and selling all products and services that are part of the System, including any additions made by the franchisor in the future. You may only offer products and services that have been previously approved by the franchisor [p.35]. Additionally, you must purchase all equipment, fixtures, inventory, supplies, and services from the designated suppliers or according to specifications outlined in the operations manual [p.20].