Hooters
Hooters operates casual bar and grill/sports bars featuring chicken wings, burgers, seafood, and 'Hooters Girls' who entertain guests. Known for its unique concept blending dining with entertainment, Hooters is in the restaurant and hospitality industry.
About Hooters
Hooters is the registered trademark used by an international restaurant chain Hooters, Inc., based in Clearwater, Florida and its associated franchise group Hoot Owl Restaurants LLC. The Hooters name is a double entendre referring to both an American slang term for women's breasts and the logo.
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Hooters franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a new construction Hooters Restaurant ranges from $2,748,300 to $4,100,000. For a converted restaurant, it ranges from $1,258,300 to $2,820,000. These amounts include $90,000 to $98,000 that must be paid to the franchisor or affiliate for initial franchise fees. [p.1]
What is the initial franchise fee?
The initial franchise fee is $75,000 and it is a fully earned non-refundable amount due upon execution of the Franchise Agreement [p.101]. This fee applies for opening one restaurant; if you plan to develop more than one restaurant, you would prepay 100% of the initial franchise fee for the first restaurant and 50% for each additional one [p.1].
What are the ongoing royalty and advertising fees?
Ongoing royalty fees typically range from 2.0% to 6.0% of the franchised locations' monthly net sales. National advertising fees for domestic franchisees range from 0.5% to 2.5% of the franchised locations' net revenue, while international franchisees generally have no requirement to contribute. These fees are recognized on an accrual basis as related franchisee revenues are reported by the Company. [p.349, p.350]
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement generally has a 20-year term [p.349]. Renewal of an expiring franchise contract incurs fees which are recognized over the remaining term of the franchise agreement [p.349], indicating that renewal is possible but subject to fee payment and adherence to the terms outlined in the agreement.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot freely sell or transfer your franchise without good cause as specified by the franchisor [p.5]. However, a transferee must agree to assume the lease for the site from the original franchisee and obtain the landlord's approval if applicable [p.136].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on grounds such as the failure of the franchisee to comply with any lawful provision of the franchise agreement and failing to cure such failure after being given written notice and a reasonable opportunity, which cannot exceed 30 days [p.5]. Additionally, termination is permitted on any grounds available by law [p.382].
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?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by the company, or other channels of distribution or competitive brands controlled by the company [p.58, p.60]. Additionally, your Protected Market Area is determined in the company's sole discretion and can vary based on location and traffic considerations; it is not uniform among franchisees and does not guarantee a minimum number of people within the area [p.280, p.59].
What training and ongoing support does the franchisor provide?
The franchisor provides management training through an approved program that must be completed within 90 days of an individual's appointment. This training can be conducted online or at specified locations, including the corporate headquarters or other authorized sites. Additionally, the franchisor is responsible for providing support and services to franchisees as outlined in various agreements, though much of this may be delegated to HOA Systems [p.11]. Travel, living costs, and related expenses for attendees are the responsibility of the franchisee [p.110].
How many franchised outlets are there, and how many have closed or been terminated?
As of the end of Fiscal Year 2022, there were 102 franchised Hooters Restaurants. The provided excerpts do not specify the number of closed or terminated outlets. This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information if it is based on actual records of an existing outlet you are considering buying, or if they supplement the information provided in Item 19. However, other than this, the franchisor does not make any financial performance representations and does not authorize its employees or representatives to do so either orally or in writing [p.81].
What am I restricted to selling, and where must I buy supplies?
You are restricted from engaging in wholesale sales, reselling, or distributing Products and Services through third parties, satellite locations, the Internet, or other electronic or print media [p.119]. You may have to buy or lease certain items from the franchisor or a limited group of suppliers it designates, which might be more expensive than alternatives [p.3].