Hoots
Hoots wings® offers chicken wings and casual dining in a fast food/fast casual format. Known for its wing-centric menu, it operates as a franchise with significant investment requirements. Part of the broader quick-service restaurant (QSR) industry.
Hoots franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary under the Development Agreement for one hoots wings® Restaurant ranges from $379,000 to $1,132,000. This includes a franchise fee of $30,000 per Franchised Business and additional costs such as equipment, furniture, fixtures, signage, supplies, and the Technology System [p.1, p.210, p.31].
What is the initial franchise fee?
The initial franchise fee is a non-refundable amount of $30,000 that must be paid upon execution of the Franchise Agreement. This fee is considered part of the franchisor's general operating funds and will be used at their discretion [p.88, p.378].
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. Additionally, franchisees may be required to pay national advertising fees, which range from 0.5% to 2.5% of the franchised locations' net revenue for domestic franchises, with international franchisee rates ranging from 0.0% to 1.0%, and most having no requirement to contribute. [p.346]
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement generally has a term of 20 years [p.346]. You may be able to renew the franchise agreement, but this depends on the terms specified in your particular agreement, as renewal rights are not guaranteed and can be subject to conditions such as meeting performance standards or paying renewal fees [p.346].
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, the transferee must agree to a sublease or transfer and assumption of the lease from the original franchisee and obtain the landlord's approval if applicable [p.121].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.378, p.177, p.225]. Additionally, the franchise agreement allows termination if you fail to comply with lawful provisions and do not cure such failure within a reasonable time frame, which cannot exceed 30 days [p.5(c)].
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 [p.56]. 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.56, p.58]. Additionally, the company has the right to establish Hooters® restaurants in areas outside your Protected Market Area [p.289], and you do not receive any exclusive or protected delivery area for engaging in delivery services [p.85].
What training and ongoing support does the franchisor provide?
The franchisor provides management training through an approved Management Training Program. This training must be completed within 90 days of an individual's appointment as Operating Principal or General Manager [p.97]. Additionally, the franchisor is responsible for ensuring that all services promised under the franchise agreements are performed in compliance with those agreements, even if delegated to HOA [p.10].
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 purchase one. However, they do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets, and they authorize no such representations by their employees or representatives [p.74].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling Products and Services only from the Franchised Business at the Site [p.105], and you may have to buy or lease items from the franchisor or a limited group of suppliers it designates [p.3]. This isn't specified in the excerpts regarding where supplies must be purchased, but typically they can be obtained through the franchisor or designated suppliers as mentioned on page 3.