Hot Head Burritos
Hot Head Burritos offers franchises for Mexican cuisine restaurants, specializing in burritos, tacos, and salsas. Known for casual dining with a variety of Mexican food options, it operates in the quick-service restaurant sector.
About Hot Head Burritos
Hot Head Burritos is a restaurant chain based in Dayton, Ohio. The restaurant specializes in Mexican-style burritos and other Mexican-style foods. Hot Head Burritos was ranked by AOL.com in 2009 as one of America's next big chains. In 2011, Hot Head Burritos was named 41st on FastCasual's list of 2011's Top 100 Movers and Shakers.
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Hot Head Burritos franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Hot Head Burritos® Restaurant ranges from $215,100 to $704,850. This includes an additional $500 for setting up your loyalty program account with Punchh, Inc., which is not refundable [p.11].
What is the initial franchise fee?
The Initial Franchise Fee for a Restaurant franchise is $26,000. However, there are discounts available: veterans who meet certain qualifications pay $19,500, and those purchasing an additional restaurant pay $16,500. [p.10, p.16, p.121]
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 6% of Net Sales for franchisees [p.46]. Additionally, you must spend a minimum amount on local advertising as determined by the franchisor, with any shortfall needing to be deposited into the Marketing Fund if not met [p.81]. This isn't specified in the excerpts for the exact amount of the advertising fee, but it is tied to spending requirements and potential deposits for non-compliance.
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot freely transfer or sell your franchise without good cause as determined by the franchisor. Good cause includes but is not limited to specific reasons identified by the franchisor [p.6(g)]. This means any sale or transfer would need approval from the franchisor [p.120].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if there is good cause, which includes the failure of the franchisee to comply with any lawful provisions of the franchise agreement and not curing such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so. [p.5]
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?
The exclusivity and protection of your territory depend on the location of your Hot Head Burrito® Restaurant. If it is located outside an Urban Area, you will receive a 2-mile radius Protected Territory, excluding any Captive Market Locations [p.30]. However, if your restaurant is in or near an Urban Area or within a Captive Market Location, there is no exclusive or protected territory provided [p.30, p.78].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program that can last up to 14 days, including instruction on restaurant operations, equipment usage, customer service, marketing, and cost control. This training takes place at their corporate center or another designated location [p.85]. Additionally, ongoing support includes software maintenance and updates for the POS system, with associated fees [p.27].
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?
Yes, the franchisor shares historical financial results based on information submitted by their franchisees or entities under common control. However, this information has not been audited or verified by an independent certified public accountant [p.37, p.48]. The franchisor also provides actual records of existing outlets if a prospective franchisee is purchasing an existing outlet [p.48].
What am I restricted to selling, and where must I buy supplies?
You are required to sell only the Products and services that the franchisor has approved [p.34]. You must purchase certain items from the franchisor or a limited group of suppliers designated by them, which may be more expensive than other options [p.3]. For specific details on what you can buy, refer to the Approved Suppliers List provided by the franchisor [p.20].