The Original Hot Chicken
The Original Hot Chicken offers franchises for hot chicken restaurants, known for their spicy southern-style dishes like tenders and sandwiches. Part of the quick-service restaurant industry, it provides options to open multiple locations with varying initial investments.
The Original Hot Chicken franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary for a commitment of 3 to 10 restaurants ranges from $50,500 to $132,000. However, this amount includes fees paid to the franchisor or its affiliates and does not include the cost of developing each restaurant. The estimated initial investment for the development of a single restaurant is not specified in these excerpts. [p.1]
What is the initial franchise fee?
The initial franchise fee is $25,000, which must be paid in a lump sum on the date that you sign the Franchise Agreement [p.15]. This fee is non-refundable once paid [p.24].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a weekly payment equal to six percent (6%) of your Gross Sales for the preceding week [p.78]. For advertising, you must spend an amount designated by the franchisor, currently 1% of your Gross Sales per month, which must be paid to conduct marketing for your Restaurant [p.36]. This can change periodically up to a maximum of 5% of Gross Sales [p.91].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in these excerpts. Additionally, while the FDD mentions provisions for not renewing a franchise without fairly compensating the franchisee [p.8], it does not specify the length of the initial agreement or the conditions for renewal.
Can I sell or transfer my franchise, and what does that require?
To sell or transfer your franchise, you must obtain a bona fide executed written offer from a responsible and fully disclosed buyer, including details of payment terms and financing. The offer must also include an earnest money deposit equal to 5% or more of the proposed sale price. You need to send these documents to TOHC Franchising LLC for approval [p.144]. Additionally, TOHC Franchising LLC can refuse to permit such a transfer except for good cause, which includes but is not limited to unspecified reasons [p.8].
On what grounds can the franchisor terminate the agreement?
According to [p.8], a franchisor can terminate a franchise prior to expiration only for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and curing such failure after being given written notice and a reasonable opportunity not exceeding 30 days. This isn't specified in the excerpts.
What financial requirements — net worth and liquid capital — do I need to qualify?
The franchisor bases the Development Rights grant in part on your representations regarding liquidity levels as of the Effective Date, requiring you to maintain sufficient liquidity throughout the Term to meet your obligations [p.138]. However, specific minimum financial requirements such as net worth or liquid capital are not detailed in these excerpts.
Do I get an exclusive or protected territory?
You will not receive an exclusive territory under the Franchise Agreement [p.43]. You may face competition from other franchisees and competitive brands. However, you are granted a 'Protected Territory' where we will not establish another traditional 'The Original Hot Chicken' branded Restaurant without your consent [p.43]. Additionally, there is no territorial protection for any Digital Brands [p.166, p.44].
What training and ongoing support does the franchisor provide?
The franchisor provides initial on-site advice, guidance, and operations support for 3 to 5 days before or after opening your first Restaurant at no cost [p.40]. Additionally, they may require Key Personnel to attend additional training courses, trade shows, and certification programs at times and locations designated by the franchisor, with fees potentially applied [p.41]. Ongoing support includes periodic meetings of franchise owners or managers as needed [p.41].
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 it is being sold, but generally does not make representations about a franchisee's future financial performance. The franchisor can provide financial performance information only if there is a reasonable basis for it and if the information is included in the disclosure document [p.57]. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management as well as relevant regulatory agencies [p.59].
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering and selling only the products and services specified by the franchisor. You may not offer or sell any products or services that have not been approved, through channels of distribution not approved, from locations not approved, or in a manner not in accordance with Brand Standards established by the franchisor [p.49]. Additionally, you must purchase certain Operating Assets only from suppliers designated or approved by the franchisor and must use products and services meeting their Brand Standards [p.27, p.87]. For opening supplies and inventory, some items like food, beverage, and packaging must be acquired from Ohio Valley Foods, with an estimated initial cost ranging from $12,750 to $17,000 [p.25].