In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Hurricane Grill & Wings franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Hurricane Grill & Wings franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Hurricane Grill & Wings franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Hurricane Grill & Wings’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average annual adjusted gross sales for the 31 Hurricane Grill & Wings Restaurants with 150 or more seats that were in operation for at least 52 weeks as of December 25, 2016
- 2016 average annual adjusted gross sales for the 29 Hurricane Grill & Wings Restaurants with less than 150 seats that were in operation for at least 52 weeks as of December 25, 2016
Section I – Background Information
14 Things You Need to Know About the Hurricane Grill & Wings Franchise
Acquired by FAT Brands
1. In mid-November, FAT (Fresh. Authentic. Tasty.) Brands, Inc. announced that it had acquired Hurricane Grill & Wings for $12.5 million. FAT Brands plans to leverage Hurricane’s signature tropical, laid-back American atmosphere to complement its existing portfolio brands, Buffalo’s Cafe and Buffalo’s Express.
2. Andy Wiederhorn, president and CEO of FAT Brands, said, “Hurricane Grill & Wings possesses an ambiance that appeals to a broad consumer-base, and we are thrilled to have identified this concept which shares our passion for providing guests with an all-American experience through high-quality, made-to-order meals.”
3. Wiederhorn added, “We see Hurricane as a wonderful complement to our Buffalo’s Cafe and Buffalo’s Express brands, and look forward to expanding the brand’s footprint in both new and existing markets through our extensive franchisee network. Their new fast casual brand Hurricane BTW (Burgers Tacos Wings) has a significant franchise development pipeline and will nicely diversify the company into more fast casual venues.”
Announces Plans to Open 49 Spinoff Concept Locations
4. In early March, Hurricane Grill & Wings announced plans to open at least 49 locations of Hurricane BTW, its newest fast casual restaurant concept, over the next 42 months. The first Hurricane BTW prototype location was opened in April in Skokie, Illinois. At the time of the announcement, Hurricane Grill & Wings said that about 8 to 10 Hurricane BTW restaurants would be opened by the end of 2017.
5. Brooksy Smith, chief brand officer for Hurricane AMT (Hurricane Grill & Wings, Hurricane BTW, and Hurricane Dockside) as well as president of Hurricane BTW, will be in charge of leading Hurricane BTW’s growth and expansion.
6. Smith said, “Fast casual is the way we will serve our food at Hurricane BTW, but with a broader menu and better value for our customers. At BTW, we are focusing on the three most popular single entrée items other than pizza and including them on our menu, and we are pricing our average ticket at $10. We feel that now is the right time for a broad menu with a value proposition in a casual market. And that’s why we are confident BTW will excel.”
7. A Hurricane BTW lab store was opened in April 2016 in Fort Lauderdale, Florida. The new locations will feature food, service, and design elements from the brand’s lab location, such as:
- Approximately 2,000 square feet;
- Sophisticated and high-design aesthetic in-store with inexpensive yet durable finishes;
- New and improved burger, taco, chicken wing and tender recipes;
- Ice cream shakes with mix-ins;
- Expanded sauce bar;
- Pepsi Spire digital fountain; and
- The Crowler, a 32 oz. sealable can meant for draft beer (in those locations where permitted)
April Fools’ Day Prank Raises Autism Awareness
8. On April Fools’ Day 2017, Hurricane Grill & Wings released a bright blue colored chicken wing sauce called “Blazin’ Blue Raz,” which drew viral attention (over 3 million people engaged with the campaign). The following day, the brand’s leadership announced that the real intention behind the prank sauce was to bring attention to and raise money for Autism Awareness Month, which uses blue as its campaign color.
9. The brand also said that for every single wing sold at each of its locations throughout the month of April, Hurricane Grill & Wings would make a donation to Els for Autism. In the announcement, the company estimated that it would be able to raise more than $15,000 for the organization, which was established in 2009 by Liezl and Ernie Els, parents of Ben, who has autism spectrum disorder (ASD).
10. Brooksy Smith, chief brand officer for Hurricane AMT (Hurricane Grill & Wings, Hurricane BTW, and Hurricane Dockside), said, “There are a few Hurricane Grill & Wings and Hurricane BTW franchise owners who have children affected by autism spectrum disorder and we are committed to supporting them. Our April Fools’ Day campaign promoting Blazin’ Blue Raz sauce truly knocked it out of the park and we’re hoping our guests and fans will continue the momentum by stopping in during the month of April for an order of chicken wings.”
11. Hurricane Grill & Wings was founded in 1995 by Chris Russo in Ft. Pierce, Florida. The restaurant is known for its Jumbo Chicken Wings. It also features an island-themed menu which currently includes more than 35 sauces and rubs, Garlic ‘N Parm Fries, seafood entrees, salads, and fresh Certified Angus Beef SteakBurgers.
12. Over the next decade, Russo continued to open locations around the country. He started franchising in 2006. By 2008, there were 30 Hurricane Grill & Wings locations in Florida, Georgia, and Nevada. That same year, the franchisor was purchased by Hurricane AMT, LLC which is controlled by investor partners Gail Meyer Asarch and John C. Metz (chairman and CEO).
13. Most recently, in late 2017, Hurricane Grill & Wings was acquired by FAT (Fresh. Authentic. Tasty.) Brands, Inc. for $12.5 million. Today, there are over 60 Hurricane Grill & Wings restaurants across the U.S.
Entrepreneur’s Franchise 500
14. Hurricane Grill & Wings has yet to rank on Entrepreneur’s annual Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Hurricane Grill & Wings franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Hurricane Grill & Wings’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
- Hurricane Grill & Wings’ original Restaurants were built with less than 150 seats. Since 2009, Hurricane Grill & Wings has been opening an increasing number of Restaurants with 150 seats or more.
- Below are two different sets of historical adjusted gross sales data, one for those Hurricane Grill & Wings Restaurants with 150 seats or more and those Restaurants with less than 150 seats.
Part 1 – Historical Adjusted Gross Sales Data for Selected Franchised Hurricane Grill & Wings Restaurants With 150 or More Seats
- Presented below are certain adjusted gross sales data for the 2016 Fiscal Year for 31 Hurricane Grill & Wings Restaurants that were in operation for at least 52 weeks as of December 25, 2016.
- “Adjusted Gross Sales” represents the actual adjusted gross sales for each Restaurant in the sample for the period December 28, 2015 to December 25, 2016 (“2016 Fiscal Year”), as reported by the franchisees or operators.
- The Adjusted Gross Sales include revenue for food and beverages at all day-parts, as well as all other products, merchandise, and food items, for on-premises, take-out, and catering for the 2016 Fiscal Year.
- “Average Annual Adjusted Gross Sales” is the total Adjusted Gross Sales for the 31 Restaurants in the sample, divided by 31.
- “Median Annual Adjusted Gross Sales” is the Adjusted Gross Sales figure for one Restaurant in the middle of the 31 Restaurants in the sample. In cases where there is no single unique Restaurant in the middle, the median amount is equal to the average of the two Restaurants in the middle of the range.
- The data in Part 1 is for Restaurants that were in operation for at least 12 full months. To avoid any skewing of data due to seasonality, revenues that may be generated from grand opening advertising or promotion, or effects (positive or negative) from start-up operations, the sample includes only Restaurants that were operating during all of the applicable 12-month period.
- At the end of the 2016 Fiscal Year, there were 35 Restaurants with 150 or more seats. Accordingly, Part 1 does not include the 4 Restaurants with 150 or more seats that opened during 2016. Of the 31 Restaurants included in the chart, 4 are company-owned and the remaining 27 are franchised.
- The size of the Restaurants in the sample range from approximately 150 seats to approximately 308 seats.
- All of the Restaurants have an interior bar with seating, and many of the Restaurants have an exterior area or patio with some seating. For purposes of these disclosures, only interior seating has been considered.
- The age of the Restaurants, or the length of time of operations as a Hurricane Grill & Wings Restaurant, range from 1 year to 10 years. All of the Restaurants serve the full range of food and beverage menu items, including alcoholic beverages, and all of the Restaurants were regularly open during the recommended hours, which include lunch, dinner, and late evening.
- The size of the Restaurants, the menu offerings, and the hours of operation are similar to the franchise that is being offered.
12-Month Adjusted Gross Sales for the 52-Week Period Ended December 25, 2016