Updated February 10, 2019.
Detailed Estimates of Huddle House Franchise Costs Based on Item 7 (Estimated Initial Investment) of Huddle House’s 2018 Franchise Disclosure Document
1. Initial Franchise Fee: $25,000 to $35,000
2. Training Fee and Travel and Living Expenses While Training: $16,500 to $33,500
- You must pay Huddle House a training fee for initial training, which is currently $4,990.
- Additionally, you will be responsible for all expenses relating to you and your personnel attending training, such as travel, room, board, and wages.
3. Real Estate – Rent for First 3 Months: $13,500 to $24,000
- If you do not own a location for your Unit, you must purchase or lease a space. Typical New Development Units using Huddle House’s current format range in size from 2,750 to 3,100 square feet. Free-standing restaurants will require from 0.75 to 1.5 acres of land for the Restaurant and adequate parking facilities.
- The figures above are estimates to lease the location for the first three months of operation. You will need to lease the space in advance of your opening; however, you may attempt to negotiate an abatement from the landlord for periods before your opening date.
- Due to variations in the market conditions for commercial property from region to region, Huddle House is unable to provide an estimate of the cost of purchasing real estate for the franchise. If you decide to purchase the land, the cost and outlay needed to do so will be considerably higher.
4. Improvements: $160,000 to $723,000
- You will need to construct improvements of, or “build out,” the premises at which you will operate the Unit. The figures in the chart are for the build out of either a newly-constructed building or improvements to an existing premises.
- You may negotiate for a tenant improvement allowance from the landlord covering a portion of the costs of constructing the leasehold improvements. If you are able to obtain from the property owner or lessor a leasehold allowance, or a lease payment abatement, those allowances or benefits should reduce your overall out-of-pocket costs to acquire, build out, and lease space but such allowance is not included in Huddle House’s estimates.
- This estimate does not include the costs for site preparation and site improvements. Site preparation costs include improvements to the land necessary for Unit construction and operation as well as adjacent parking areas.
5. Equipment and Seating: $170,000 to $265,000
- You are responsible for paying any applicable state and local sales and other taxes, in addition to the actual cost of the equipment package.
6. Signs and Decor: $20,000 to $75,000
- The low figure is for a standard sign package. The high figure assumes that you will need a standard sign package for the building and a high-rise road sign (including, where applicable, a standard highway sign). Specific circumstances may cause costs to be different.
7. Site Plan/Engineering Drawings: $8,000 to $18,000
8. Travel Expenses for Opening Guide Meeting: $0 to $750
- Once Huddle House has accepted a location for your New Development Unit and before beginning your site design, you will travel to Huddle House’s support center for a 1-day meeting to review the New Restaurant Opening Guide and complete initial project timelines and checklists with Huddle House’s construction and design department and operations team.
- Huddle House does not charge a fee for this day, but you will be responsible for any travel or related costs that you incur, which are estimated between $0 and $750 (for flight and hotel) depending on travel distance to Huddle House’s support center.
9. Smallwares, Opening Inventory, and Uniforms: $41,000 to $54,000
10. POS System: $15,500 to $25,000
- Huddle House has implemented a point-of-sale system (the POS System) that you must purchase before opening your franchise according to Huddle House’s specifications and criteria.
- Huddle House is not currently a supplier of the POS System, but it may choose to become a supplier in the future (but is not required to do so).
- The estimated initial investment includes the estimated cost of purchasing all elements of the POS System, as currently configured, which requires the use of 3 POS terminals.
- You will incur certain costs and expenses to purchase revised or upgraded components or services, or replacement systems, when specified by Huddle House.
11. Help Desk and Maintenance (First 3 Months): $735 to $825
- There are ongoing fees for hardware and software maintenance and a “help desk.” Based on the current system, Huddle House estimates that the monthly fees for software maintenance service and a “help desk” will cost approximately $245 to $275 for a POS System.
- This expense covers monthly services for assistance in operating and maintaining the POS System.
- Huddle House is not currently a provider of “help desk” and maintenance services, but it may choose to become a supplier in the future (but is not required to do so).
- Huddle House is in the process of beta testing a new labor and food cost control system for its POS System. This software is a web-based subscription service and Huddle House intends to roll out this new software to all Units in 2018 to 2019.
- All Units will be required to implement this new software tool and, although it is difficult to estimate the exact cost of subscription to franchisees, Huddle House anticipates that it will cost you approximately $100 to $200 per month, per Unit, which includes the second level of support.
12. Computer-Related Security Services: $1,200 to $2,000
- The use of broadband communications requires security features and services (such as antivirus, anti-spam, firewall, and intrusion detection). Costs for these services and timing of payments will be as you determine with service providers, however, Huddle House estimates approximately $1,200 to $2,000 per year.
13. Grand Opening Promotion: $3,000 to $5,000
14. Miscellaneous Opening Costs: $4,000 to $6,000
- Includes business license fees, cash register money, first month’s insurance deposit and tax escrow deposit, and utility deposits. This does not include a security deposit that you will pay to Huddle House.
15. Security Deposit: $7,500 to $15,000
- You must also pay to Huddle House a security deposit. The amount may vary taking into account your credit history, and Huddle House may adjust the required amount from time to time. This deposit is payable before you begin construction of your Huddle House Restaurant.
16. Additional Funds – 3 Months: $15,000 to $25,000
- This estimates your initial start-up expenses, including payroll. These figures are estimates and are based on Huddle House’s experience with respect to franchised and company-owned Huddle House Restaurants. Huddle House cannot guarantee that you will not have additional start-up expenses.
17. Totals: $519,935 to $1,338,075
- The expenditures shown above are for one Huddle House Restaurant. If you are a developer, you will experience similar costs for each Huddle House Restaurant under your Market Development Agreement.