In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Pokéworks franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Pokéworks franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Pokéworks franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Pokéworks outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of Pokéworks’ financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average gross sales for the 2 franchised Pokéworks Restaurants that had been open and operating for a minimum of 12 months as of December 31, 2017 and had been operated continuously during the period between January 1, 2017 and December 31, 2017

• 2017 average gross sales for the 4 company-owned Pokéworks Restaurants that had been open and operating for a minimum of 12 months as of December 31, 2017 and had been operated continuously during the period between January 1, 2017 and December 31, 2017

• 2017 average gross sales, food cost, supplies and materials, labor cost, gross rent, other costs, royalties and ad fund, net profit, median gross sales, high gross sales, and low gross sales for the 6 Pokéworks Restaurants (4 franchised and 2 company-owned) that had been open and operating for a minimum of 12 months as of December 31, 2017 and had been operated continuously during the period between January 1, 2017 and December 31, 2017

Section I – Background Information

17 Things You Need to Know About the Pokéworks Franchise

Expects to Open 100+ Locations by 2020

1.  At the end of March 2018, Pokéworks issued a press release stating that the brand plans to open more than 100 new franchise locations in markets across the United States over the next two years. The brand is building on momentum largely fueled by Pokéworks’ millennial relevance, as its chef-driven menu allows for complete customization catering to any dietary restriction or preference.

2.  With popular locations thriving in Manhattan, Boston, Houston, and Chicago, Pokéworks will further expand its brand presence with recently signed multi-unit franchise deals bringing the brand to San Francisco, Phoenix, Miami, Philadelphia, Atlanta, Austin, and other major cities.

3.  Kevin Hsu, co-founder of Pokéworks, said, “Our commitment to providing a healthier alternative to traditional fast food, coupled with the ability to meet demands for a reduced carbon footprint and naturally sustainable food, places us in a prime position for future growth. As our brand continues to develop, we are dedicated to seeking passionate franchise partners to elevate the Pokéworks concept, while providing customers with a fresh take on Hawaiian-inspired poké.”

Partners With Toridoll Holdings for Global Growth

4.  In early August 2018, Pokéworks announced an agreement with Toridoll Holdings Corp., a $1.6 billion Japanese company that operates more than 1,500 restaurant locations (1,028 in Japan and 533 overseas). The partnership will fuel Pokéworks’ international expansion and comes at a time when the company is growing in the United States. At the time of the announcement, Pokéworks had nearly 20 locations open with more than 120 in development.

5.  Michael Wu, CEO of Pokéworks, said, “Pokéworks was founded on the idea of bringing high-quality and affordable seafood to the masses and this agreement will no doubt enable us to achieve our long-term vision for the brand and the concept. We cannot think of a more sophisticated establishment to partner and further align our values with as we continue to grow.”

6.  For its part, Toridoll plans to support the rapid expansion of Pokéworks by leveraging its expertise in investing and operations within its global network. “In this emerging market, Pokéworks has become a great success by appealing to the demand for fresh, fast, and healthy food at affordable prices,” said Takaya Awata, president of Toridoll Holdings. “We are excited to work in tandem with one of the largest and fastest growing poke brands in the United States.”

Signs First International Master Franchise Agreement in Mexico

7.  In mid-September 2018, Pokéworks announced its inaugural expansion abroad through the signing of a Master Franchise Agreement for Mexico. To further fuel its robust growth plans to reach more than 400 units, initial Pokéworks locations are targeted for emerging Mexico cities such as San Luis Potosi, with additional locations aimed toward primary cities including Monterrey, Ciudad de Mexico, Guadalajara, and the Bajio region of West North-Central Mexico.

8.  Michael Wu, CEO of Pokéworks, said, “Recognized as one the most promising and emerging countries in the world, development in Mexico provides us with the opportunity to introduce the Pokéworks concept to an untapped market ideal for expansion. As Mexico continues to promote the importance of a healthy diet and exercise to its residents, we are confident Pokéworks will bring access to fresh, healthy alternatives to traditional fast-food options.”

9.  The Mexico development will be led by newly-formed restaurant investment group OPERADORA RAU of Credian, a prominent global financial institution. With broad business expertise that includes decades of combined experience in restaurant consulting, the group also oversees the daily operations of multiple brands including several Wingstop, Circus Park, and Berlitz Language franchises, among other businesses.

10.  Recognizing the unmatched potential of the Pokéworks brand, OPERADORA RAU was inspired to join forces with the franchise as the company strongly believes in the healthy fast-casual concept’s relevance to the local Mexican culture. Perfectly positioned in the rapidly-growing millennial generation dining segment – focused on nutritional and multicultural interests – the group plans to leverage their substantial restaurant industry and market knowledge to grow the Pokéworks brand throughout the country.

11.  Antonio Musa Celis, CEO and director general of OPERADORA RAU, said, “It is no secret that Pokéworks has witnessed impressive success by appealing to the demand for healthy, fast and affordable food options. We are excited to combine our group’s broad perspective and diversified skills with Pokéworks’ already multifaceted leadership team to cultivate a development strategy focused on quality and authenticity in Mexico.”

Company History

12.  Pokéworks was founded in 2015 by Kevin Hsu, his brother Kasper, and his college friends Peter Yang and Michael Wu. They all had similar upbringings with parents migrating from China and Taiwan in search of the American dream. As young adults, all of Pokéworks’ founders worked in Chinese, Japanese, and Thai restaurants.

13.  Before starting Pokéworks, Wu and Yang brought a Fortune 500 China brand into the U.S. and established a national footprint of 20+ stores from the east to west coast over 10 years.

14.  The friends all got the idea for Pokéworks while they were on a trip in Hawaii and ate the local dish multiple times a day. They began to incorporate household snacks for added flavor and texture, which was how the brand’s “Poke Your Way” motto was born.

15.  The first Pokéworks opened in December 2015 in Midtown Manhattan and was an instant hit. Within a few weeks, hundreds of customers started lining up for 45 minutes or more just to experience poke for the first time and build their own poke bowl or burrito. Videos of the crowds and Pokéworks’ sushi burrito went viral, which quickly generated buzz for the brand.

16.  Pokéworks started franchising in 2016 and continues to grow across the United States today.

Entrepreneur’s Franchise 500

17.  As a newer franchise, Pokéworks has not yet appeared on Entrepreneur’s Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Pokéworks franchise costs, based on Item 7 of the company’s 2018 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Pokéworks’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2016

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  2
• Net Change:  +2

2017

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  7
• Net Change:  +5

Company-Owned

2015

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  1
• Net Change:  +1

2016

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  5
• Net Change:  +4

2017

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  12
• Net Change:  +7

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

• As of December 31, 2017, Pokéworks had a total of 11 company-owned Pokéworks Restaurants, each operated by one of its Affiliates.

• Of that total number, 4 company-owned Pokéworks Restaurants met both of the following criteria (“Company-Operated Reporting Criteria”): the Pokéworks Restaurant had been open and operating for a minimum of 12 months as of December 31, 2017 and had been operated continuously during the period between January 1, 2017 and December 31, 2017.

• The company-owned Pokéworks Restaurants that met the Company-Operated Reporting Criteria are located in New York, New York; Seattle, Washington; Mountain View, California; and Irvine, California. The remaining Affiliate-owned Pokéworks Restaurants did not satisfy one or both of the Company-Operated Reporting Criteria.

• Two franchised Pokéworks Restaurants are included in this presentation.

• Sales will vary from Restaurant to Restaurant. In particular, the sales and expenses of your Pokéworks Restaurant will be directly affected by factors which include the Pokéworks Restaurant’s geographic location; competition in the market; the quality of both management and service at the Pokéworks Restaurant; contractual relationships with lessors and vendors; the extent to which you finance the operation of your Pokéworks Restaurant; your legal, accounting, and other professional fees; federal, state, and local income taxes, gross profits taxes, or other taxes; cost of any automobile used in the business; and other discretionary expenditures.

• The locations of these Restaurants are in densely-populated, affluent urban and suburban areas that may not be similar to the market in which your Restaurant will be located.

Financial Performance of All Pokéworks Company-Owned and Franchised Restaurants Open During the Full 12-Month Period From January 1, 2017 Through December 31, 2017

Number of Restaurants:  6