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

• Section I – Estimated initial investment (franchise costs) for a Hungry Howie’s franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for a Hungry Howie’s franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned Hungry Howie’s outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

• Section IV – Background information on the Hungry Howie’s franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of Hungry Howie’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2021 average, median, high, and low gross sales for the 282 franchised units, 33 affiliated units (broadcast), 148 franchised units (broadcast), 134 franchised units (non-broadcast), and all 315 Hungry Howie’s units that had been open for the entire 2021 fiscal year (separately stated)

• 2020 and 2021 number of franchised and affiliated Hungry Howie’s units with gross sales over $1,000,000

• 2021 average gross sales, food cost, paper cost, and labor cost for the 250 franchised units, 33 affiliated units, and all 283 Hungry Howie’s units that were open and reporting sales to Hungry Howie’s for the entire 2021 fiscal year (separately stated)

• Section VI – Key ratios, comparables, computations, and analyses for the Hungry Howie’s franchise opportunity (exclusive content for Platinum subscribers)

Section I – Hungry Howie’s Franchise Costs

• Hungry Howie’s franchise costs, based on Item 7 of the company’s 2022 FDD:

• Franchise Fee:  $12,500 to $25,000
• Franchise Grand Opening Fee:  $15,000
• Real Estate:  $1,750 to $4,000 per month
• Security Deposits:  $1,750 to $2,850
• Leasehold Improvements:  $137,558 to $232,691
• Architectural Drawings and Local Plan Review Fees:  $7,500 to $10,400
• Equipment and Fixtures:  $118,930 to $171,103
• Point-of-Sale System – Hardware Subscription:  $3,579 to $3,678
• Point-of-Sale System – Software-as-a-Service Subscription:  $444 to $567
• Opening Inventory:  $7,000 to $17,541
• Insurance:  $561 to $3,358
• Security Deposits – Utilities:  $0 to $2,000
• Exterior Signage:  $7,681 to $20,743
• Digital Displays:  $2,400 to $5,600
• Travel and Living Expenses During Training:  $2,447 to $5,733
• Additional Funds – 3 Months:  $1,200 to $20,000
• Total Estimated Hungry Howie’s Franchise Costs:  $319,100 to $520,264

Section II – Hungry Howie’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Hungry Howie’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Franchise Fee:  $12,500 to $25,000
• Royalty Fee:  5.5% of Gross Sales but not less than $360 per week
• Marketing Fee:  7% of Gross Sales but not less than $721 per week

Section III – Number of Franchised and Company-Owned Hungry Howie’s Outlets

Franchised

2019

• Outlets at the Start of the Year:  518
• Outlets at the End of the Year:  504
• Net Change:  -14

2020

• Outlets at the Start of the Year:  504
• Outlets at the End of the Year:  499
• Net Change:  -5

2021

• Outlets at the Start of the Year:  499
• Outlets at the End of the Year:  501
• Net Change:  +2

Company-Owned

2019

• Outlets at the Start of the Year:  32
• Outlets at the End of the Year:  33
• Net Change:  +1

2020

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  32
• Net Change:  -1

2021

• Outlets at the Start of the Year:  32
• Outlets at the End of the Year:  33
• Net Change:  +1

Section IV – Background Information on the Hungry Howie’s Franchise

17 Things You Need to Know About the Hungry Howie’s Franchise

Appoints New Director of Franchise Development

1.  At the end of November 2021, Hungry Howie’s announced the appointment of Steve Clough as the brand’s new director of franchise development. He is a graduate of Western Michigan University and brings a diversified career with more than two decades of leadership experience to Hungry Howie’s. Clough has an extensive background in print marketing, sales management, new business development, and franchise development. Specializing in fostering relationships with multi-unit franchisees, Clough will lead Hungry Howie’s franchise growth initiatives.

2.  Clough spent most of his career working multiple director positions at Domino’s Pizza, starting in print marketing, POS systems sales for franchisees, and directed the national school lunch program. He then became the director of franchise development and recruiting and that propelled Domino’s to significant growth. Domino’s goal was to open more than 1,000 stores over 8 years across the United States and Clough developed and implemented a comprehensive development strategy that significantly contributed to the domestic store growth count.

3.  In his new role at Hungry Howie’s, Clough will be responsible for overseeing growth strategies that will drive the brand’s aggressive growth in key markets. His duties will entail actively recruiting franchisees while working alongside franchise partners in development, construction, and real estate site selection.

4.  Steve Jackson, president and CEO of Hungry Howie’s, said, “Clough is a valuable addition at Hungry Howie’s and will play a critical role in leading our brand’s continued growth. He has a strong track record for successfully leading dynamic teams that drive company growth and delivering exceptional results. His knowledge and experience from one of our largest and most respected pizza competitors will enable us to take advantage of growth and partnership opportunities as we continue to scale nationwide.”

5.  Clough said, “I’m a huge fan of Hungry Howie’s and honored to be joining such a phenomenal brand. Developing business solutions and working with franchisees to build their business has been one of the most rewarding parts of my career, and I’m excited to bring my expertise to the company. Hungry Howie’s might be the best kept secret in pizza, and we have a huge upside for growth. I look forward to building the next generation of Hungry Howie’s franchisees and developing successful stores.”

Launches New Incentive Programs for New Franchisees

6.  At the end of January 2022, Hungry Howie’s announced the roll out of its new franchise incentive program to promote accelerated unit growth in 2022. Offering bold incentives for a limited time, Hungry Howie’s new aggressive development strategy is designed for multi-unit operators who are looking for a slice of the dynamic quick-service pizza sector.

7.  Since its humble beginnings in 1973 as a hamburger stand turned takeout and delivery pizzeria in the Detroit suburb of Taylor, Hungry Howie’s has become a top pizza franchise. With more than 535 stores in 21 states, the pizza brand aims to expand its national footprint by signing at least 10 more franchisees and grow by 10% in 2022.

8.  For those interested in expanding their portfolio with a leading brand in the $46 billion pizza industry, Hungry Howie’s is offering investors up to $150,000 in free royalties for three or more locations as part of its brand-new Strategic Growth Partner franchise incentive program.

9.  According to Steve Clough, director of franchise development for Hungry Howie’s, “There is a tremendous franchise growth opportunity for Hungry Howie’s and there is no better time to join. This is the first time in the brand’s history that we have introduced a program this aggressive. The Michigan-based pizza brand has continuously been recognized as one of the nation’s top pizza chains, and with record-breaking sales numbers, a strong customer base, and proven success in our business model, Hungry Howie’s is primed for national multi-unit growth expansion. We’ll be looking to partner with multi-unit operators who have a passion for the brand, strong business acumen, and proven restaurant industry experience.”

Launches Flatbread Pizzas

10.  At the beginning of January 2022, Hungry Howie’s announced the addition of oven-baked Flatbread Pizzas to its menu. Adding a new category of crust innovation to its menu, the Flatbread Pizzas are available in four crave-worthy varieties: Buffalo Chicken, Asian Chicken, BBQ Chicken, and Chicken Bacon Ranch. Customers also have the ability to create their own customized flatbreads. The Flatbread Pizzas are available for a limited time at participating Hungry Howie’s locations nationwide.

11.  Customers can curate the Flatbread Pizza of their dreams starting at just $7.00 or can enjoy Hungry Howie’s signature chicken flatbread varieties for $8.99. Hungry Howie’s Flatbread Pizzas are made with fresh dough that is made in-house daily, and topped with high-quality ingredients, including 100% real mozzarella cheese, vegetables, proteins, and more. A 2-topping Flatbread Pizza will also be available via Hungry Howie’s signature “Mix & Match” deal, which allows customers to select any 2 applicable items for just $6.99 each. Customers can place their order in-restaurant, online, or via the Hungry Howie’s mobile app.

12.  Jeff Rinke, vice president of research and development for Hungry Howie’s, said, “We are ecstatic to introduce our new Flatbread Pizzas. As the originator of Flavored Crust pizza, we wanted to provide our fans with a lighter crust option that still packs the bold and delicious flavors we are known for. Hungry Howie’s has long listened to what our fans want, and our latest menu innovation is indicative of this.”

Company History

13.  Hungry Howie’s was founded in 1973 by James Hearn in Taylor, Michigan. Hearn converted a 1,000 square foot hamburger shop into a successful carry-out and delivery pizzeria. Not long after, Hearn hired a delivery driver named Steve Jackson, who would later become CEO of Hungry Howie’s. Hungry Howie’s was an immediate hit with the local teens and the restaurant became a popular hangout spot.

14.  As business continued, Hearn and Jackson grew closer and Hearn made Jackson his business partner. In 1982, Hearn and Jackson decided they wanted to franchise Hungry Howie’s and the first franchised location was awarded the following year. Three years later, Hungry Howie’s had grown to more than 65 locations.

15.  Around that time, Hungry Howie’s developed what is now its signature flavored crusts. The idea was developed by a franchisee who put sesame seeds and butter on their crusts. After some research and development, Hungry Howie’s rolled out eight crust flavors in 1985.

16.  Hungry Howie’s continued to grow around the U.S. over the next few decades. By 2005, the chain had grown to 500 locations. Today, there are Hungry Howie’s locations across more than 22 states.

Entrepreneur’s Franchise 500

17.  Hungry Howie’s ranked No. 227 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Hungry Howie’s Franchise (Item 19, 2022 FDD)

• The financial performance representations below are based on the historical performance of a subset of existing Hungry Howie’s Units.

• Units located in the State of Florida are excluded from the information and calculations provided in this Item 19 because such units are owned by franchisees of H.H. Pizza, Inc., which operates under a license agreement with Hungry Howie’s. Subject to its license agreement, H.H. Pizza, Inc. may deviate from the Hungry Howie’s system in certain respects, including its selection of menu items, standards and specifications, and marketing strategies.

Part 1 – Average and Median Gross Sales of Certain Hungry Howie’s Units for the 52 Weeks Ended December 26, 2021

• The information shown in Part 1 was derived from Gross Sales for Hungry Howie’s 2021 fiscal year (December 28, 2020 through December 26, 2021).

• The total number of Hungry Howie’s Units as of December 26, 2021 was 534, which includes Franchised Units, Affiliated Units, “legacy units” (which are excluded from this information), and the 203 Florida units (which are excluded from this information as described under “Florida Units” above).

• The information was obtained from POS systems at each individual Unit.

• Gross Sales were only used if the Hungry Howie’s Unit had been open for the entire 2021 fiscal year.

All Units

• Number of Units:  315
• Average Annual Gross Sales:  $860,233
• Number and Percentage of Units Which Attained or Surpassed the Average:  145/43.94%
• Median Annual Gross Sales:  $835,503
• Highest Annual Gross Sales:  $2,535,001
• Lowest Annual Gross Sales:  $273,275

Franchised Units

• Number of Units:  282
• Average Annual Gross Sales:  $844,651
• Number and Percentage of Units Which Attained or Surpassed the Average:  123/43.62%
• Median Annual Gross Sales:  $806,899
• Highest Annual Gross Sales:  $2,535,001
• Lowest Annual Gross Sales:  $273,275

Affiliated Units (Broadcast Markets)

• Number of Units:  33
• Average Annual Gross Sales:  $993,387
• Number and Percentage of Units Which Attained or Surpassed the Average:  14/42.42%
• Median Annual Gross Sales:  $944,141
• Highest Annual Gross Sales:  $1,583,280
• Lowest Annual Gross Sales:  $538,348

Franchised Units (Broadcast Markets)

• Number of Units:  148
• Average Annual Gross Sales:  $959,593
• Number and Percentage of Units Which Attained or Surpassed the Average:  66/44.59%
• Median Annual Gross Sales:  $922,748
• Highest Annual Gross Sales:  $1,679,429
• Lowest Annual Gross Sales:  $321,271

Franchised Units (N0n-Broadcast Markets)

• Number of Units:  134
• Average Annual Gross Sales:  $717,701
• Number and Percentage of Units Which Attained or Surpassed the Average:  31/23.13%
• Median Annual Gross Sales:  $652,498
• Highest Annual Gross Sales:  $2,535,001
• Lowest Annual Gross Sales:  $273,275

• “Franchised Units (Broadcast)” means all Hungry Howie’s Units that were (1) open and reporting sales to Hungry Howie’s for the entire fiscal year and (2) located in a broadcast-feasible market. A “broadcast-feasible market” is one in which traditional broadcast media, such as radio and television, are affordable and efficient advertising options for the Units in such market.

• “Franchised Units (Non-Broadcast)” means all Hungry Howie’s Units that were (1) open and reporting sales to Hungry Howie’s for the entire fiscal year and (2) located in a non-broadcast-feasible market.

Part 2 – Number of Hungry Howie’s Units with Gross Sales Over $1,000,000 by Year

• The following chart provides information regarding the number of Franchised Units and Affiliated Units with Gross Sales over $1,000,000, by year for the entire 52-week period from December 30, 2019 through December 27, 2020 and the entire 52-week period from December 28, 2020 through December 26, 2021 which were open for business during the entirety of these fiscal years.

2020

• All Units Reported:  308
• Total Franchised Units Reported:  276
• Franchised Units Over $1,000,000:  64
• % of Franchised Units to Total Reported:  23.19%
• Total Affiliated Units Reported:  32
• Affiliated Units Over $1,000,000:  14
• % of Affiliated Units to Total Reported:  43.75%

2021

• All Units Reported:  315
• Total Franchised Units Reported:  282
• Franchised Units Over $1,000,000:  78
• % of Franchised Units to Total Reported:  27.66%
• Total Affiliated Units Reported:  33
• Affiliated Units Over $1,000,000:  14
• % of Affiliated Units to Total Reported:  42.42%

Part 3 – Average Gross Sales and Food, Paper, and Labor Cost Information of Certain Hungry Howie’s Units for the 52 Weeks Ended December 26, 2021

• Hungry Howie’s examined income statements of certain Hungry Howie’s Units as described below for the entire 52-week period from December 27, 2020 to December 26, 2021. The income statements have not been audited. Income statements received by Hungry Howie’s that showed obvious and material inconsistencies or defects were not used in this analysis.

• The data below was derived from Gross Sales and select cost information obtained from income statements Hungry Howie’s received as of March 14, 2022 from Franchised Units, Affiliated Units, and All Units. The Units used in this analysis were open the entirety of the fiscal year.

Franchised Units

• Number of Units:  250
• Average Annual Gross Sales:  $853,787
• Number and Percentage of Units Which Attained or Surpassed the Average:  113/45.20%
• Average Food Cost:  24.01%
• Average Paper Cost:  3.47%
• Average Labor Cost:  17.80%
• Average Total Food, Paper, and Labor Cost:  45.28%

Affiliated Units

• Number of Units:  33
• Average Annual Gross Sales:  $992,595
• Number and Percentage of Units Which Attained or Surpassed the Average:  14/42.42%
• Average Food Cost:  23.66%
• Average Paper Cost:  3.51%
• Average Labor Cost:  20.86%
• Average Total Food, Paper, and Labor Cost:  48.03%

All Units

• Number of Units:  283
• Average Annual Gross Sales:  $869,973
• Number and Percentage of Units Which Attained or Surpassed the Average:  128/45.23%
• Average Food Cost:  23.96%
• Average Paper Cost:  3.48%
• Average Labor Cost:  18.21%
• Average Total Food, Paper, and Labor Cost:  45.65%

• “Food Cost” means the cost of all food and beverages purchased to produce the Menu Items sold at certain Hungry Howie’s Units. The Menu Items sold at certain Hungry Howie’s Units are substantially the same.

• “Paper Cost” means the cost of all pizza boxes and other containers or packaging purchased for the Menu Items sold at certain Hungry Howie’s Units. Pizza boxes and other containers or packaging purchased for the Menu Items sold at certain Hungry Howie’s Units are substantially the same.

• “Labor Cost” means the actual labor cost of all production and delivery personnel in certain Hungry Howie’s Units, excluding any tax burdens, bonuses, or benefits. Labor Cost also excludes any amounts paid to Managers and/or the Owners.

Section VI – Hungry Howie’s Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️