Risk Score
Pending analysis
Investment Range
$1,064,500 - $3,949,000
Franchise Fee
$25,000
Min Cash Required
$75,000
Total US Locations
66
Business Summary
Bar Louie operates gastrobar restaurants that offer upscale casual food and alcoholic beverages for on-premises consumption, as well as third-party delivery and catering services. Franchisees operate these businesses using the Bar Louie brand and its distinctive system of operations, including proprietary food products, menus, and service procedures.
Corporate History
The first Bar Louie restaurant opened in Chicago in 1990. The brand was initially franchised by Bar Louie Development, Inc. from 2006 to May 2010. The current franchisor entity, BLH Restaurant Franchises LLC, was organized in Delaware on May 27, 2020. This entity became the franchisor of the Bar Louie system after its parent, BLH Acquisition Co. LLC, acquired substantially all assets of the prior franchisor, BL Restaurant Franchises LLC (and its affiliates), following their Chapter 11 bankruptcy filing in January 2020. The previous franchisor entities were dissolved in 2023.
Financial Overview
Investment Range
$1,064,500 - $3,949,000
Franchise Fee (Low)
$25,000
Franchise Fee (High)
$50,000
Minimum Cash Required
$75,000
Royalty %
5%
Marketing %
1.5%
Equipment Costs (Low)
$710,000
Equipment Costs (High)
$2,710,000
Working Capital
$150,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Bar Louie's financial condition, as reflected in its financial statements, raises questions about the franchisor's ability to provide services and support to franchisees. The company's ultimate parent entity, BLH TopCo, LLC, reported a Members' deficit of ($20,097) in 2023 and ($5,505) in 2022. Total liabilities significantly exceeded total assets ($110,589 vs $90,492) in 2023. The company also experienced net losses of ($14,592) in 2023 and ($5,320) in 2022. Unaudiated interim financials as of April 28, 2024, show a further increased Stockholder's Deficit of ($26,110) and total liabilities exceeding total assets. An amendment to the credit agreement in April 2024 made the outstanding balance of term loans and revolving credit facility due by April 30, 2025, and established minimum weekly liquidity requirements.
Financing Details
Bar Louie does not offer any direct or indirect financing for the initial franchise fee, nor does it guarantee any of the franchisee's note or lease obligations.
Performance Metrics
Total US Locations
66
Franchised Units
18
Corporate Units
48
Avg Square Footage
7,000
Franchising Since
2006
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Count
1
Litigation Summary
Bar Louie's predecessor, BL Restaurant Franchises LLC, was involved in one litigation case that concluded prior to the last three years. This case, filed in 2018, involved a series of disputes with a franchisee group (the Fortney family) who operated Bar Louie Restaurants. The lawsuit sought to enjoin the franchisees from violating their franchise agreements and closing a restaurant. Subsequently, the parties proceeded to arbitration where the Fortneys filed counterclaims, alleging violations of the Minnesota franchise statute, deceptive trade practices, breach of contract, tortious interference, fraud, and negligent misrepresentation. The parties reached a settlement in which the Fortneys dismissed all their claims against the franchisor, and agreed to transfer their Columbus restaurant to the franchisor, leading to the dismissal of the franchisor's action. No other litigation is required to be disclosed by Bar Louie.
Bankruptcy History
In 2020, a predecessor to Bar Louie, BL Restaurant Franchises LLC, along with affiliated entities, filed for Chapter 11 bankruptcy. The bankruptcy court approved the sale of the Debtor Entities' assets to BLH Acquisition Co. LLC, and BLH Restaurant Franchises LLC became the franchisor of the Bar Louie system in May 2020. The Debtor Entities' reorganization plan was approved in 2021, and they were dissolved in June 2023. Additionally, Brian Wright, Bar Louie's current CEO, was the CEO of Bertucci's, Inc. when that company filed for Chapter 11 bankruptcy in April 2018; this case was dismissed in January 2020. Bar Louie states that no other bankruptcy is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew, Bar Louie franchisees must give written notice of their intent to renew 6 to 12 months before the agreement ends. They must remodel and refurbish their restaurant to meet current Bar Louie standards for new restaurants and upgrade computer systems. Franchisees must be in material compliance with all agreements and have timely met all financial obligations. They also need to sign the then-current form of franchise agreement (which may have materially different terms), pay a renewal fee of $25,000 or 50% of the then-current initial franchise fee (whichever is more), sign a mutual general release of claims, and ensure all personnel meet current qualification and training requirements. Additionally, franchisees must provide proof of the right to occupy the location for the entire renewal term and be current with all lessor and supplier obligations.
Training & Support Program
Franchisor Assistance
Before opening, Bar Louie provides franchisees with written approval or disapproval of proposed sites, approves the lease for the restaurant site, and trains the franchisee and their designated general and assistant managers. Bar Louie also lends confidential brand manuals, evaluates the business before opening, and provides standard layout, design, and image specifications. After opening, Bar Louie provides guidelines and approval for all promotional materials and advertising. The franchisor administers a Marketing Fund (to which franchisees contribute 1.5% of gross sales), has the right to create regional advertising funds, and requires franchisees to spend 3% of gross sales monthly on local advertising. Bar Louie periodically modifies the System, including new trademarks, menu items, or equipment. They offer guidance on operations and management, including on-premises assistance (for which franchisees pay fees and expenses). Bar Louie also conducts periodic inspections, provides specifications for the point-of-sale (POS) system, and requires franchisees to use a designated system-wide data management platform.
Initial Training Hours
200
Training Location
Bar Louie Corporate Training Restaurant
Ongoing Support
Bar Louie provides ongoing assistance to its franchisees, including reviewing and approving all promotional materials and advertising. The franchisor administers a Marketing Fund, and may establish regional advertising funds. Bar Louie periodically modifies its System, which can include new menu items, products, equipment, or techniques. The franchisor offers guidance on restaurant operations and management, including on-premises assistance (for which franchisees pay fees and travel expenses). Bar Louie also conducts periodic inspections of the restaurant operations and provides specifications for the required point-of-sale (POS) system and data management platform.
Franchise Requirements
Ideal Candidate Profile
Bar Louie seeks franchisees with strong business and managerial acumen, good moral character, business reputation, and a solid credit rating. Ideal candidates should demonstrate the aptitude and ability to operate the Bar Louie gastrobar business, which may be evidenced by prior related business experience. Franchisees must have adequate financial resources and capital to operate the business. The Managing Owner or General Manager is expected to be hands-on, dedicating approximately 60 hours per week to the management, operation, and development of the Restaurant. Franchisees and their designated managers must complete Bar Louie's initial and periodic training programs.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
Protected
Territory Size Requirements
Bar Louie territories are defined by specific geographical areas, with size varying based on market nature, population density, and demographics. The minimum radius is typically one-quarter of a mile in urban settings and three miles in less densely populated areas. For restaurants within limited use facilities (like airports or hotels), the territory is limited to that specific facility.
Staffing Notes
Bar Louie requires each restaurant to employ at least one full-time General Manager (who can be the Managing Owner), one full-time Kitchen Manager, one full-time Bar Manager, and one full-time Front of House Manager, plus other managers as needed for daily operations. These managers must complete all required training and work approximately 60 hours per week. All managerial staff and employees with access to confidential information must sign non-disclosure and non-compete agreements. Bar Louie also advises franchisees to use a human relations professional for HR and personnel guidance.