Daddy’s Chicken Shack Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$168,800 - $825,900
Franchise Fee
$125,000
Total US Locations
15
Business Summary
Daddy's Chicken Shack Regional Developer Business offers and supports franchises for Daddy's Chicken Shack restaurants. Regional developers identify and qualify prospective restaurant franchisees within a designated territory, and then provide ongoing support and assistance to those restaurant franchisees. Daddy's Chicken Shack restaurants specialize in selling chicken sandwiches and other complementary menu items for both on-premises and off-premises consumption.
Corporate History
Daddy's Chicken Shack Franchising, LLC was formed on February 22, 2021, as a Delaware limited liability company. It began offering franchises for its Daddy's Chicken Shack restaurants in 2021 and for regional developer businesses in 2022. Its parent company, Daddy's Chicken Shack Holdings, LLC, was formed in March 2021. An affiliate, Daddy's Chicken Shack Operations, LLC, also formed in February 2021, operates one Daddy's Chicken Shack restaurant. The organization is also affiliated with POS Franchising, LLC, which began offering Port of Subs franchises in 2023 after an acquisition by another affiliate, POS Holdings, LLC.
Financial Overview
Investment Range
$168,800 - $825,900
Franchise Fee (Low)
$125,000
Franchise Fee (High)
$750,000
Equipment Costs (Low)
$14,000
Equipment Costs (High)
$24,500
Working Capital
$32,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Daddy's Chicken Shack Franchising, LLC has historically experienced net losses and negative cash flows from operations, resulting in negative working capital and an accumulated member's deficit as of December 31, 2023. This financial situation raises questions about the company's ability to continue operating. However, management is actively working to improve cash flow through franchise sales, and the parent company intends to provide financial assistance if needed to ensure the company can meet its funding requirements for at least the next year.
Financing Details
Daddy's Chicken Shack does not offer any direct or indirect financing arrangements to its regional developer franchisees, nor does it guarantee any of their notes, leases, or other obligations. Regional developer franchisees are responsible for securing their own financing.
Performance Metrics
Total US Locations
15
Franchised Units
15
Corporate Units
0
Avg Square Footage
750
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Daddy's Chicken Shack has no litigation required to be disclosed in this FDD document.
Bankruptcy History
Daddy's Chicken Shack has no bankruptcy information to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew, Daddy's Chicken Shack regional developers must not be in default of their existing agreement and must give written notice between 12 and 18 months before the term ends. They will need to sign Daddy's Chicken Shack's then-current regional developer agreement, which may have different terms, and a general release of claims. All financial obligations to Daddy's Chicken Shack must be satisfied, and a renewal fee of $10,000 multiplied by the number of franchised restaurants in the territory must be paid. Regional developers must also show they can keep their office premises for the renewal term and may be required to remodel their office and complete additional training.
Training & Support Program
Franchisor Assistance
Daddy's Chicken Shack provides pre-opening training on its system, methods, and procedures, along with additional assistance for opening the regional developer business. It loans or provides access to confidential manuals and offers merchandising, marketing, and other related advice. On an ongoing basis, Daddy's Chicken Shack monitors training, makes training available for future management employees, provides revised manuals, offers periodic merchandising and marketing advice, and gives individual or group consultation and assistance by various means like personal visits, phone, mail, or email. It also provides bulletins, brochures, and reports.
Initial Training Hours
24
Training Location
Denver, CO or other designated locations
Ongoing Support
Ongoing support for Daddy's Chicken Shack regional developers includes monitoring training levels and making training available to all future management employees. Daddy's Chicken Shack provides updated manuals and offers merchandising, marketing, and other related advice. Regional developers also receive periodic individual or group consultation and assistance through personal visits, telephone, mail, or email as deemed necessary. Additionally, regional developers and designated individuals may be required to attend refresher courses, seminars, and other training programs for up to 10 days each year, as well as an annual convention for up to three days annually.
Franchise Requirements
Ideal Candidate Profile
Daddy's Chicken Shack seeks regional developer candidates who possess expertise and sufficient capital to operate the business. Ideal candidates demonstrate educational, managerial, and business standards, along with good moral character, business reputation, and credit rating. They should have the aptitude and ability to operate a regional developer business, which may be shown through prior relevant business experience. The regional developer or their designated Operating Principal must complete Daddy's Chicken Shack's training program and be approved to supervise daily operations.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
Yes
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
full-time
Territory Type
Non-Exclusive
Territory Size Requirements
Daddy's Chicken Shack regional developer territories are defined by geographic areas that are designated in the Regional Developer Agreement. The size and boundaries are determined by factors such as population base, density, growth trends, affluence, density of residential and business entities, traffic generators, driving times, and major topographical features. While specific sizes are not detailed, the regional developer territory fee calculation indicates territories have a base population of 1,000,000, with additional fees for populations exceeding that number, potentially up to 5,000,000 people.
Staffing Notes
Daddy's Chicken Shack regional developers must maintain a competent, trained staff sufficient to serve restaurant franchisees and solicit new ones. This includes ensuring at least one manager is on duty at all times. The Operating Principal, who must own at least 5% of the regional developer's equity and complete required training, is responsible for direct day-to-day operations. A General Manager, also subject to Daddy's Chicken Shack's approval and training, is responsible for direct oversight and management of daily operations and personnel. The Operating Principal and General Manager can be the same person if qualified. Daddy's Chicken Shack regional developers are solely responsible for all employment decisions, including hiring, firing, training, and compliance with labor laws for their employees.