Risk Score
Pending analysis
Investment Range
$252,750 - $846,250
Franchise Fee
$240,000
Total US Locations
2
Business Summary
The Happy Joe's Area Director Business supports the Happy Joe's restaurant franchise system by recruiting, screening, and evaluating prospective franchise candidates. Area Directors also provide ongoing services to Happy Joe's franchisees within a specific geographic territory. In return for these services, Area Directors earn commissions based on initial franchise fees from new franchisees and a percentage of the royalty fees collected from operating franchisees in their territory. Area Directors must commit to developing a certain number of Happy Joe's restaurants, including establishing and operating at least one 'Pilot Restaurant' themselves, which serves as a flagship location and training facility for new franchisees.
Corporate History
Happy Joe's Franchising, Inc. was incorporated in Iowa on August 29, 2000. It has been offering Happy Joe's restaurant franchises and supporting its franchisees since September 2000. The Area Director Business franchise, as described in this document, has been offered since August 2023. The company is a subsidiary of Dynamic Restaurant Franchising, Inc., which in turn is a subsidiary of Dynamic Restaurant Holdings, LLC. Happy Joe's Franchising, Inc. also has an affiliate, Tony Sacco's Franchising, Inc., which franchises TONY SACCO'S restaurants, and another affiliate, Dynamic Restaurant Acquisition, Inc., which supplies computer maintenance, accounting, and management services.
Financial Overview
Investment Range
$252,750 - $846,250
Franchise Fee (Low)
$240,000
Franchise Fee (High)
$800,000
Royalty %
6%
Equipment Costs (Low)
$5,000
Equipment Costs (High)
$5,000
Working Capital
$5,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Happy Joe's Franchising, Inc. has reported net losses for the fiscal years ending September 30, 2024, 2023, and 2022, amounting to approximately $387,000, $111,000, and $302,000 respectively. These losses are attributed to a transition to new management, initiatives to reduce expenses, and the amortization of intangible assets. Management plans to continue reducing expenses and increasing revenues through new branding strategies, aiming for stable, positive cash flows from operations in the future.
Financing Details
Happy Joe's Franchising, Inc. does not offer any direct or indirect financing options to its Area Directors. The franchisor also does not guarantee any notes, leases, or other financial obligations incurred by the Area Director.
Performance Metrics
Total US Locations
2
Franchised Units
2
Corporate Units
0
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Summary
Happy Joe's Franchising, Inc. has no litigation that is required to be disclosed in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
The President and CEO of Happy Joe's Franchising, Inc., Thomas Sacco, was formerly the CEO of Flipdaddy's, LLC, which filed for Chapter 11 bankruptcy in December 2018; this case was dismissed in February 2021. Additionally, four operating affiliates of Happy Joe's Franchising, Inc. (HJ Dynamic Holdings, LLC, TS Dynamic Holdings, LLC, Dynamic Restaurant Acquisition, Inc., and TS Dynamic Acquisition, Inc.) filed for Chapter 11 bankruptcy protection in September 2022, primarily due to lease liabilities. These affiliates' Plan of Reorganization was approved in April 2023. Happy Joe's Franchising, Inc. states that these affiliate bankruptcies did not involve the franchisor itself or the main franchise system.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew the Area Director Agreement, Happy Joe's Area Directors must have met their development obligations and fully complied with the terms of their agreement. Both the Area Director and Happy Joe's Franchising, Inc. must mutually agree on a new development schedule for the extended term. Additionally, the Area Director must sign a general release of all claims against Happy Joe's Franchising, Inc. and its affiliates. The Area Director will also be required to sign the then-current form of Area Director Agreement, which may have terms materially different from their original agreement.
Training & Support Program
Franchisor Assistance
Happy Joe's Franchising, Inc. provides initial training for Area Directors and their designated employees. It also loans or provides electronic access to various restaurant operating manuals, including the Food and Beverage Manual, Accounting Manual, Certified Pizza Artist Training Manual, Certified Service Artist Training Manual, and Certified Delivery Driver Manual. During operation, Happy Joe's Franchising, Inc. reviews and approves all promotional materials and advertising used by the Area Director and, upon request, provides disclosure documents, brochures, and advertising formats.
Initial Training Hours
356
Training Location
Corporate headquarters in Davenport, Iowa
Ongoing Support
Happy Joe's Franchising, Inc. provides ongoing support to Area Directors by reviewing and approving all their promotional materials and advertising. Area Directors and their employees may also be required to attend periodic mandatory refresher training programs or seminars, not exceeding 3 programs or 6 business days annually. Access to an online training system is provided for employees for a quarterly fee of $35 per month. Additionally, Area Directors must attend any annual meetings held for Happy Joe's franchisees.
Franchise Requirements
Ideal Candidate Profile
Happy Joe's Franchising, Inc. seeks individuals or business entities to operate an Area Director Business. If the Area Director is an individual, they must personally participate in the direct operation of the business. If it is a business entity, a designated Key Person must maintain a controlling interest in the entity, attend and successfully complete the franchisor's initial training program for new franchisees, and meet the franchisor's current criteria for the position, which includes business and restaurant experience. Area Directors commit to developing at least six Happy Joe's restaurants in their territory, including one Pilot Restaurant that they must own and operate themselves to serve as a flagship and training facility.
Industry Experience Required
Yes
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Home-Based
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Staff Count
3