Hawaiian Bros Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$1,539,160 - $4,818,991
Franchise Fee
$50,000
Total US Locations
42
Business Summary
Hawaiian Bros Island Grill operates restaurants that specialize in serving the traditional Hawaiian plate lunch, alongside other fresh, high-quality Hawaiian cuisine in a Hawaiian-themed setting. These restaurants offer a distinctive atmosphere and menu, including side dishes, desserts, and beverages. They typically operate in metropolitan areas from re-purposed free-standing buildings or shopping center spaces, often providing drive-thru, dine-in, and carry-out services. The business targets customers seeking quick service and reasonably priced, high-quality island comfort food.
Corporate History
The Hawaiian Bros Island Grill concept began in February 2018 when the first restaurant was opened in Belton, Missouri by affiliates of Hawaiian Bros Franchising, LLC. Hawaiian Bros Franchising, LLC itself was organized as a Missouri limited liability company in February 2022 and started offering franchises for Hawaiian Bros Island Grill restaurants in September 2022. The franchising entity is a wholly-owned subsidiary of Hawaiian Bros Inc., which owns the trademarks, recipes, and works with approved distributors for proprietary products. Another affiliate, HBGC, LLC, manages the Hawaiian Bros Island Grill gift card program.
Financial Overview
Investment Range
$1,539,160 - $4,818,991
Franchise Fee (Low)
$50,000
Franchise Fee (High)
$50,000
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$519,000
Equipment Costs (High)
$950,619
Working Capital
$195,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Hawaiian Bros Franchising, LLC's financial statements indicate that the company has relied on resources from its parent company, Hawaiian Bros Inc., to support its initial operations, including an initial cash contribution. The company continues to rely on its parent for ongoing administrative, management, and other support activities. The auditors note that the financial statements may not reflect conditions that would exist if the company operated as an unaffiliated entity without the parent's support. This is an emphasis of matter, but the audit opinion itself remains unqualified. The company had cash of $4,582 at December 31, 2023, and reported net income of $1,031,978 for the year ended December 31, 2023. Contract liabilities, representing unamortized upfront fees from franchisees, totaled $2,055,317 at year-end 2023, with a significant portion expected to be recognized as revenue in future years.
Financing Details
Hawaiian Bros Franchising, LLC does not offer any direct or indirect financing to its franchisees. The company also does not guarantee any notes, leases, or other financial obligations for its franchisees. Franchisees are responsible for arranging their own funding.
Performance Metrics
Total US Locations
42
Franchised Units
18
Corporate Units
24
Avg Square Footage
2,900
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Summary
Hawaiian Bros Franchising, LLC has no litigation that is required to be disclosed in Item 3 of its FDD. However, the company does disclose that its General Counsel, Cynthia Dillard Parres, was General Counsel and Risk & Compliance Officer of Houlihan's Restaurants, Inc. when that company filed for Chapter 11 bankruptcy in November 2019. This bankruptcy was for the purpose of selling most of its assets and was consummated in December 2019, with the liquidation plan confirmed in November 2020. This disclosure pertains to a past employer of an executive, not to litigation involving Hawaiian Bros Franchising, LLC itself.
Bankruptcy History
Hawaiian Bros Franchising, LLC itself has no bankruptcy history. However, the company's General Counsel, Cynthia Dillard Parres, was the General Counsel and Risk & Compliance Officer for Houlihan's Restaurants, Inc. from July 2007 to January 2020. Houlihan's Restaurants, Inc. and its affiliates filed for Chapter 11 bankruptcy in November 2019 to sell off most of its assets. The asset sale concluded in December 2019, and the bankruptcy court confirmed the liquidation plan in November 2020. This information is disclosed due to the General Counsel's past involvement with a company that underwent bankruptcy.
Agreement Terms
Initial Term
15 years
Renewal Term
15 years
Renewal Conditions
To renew their Hawaiian Bros Island Grill franchise for an additional 15-year term, franchisees must meet several conditions. They need to provide Hawaiian Bros Franchising, LLC with written notice of their intent to renew between 90 and 180 days before the current term expires. Franchisees must be in good standing, having met all financial and other significant obligations to Hawaiian Bros Franchising, LLC and its affiliates on time. They are required to sign Hawaiian Bros Franchising, LLC's then-current franchise agreement, which may have different terms and conditions, including potentially higher fees. Additionally, franchisees must comply with current training requirements, sign a legal release of claims against Hawaiian Bros Franchising, LLC and its affiliates, and ensure their restaurant and premises meet the most up-to-date brand standards, potentially requiring a comprehensive remodel.
Training & Support Program
Franchisor Assistance
Before a Hawaiian Bros Island Grill restaurant opens, Hawaiian Bros Franchising, LLC provides assistance with site selection guidelines and helps identify suitable locations within the designated territory. The franchisor furnishes lists of required furniture, fixtures, equipment, and approved suppliers for inventory and supplies. Franchisees, their General Managers, and Executive Management must complete an initial training program at Hawaiian Bros Franchising, LLC's headquarters or other designated locations in the Kansas City metropolitan area, which typically includes a blend of classroom and on-the-job training. Hawaiian Bros Franchising, LLC also offers advice on planning the grand opening marketing campaign and provides a new restaurant opening assistance team for the first two restaurant openings, covering travel, lodging, and meal expenses for their team. After the restaurant opens, Hawaiian Bros Franchising, LLC continues to offer support. This includes continued assistance from the opening team for one week post-opening for the first two restaurants. The franchisor makes ongoing training programs and seminars available, some of which may be mandatory and incur a fee. Additional on-site training can be provided upon request, with franchisees covering hourly fees and expenses for trainers. Hawaiian Bros Franchising, LLC manages and administers the Advertising and Development Fund, conducts occasional on-site inspections, arranges for the production and distribution of proprietary products, and provides updates to the Operations Manual. Franchisees are also invited to annual conventions and seminars, and are allowed to purchase equipment and inventory through any distribution network established by the franchisor.
Initial Training Hours
396
Training Location
Approved Company Owned Restaurant in Kansas City, online training and systems learning
Ongoing Support
After their Hawaiian Bros Island Grill restaurant opens, franchisees receive continued support from Hawaiian Bros Franchising, LLC's pre-opening team for one week. The franchisor provides access to ongoing training programs and seminars, some of which may be mandatory and incur additional fees. Upon request, Hawaiian Bros Franchising, LLC can offer additional on-site training at the franchisee's restaurant, with the franchisee responsible for hourly training fees and related expenses like travel and lodging. The franchisor also manages a national Advertising and Development Fund, conducts occasional on-site inspections of restaurants to ensure compliance with standards, and arranges for the production and distribution of proprietary food products. Franchisees receive updates and supplements to the Operations Manual as they become available. Additionally, franchisees in good standing are invited to attend annual conventions, seminars, and other franchisee-oriented events planned and sponsored by Hawaiian Bros Franchising, LLC.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Absentee Allowed
Territory Type
limited
Territory Size Requirements
Each Hawaiian Bros Island Grill franchise typically receives a limited competitive protection within a three-mile radius around the restaurant's front door. However, this protection excludes non-traditional venues physically located within this radius, as well as Special Outlets operated by Hawaiian Bros Franchising, LLC, its affiliates, or other licensees. The development area, where multi-unit operators acquire development rights, is generally defined by municipal or county boundaries, or as a specific trade area or sector within a municipality.
Staffing Notes
Hawaiian Bros Island Grill requires franchisees to designate a General Manager, who can be an owner or an employee, to supervise and manage the day-to-day operations of the restaurant on a full-time basis. This General Manager, along with all salaried managers, must successfully complete Hawaiian Bros Franchising, LLC's initial training program and become certified. Franchisees are also required to recruit, hire, and send qualified replacements for their General Manager and Executive Management for training within 60 days of a departure. The Operations Manual includes best practices, suggested recruiting and hiring guidelines, a suggested labor model, and communication boards for staffing. While specific staff counts are not provided, there's an emphasis on having appropriate training, supervision, and minimum levels of management for all personnel.