HHO Carbon Clean Systems Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$108,380 - $420,330
Franchise Fee
$25,000
Total US Locations
14
Business Summary
HHO Carbon Clean Systems operates a mobile business that provides on-site carbon cleaning services for gasoline and diesel engines. It also sells on-demand hydrogen equipment and related automotive products and services. The business can be managed from a home-based administrative office, with services delivered directly at customer locations.
Corporate History
HHO Franchise, LLC was established in October 2020 as a Kentucky limited liability company. It operates the HHO Carbon Clean Systems franchise system and began offering franchises in October 2020. The company does not have any predecessors or a parent company. An affiliate, HHO Carbon Clean Systems, LLC, was established in June 2020 and provides equipment installation services to franchisees, also operating a similar HHO business. Another affiliate, HHO IP, LLC, established in October 2020, owns and licenses the brand's trademarks to HHO Franchise, LLC for use in the franchise system.
Financial Overview
Investment Range
$108,380 - $420,330
Franchise Fee (Low)
$25,000
Franchise Fee (High)
$279,900
Royalty %
8%
Equipment Costs (Low)
$43,980
Equipment Costs (High)
$101,680
Working Capital
$15,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The FDD itself highlights concerns about HHO Carbon Clean Systems' financial condition, stating that its financial statements "call into question the franchisor's financial ability to provide services and support" to franchisees. The company has a negative members' equity (deficit) of over $578,000 in 2024 and incurred significant net losses of over $325,000 in 2024 and $277,000 in 2023. The auditors also noted an "Emphasis of Matter" regarding the company's extensive transactions and relationships with affiliates and owners, indicating the financial statements may not reflect operations if the company operated independently.
Financing Details
HHO Carbon Clean Systems, through its affiliate HHO Carbon Clean Systems, LLC, offers direct financing for equipment purchases under its Performance Plus Retail Leasing Program. Franchisees can finance between $3,000 and $5,000 with a down payment ranging from $1,000 to $3,000. The loan term is 6 months, with interest rates varying from 8.5% to 11.5% per annum, depending on the amount financed. Monthly payments range from $521 to $861. This financing requires a personal guaranty and a UCC-1 security interest. Default can lead to equipment repossession, outstanding debt, and potential franchise termination.
Performance Metrics
Total US Locations
14
Franchised Units
14
Corporate Units
1
Franchising Since
2020
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
HHO Carbon Clean Systems has no litigation history to report.
Bankruptcy History
HHO Carbon Clean Systems has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew with HHO Carbon Clean Systems, franchisees must comply with their existing Franchise Agreement and related agreements, including the Owner and Spouse Agreement and Guaranty. They need to provide HHO Carbon Clean Systems with 180 days' written notice of their intent to renew. Franchisees must also sign the franchisor's then-current Franchise Agreement and related agreements for the renewal term, sign a general release in favor of HHO Carbon Clean Systems, pay a renewal fee, and fulfill all other renewal requirements specified in the Franchise Agreement. Owners and their spouses must personally guarantee the terms of the new renewal Franchise Agreement, which may have materially different terms.
Training & Support Program
Franchisor Assistance
HHO Carbon Clean Systems provides a range of assistance to its franchisees. Before opening, the franchisor grants the franchise, reviews and approves the franchisee's operating territory and administrative office location (which can be home-based). Franchisees receive access to confidential operations manuals, lists of approved suppliers and equipment, and are listed on the HHO Carbon Clean Systems website. Initial training, lasting approximately five days in Paducah, Kentucky, is provided for the franchisee or managing owner and one designated manager at no extra charge, though franchisees cover travel and wages. After opening, HHO Carbon Clean Systems communicates operating standards, marketing guidelines (requiring pre-approval for all marketing), and updates on approved vendors. The franchisor may also coordinate an annual system conference, requiring franchisee attendance (up to 5 days per year), for which a fee (not exceeding $1,500) and travel/lodging expenses are the franchisee's responsibility. Supplemental training is offered, either upon franchisee request or if required by the franchisor due to performance concerns, with a fee of $500 per trainer per day plus expenses. Training for replacement operating managers is also available for a fee of $400 per person per day. While HHO Carbon Clean Systems may administer system-wide marketing funds, it does not currently charge a Brand Development Fund fee. Franchisees are responsible for hiring and training their own employees, but it may offer suggested pricing levels for services.
Initial Training Hours
41
Training Location
Paducah, Kentucky
Ongoing Support
HHO Carbon Clean Systems provides ongoing support to franchisees by establishing and communicating operating standards, procedures, and system requirements, including approved services, products, and marketing standards which require pre-approval. The franchisor also designates approved vendors and suppliers. HHO Carbon Clean Systems may organize an annual system conference, requiring franchisee attendance (up to 5 days per year), for which a fee (not exceeding $1,500) and travel/lodging expenses are the franchisee's responsibility. Supplemental training is offered, either upon franchisee request or if required by the franchisor due to performance concerns, with a fee of $500 per trainer per day plus expenses. Training for replacement operating managers is also available for a fee of $400 per person per day. While HHO Carbon Clean Systems may administer system-wide marketing funds, it does not currently charge a Brand Development Fund fee. HHO Carbon Clean Systems does not provide assistance with hiring or training employees, but it may offer suggested pricing levels for services.
Franchise Requirements
Ideal Candidate Profile
HHO Carbon Clean Systems seeks franchisees who, or whose approved Managing Owner, are personally responsible for the daily, full-time management and supervision of the franchised business. The Managing Owner must successfully complete the initial training program and obtain all necessary licenses and permits. If a manager is hired, they must also meet the franchisor's minimum criteria for managers, complete training, and sign confidentiality and non-competition agreements.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Full-Time
Territory Type
Limited
Territory Size Requirements
HHO Carbon Clean Systems defines each territory as a geographic area with an approximate population of 250,000 people. Franchisees can purchase additional territories, each also encompassing around 250,000 people, with population calculated based on raw data without considering demographics or age.
Staffing Notes
HHO Carbon Clean Systems franchisees are solely responsible for managing and supervising their employees, as the franchisor does not provide assistance with hiring or training staff. Employees must wear approved System-branded uniforms and apparel. Franchisees must also ensure that all System Supplies and Approved Services and Products are prepared, maintained, and served according to System standards and manuals. If a franchisee chooses to hire a manager, that individual must meet the franchisor's minimum criteria for managers, complete the initial training program, and sign confidentiality and non-competition agreements.