Hot Box Pizza Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$222,725 - $394,725
Franchise Fee
$20,000
Total US Locations
23
Business Summary
Hot Box Pizza operates pizza stores that offer dine-in, takeout, and delivery of specialty pizzas, customized pizzas, breadstix, and dipping sauces. These stores feature a distinctive and youthful décor.
Corporate History
Hot Box Pizza Franchising, LLC was formed as an Indiana limited liability company on January 17, 2008, specifically to offer Hot Box Pizza franchises. The company began franchising in 2008. Its affiliate, Hot Box Pizza, LLC, was established earlier on August 14, 2006, and currently operates 7 Hot Box Pizza locations. This affiliate previously owned 3 other locations that were converted into franchised units in 2008, 2018, and 2023.
Financial Overview
Investment Range
$222,725 - $394,725
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$35,000
Royalty %
4.5%
Marketing %
1.5%
Equipment Costs (Low)
$125,000
Equipment Costs (High)
$240,000
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion, Going concern qualification
Financial Health Notes
The independent auditors for Hot Box Pizza Franchising, LLC have expressed substantial doubt about the company's ability to continue as a going concern. This concern stems from Hot Box Pizza Franchising, LLC's recurring operational losses and a significant working capital deficit. As of December 31, 2023, the company had a working capital deficit exceeding $1.2 million, which is an increase from approximately $898,000 in the previous year. Hot Box Pizza Franchising, LLC also reported net losses of $322,610 in 2023, $492,074 in 2022, and $220,131 in 2021. This financial situation indicates that Hot Box Pizza Franchising, LLC currently lacks sufficient liquid assets to cover its short-term financial obligations, which could potentially impact its capacity to support its franchisees.
Financing Details
Hot Box Pizza does not offer any direct or indirect financing to its franchisees, nor does it guarantee any lease, note, or other financial obligations for them.
Performance Metrics
Total US Locations
23
Franchised Units
16
Corporate Units
7
Avg Square Footage
2,000
Franchising Since
2008
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Hot Box Pizza has no litigation history to report.
Bankruptcy History
Hot Box Pizza has no bankruptcy history to report.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, Hot Box Pizza franchisees must have fully complied with the original agreement, possess the right to maintain their approved location or a suitable substitute, and have made all necessary capital expenditures to keep the store consistent with the current system standards. They must also have no outstanding monetary obligations to Hot Box Pizza, not be in default of any agreement, and provide timely written notice of their intent to renew. Renewal requires signing the then-current franchise agreement (which may have different terms), complying with updated training requirements, and signing a general release.
Training & Support Program
Franchisor Assistance
Hot Box Pizza provides comprehensive assistance to its franchisees both before and after their stores open. Before opening, Hot Box Pizza helps with site selection by designating geographic areas, providing criteria, and reviewing proposed locations, as well as approving leases. It also provides specifications for remodeling, equipping, and supplying the store. Franchisees receive an initial training program and on-site assistance for opening the store, along with access to the Confidential Operations Manual. After opening, Hot Box Pizza offers ongoing support through periodic advice and guidance via phone, email, and newsletters. It conducts periodic on-site visits for consultation and assistance, offering suggestions for operational improvements, provides ongoing training as needed, approves local advertising materials, and issues updates to the Confidential Operations Manual.
Initial Training Hours
296
Training Location
Hot Box Pizza's headquarters in Indianapolis, Indiana, and the franchisee's own franchised pizza store.
Ongoing Support
Hot Box Pizza provides ongoing support to its franchisees through periodic advice and general guidance via telephone, email, facsimile, and newsletters. The franchisor also conducts periodic on-site visits to the pizza stores for consultation and assistance, offering suggestions for operational improvements. Ongoing training programs are made available, and franchisees, managers, or employees may be required to attend refresher training at the franchisor's headquarters or another designated location, with the franchisee covering their own expenses. Hot Box Pizza also approves local advertising materials and provides updates to the Confidential Operations Manual.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Exclusive
Territory Size Requirements
Hot Box Pizza defines territories as a minimum 2-mile radius around the franchisee's approved location. The specific boundaries are determined by factors such as population, median population age, proximity to competitors, other Hot Box Pizza franchisees, and natural, physical, or political boundaries.
Staffing Notes
Hot Box Pizza requires that each location be under the direct, full-time, day-to-day supervision of a designated manager who has satisfactorily completed the initial training program. Franchisees must train their own employees and other management personnel. The franchisor provides job descriptions for various roles including Owner/Operator, Assistant Manager, Shift Manager, Pizza Maker, Order Taker, and Delivery Driver. Franchisees are responsible for scheduling employee work hours, conducting inventory, managing labor costs, and maintaining cash controls. The franchisor also provides policies on fair employment practices, sexual harassment, compliance with wage and labor laws (including those for tipped employees and the Immigration Reform and Control Act), and guidelines for recruitment, selection, orientation, and performance evaluation.