Huddle House Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$384,305 - $1,429,150
Franchise Fee
$13,500
Total US Locations
272
Business Summary
Huddle House, Inc. offers franchises for the operation of full-service restaurants that serve all meals, including breakfast foods, throughout their hours of operation. Huddle House Restaurants provide customers with on-premises dining, personal carry-out, off-site catering, and delivery services within a designated territory or pre-approved geographic areas. The menu features a wide variety of items such as steaks, sandwiches, hamburgers, chicken, shrimp, potatoes, vegetables, desserts, beverages, and a comprehensive breakfast menu.
Corporate History
Huddle House, Inc. was incorporated in Georgia on April 22, 1964, and has continuously operated Huddle House Restaurants since that time. The company began offering franchises in 1966, developing a distinctive system for retail food sales and restaurant operations. Huddle House, Inc. is currently a wholly-owned subsidiary of Griddle Holdings, Inc., which is itself a subsidiary of Huddle House Holdings, Inc. In 2018, Peachtree Parentco, Inc. acquired these entities and is ultimately managed by Elysium Management LLC. In 2019, an affiliate, Perkins LLC, acquired and began franchising Perkins family dining restaurants. Huddle House, Inc. also operates a food division that supplies products to its restaurants and has introduced optional 'Virtual Product Offerings,' such as 'Papa Corazón's Quesadillas,' for franchisees to operate from their existing restaurant kitchens.
Financial Overview
Investment Range
$384,305 - $1,429,150
Franchise Fee (Low)
$13,500
Franchise Fee (High)
$35,000
Royalty %
4.75%
Marketing %
3%
Equipment Costs (Low)
$100,000
Equipment Costs (High)
$300,000
Working Capital
$62,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Huddle House, Inc.'s financial statements indicate significant financial challenges, including a negative stockholders' equity of $(1,032) thousand as of April 30, 2024, and consistent net losses for the past three fiscal years. The company also has negative working capital, with current liabilities significantly exceeding current assets ($51,050 thousand current liabilities vs. $14,257 thousand current assets as of April 30, 2024). This raises questions about Huddle House, Inc.'s financial ability to provide services and support to its franchisees, as highlighted in the FDD's special risks section.
Financing Details
Huddle House, Inc. primarily does not offer direct or indirect financing to its franchisees. However, in certain situations for new development units, Huddle House, Inc. may finance a portion of the Initial Franchise Fee and security deposit through a Promissory Note. These notes carry a fixed annual interest rate not exceeding 14.5% and are repayable in 60 or fewer equal monthly installments. There is no prepayment privilege or penalty for these notes. For Resale Units, Huddle House, Inc. may also provide specific financing arrangements. While Huddle House, Inc. may refer prospective franchisees to third-party lenders, it does not receive payments from these lenders nor does it make recommendations.
Performance Metrics
Total US Locations
272
Franchised Units
216
Corporate Units
56
Avg Square Footage
2,450
Franchising Since
1966
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
9
Litigation Summary
Huddle House, Inc. has 9 disclosed litigation cases, with four currently pending. Three of the pending cases, filed in August and September 2020, involve Huddle House, Inc. suing franchisees for abandonment, unauthorized use of its trademarks, and failure to meet post-termination obligations, seeking both injunctive relief and damages. In one of these cases, the court awarded Huddle House, Inc. $167,595.11 in May 2024, which is currently under appeal. Another pending case from August 2022 involves Huddle House, Inc. suing franchisees for abandoning several restaurants, failing to remove branding, not complying with post-termination requirements, and defaulting on a promissory note; this case is currently stayed due to a defendant's bankruptcy filing in February 2024. A separate pending case from December 2014, involving a former franchisee who claims Huddle House, Inc. provided false revenue projections and opening costs, is still awaiting a ruling on a motion to dismiss. Five other cases have been completed, including two filed in 2021 that were resolved through settlements for $160,000 and $95,000, respectively. Other resolved cases involved Huddle House, Inc. pursuing damages and injunctions for various defaults and unauthorized competitive operations by franchisees.
Bankruptcy History
Huddle House, Inc. has no bankruptcy history to report.
Agreement Terms
Initial Term
15 years
Renewal Term
5 years
Renewal Conditions
To renew, Huddle House, Inc. franchisees can renew their franchise for up to three additional 5-year terms if they meet certain conditions. These include giving notice between 6 and 12 months before the current term expires, paying a renewal fee equal to 25% of the then-current initial franchise fee, and complying with Huddle House, Inc.'s current terms and conditions for renewal. Franchisees must also sign a new franchise agreement, which may have different terms, sign a legal release, and ensure their restaurant, equipment, and furnishings meet current Huddle House, Inc. standards. They also need to demonstrate the right to possess the premises for the renewal term or secure an alternative site acceptable to Huddle House, Inc.
Training & Support Program
Franchisor Assistance
Huddle House, Inc. provides comprehensive assistance to its franchisees. Before opening, Huddle House, Inc. offers up to 40 days of training for the franchisee and their designated manager, along with up to 14 days of on-site pre-opening or opening assistance. Franchisees receive copies of the operations manuals, minimum site location standards, and counseling for site selection. Huddle House, Inc. will review and approve proposed sites and furnish advisory services for construction and pre-opening activities. The franchisor also provides system standards and specifications for all required fixtures, equipment, signs, inventory, and supplies. On an ongoing basis, Huddle House, Inc. shares information on operating problems, new techniques, and business procedures. Franchisees can participate in group purchasing programs and benefit from periodic evaluations of their restaurant's products and services. Huddle House, Inc. may also provide periodic guidance on pricing.
Initial Training Hours
300
Training Location
Huddle House, Inc. training is typically conducted at a designated Huddle House Certified Training Restaurant or other company-owned and/or franchised restaurants. Some classroom training may be held at Huddle House, Inc.'s Support Center or conducted virtually through electronic communications, as determined by the franchisor.
Ongoing Support
Huddle House, Inc. provides ongoing support by sharing information on operating problems, new techniques, and improved business procedures. Franchisees can participate in group purchasing programs and benefit from periodic evaluations of their restaurant and its offerings. Additionally, Huddle House, Inc. may require franchisees, their managers, and other employees to attend additional courses, seminars, and training programs, for which fees may apply. Huddle House, Inc. also conducts annual or periodic system-wide or regional conferences, which franchisees may be required to attend.
Franchise Requirements
Ideal Candidate Profile
Huddle House is looking for qualified individuals or entities (corporations, partnerships, or limited liability companies) to operate its full-service restaurants. For individual franchisees, or owners of franchisee entities, it is recommended that they personally supervise the operation of their franchise. During the first two months of operation, the franchisee or one of its owners with at least a 10% equity stake must serve as an on-premises designated manager for a minimum of 30 peak operating hours per week. All designated managers must be certified by Huddle House and satisfactorily complete its initial training program. Owners with at least a 5% ownership interest in an entity franchisee, along with their spouses, are required to sign a personal guaranty. Huddle House also offers opportunities for qualified, multiple-unit operators.
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
protected
Territory Size Requirements
Huddle House, Inc. typically defines its franchise territories for new traditional units based on a geographic radius: approximately one-half mile for urban locations, two miles for suburban locations, and up to three miles for locations outside suburban areas. The specific territory size is determined by Huddle House, Inc. after the franchisee proposes and the franchisor approves the unit's premises. Non-Traditional Units do not receive a defined territory.
Staffing Notes
Huddle House, Inc. requires each franchise to be operated by the franchisee or a designated manager, with personal supervision recommended. For the first two months of operation, the franchisee (or an owner with at least 10% equity, if an entity) must serve as an on-premises designated manager for a minimum of 30 peak operating hours per week. Designated managers must be certified by Huddle House, Inc. and complete the initial training program within 60 days of designation. Managers are restricted from working for competing breakfast-serving restaurants during their employment with a Huddle House, Inc. franchise. The initial training program for the franchisee and two additional managers is 30 days. Huddle House, Inc. emphasizes that franchisees must hire and retain an adequate number of employees to diligently operate the business and maximize profits.