Kpot Hot Pot and Barbecue Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$733,200 - $1,918,600
Franchise Fee
$20,000
Min Cash Required
$75,000
Total US Locations
54
Business Summary
KPOT Franchise LLC operates full-service KPOT Hot Pot & Barbecue restaurants. These restaurants offer Korean BBQ and other dishes that are prepared using a Hot Pot cooking method directly at the dining table, featuring a variety of East Asian food and ingredients. Where legally permitted, the restaurants also include a full alcohol bar. Franchisees use KPOT Franchise LLC's proprietary recipes, sauces, spices, operational techniques, trade dress, trademarks, and logos.
Corporate History
KPOT Franchise LLC was formed as a New Jersey limited liability company in May 2021. The company began offering KPOT franchises in July 2021 and does not own or operate any of the restaurants it franchises. Its parent company, KPOT Enterprises, LLC, was also formed in May 2021. An affiliate, KPot, Inc., was incorporated in June 2017 and owns the proprietary marks, which it licenses to KPOT Franchise LLC. KPot, Inc. has previously granted licenses to others to operate under the KPOT name, with four such licensee locations currently open and operating.
Financial Overview
Investment Range
$733,200 - $1,918,600
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$50,000
Minimum Cash Required
$75,000
Royalty %
5%
Equipment Costs (Low)
$440,000
Equipment Costs (High)
$1,178,000
Working Capital
$112,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for KPOT Franchise LLC indicate a challenging financial condition, with negative total equity for both 2023 and 2022. Total liabilities significantly exceed total assets. The franchisor's financial condition, as reflected in its financial statements, raises questions about KPOT Franchise LLC's financial ability to consistently provide services and support to its franchisees.
Financing Details
KPOT Franchise LLC does not offer any direct or indirect financing to its franchisees. Franchisees are responsible for securing their own funding, and KPOT Franchise LLC does not guarantee any notes, leases, or other financial obligations for its franchisees.
Performance Metrics
Total US Locations
54
Franchised Units
39
Corporate Units
15
Avg Square Footage
9,000
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
KPOT Franchise LLC has no litigation history to report under Item 3 of its Franchise Disclosure Document. This means that KPOT Franchise LLC or its management have not been involved in any material litigation or bankruptcy proceedings that are required to be disclosed.
Bankruptcy History
KPOT Franchise LLC has no bankruptcy information to disclose under Item 4 of its Franchise Disclosure Document. This indicates that neither the franchisor nor its management have undergone any bankruptcy proceedings.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, KPOT Franchise LLC franchisees must provide written notice of their intent to renew within six months, but no later than three months, before the initial or current renewal term expires. They must be in substantial compliance throughout the term and in full compliance at expiration with the franchise agreement, their lease, and all other agreements with KPOT Franchise LLC or its affiliates. Franchisees must be current on all payments, agree to remodel or refurbish their restaurant to current brand standards if required, and sign a renewal franchise agreement along with a general release. The renewal agreement's terms and fees will be substantially similar to those offered to new franchisees at the time of renewal, but no new initial franchise fee will be charged, only a renewal fee. The designated territory may be re-evaluated during renewal.
Training & Support Program
Franchisor Assistance
KPOT Franchise LLC provides a range of support to its franchisees. Before opening, KPOT Franchise LLC offers written site selection guidelines and assistance, conducts on-site evaluations of proposed locations (at the franchisee's cost), provides standard architectural and design plans, and loans an operations manual (potentially electronic). The company also provides a list of approved products and suppliers. Initial training, lasting approximately 60 days, is provided at an affiliate's restaurant in Union, New Jersey, for up to three trainees, for which franchisees pay a fee. Additionally, a KPOT Franchise LLC representative provides up to seven days of on-site opening assistance and training around the restaurant's opening, with franchisees paying a weekly fee and reimbursing expenses. For multi-unit developers, KPOT Franchise LLC reviews potential sites, provides standard specifications and layouts, and reviews build-out plans. Ongoing assistance includes periodic visits and evaluations to maintain quality, advice and updates on management techniques and new developments, and administration of a Brand Development Fund for national and regional advertising. KPOT Franchise LLC may also hold mandatory training programs, seminars, and annual franchisee meetings.
Initial Training Hours
59
Training Location
Union, NJ
Ongoing Support
After opening, KPOT Franchise LLC provides ongoing support through periodic visits and evaluations of the restaurant and its offerings to ensure high standards are maintained. Franchisees receive advice and written materials, including updates to the operations manual, concerning management techniques, new equipment, food products, packaging, and preparation. KPOT Franchise LLC also conducts training programs and seminars, which may be mandatory for General Managers and other restaurant personnel. Additional on-site training or assistance can be provided at the franchisee's request or if deemed necessary by KPOT Franchise LLC, with the franchisee paying a weekly fee and reimbursing expenses. The franchisor administers a Brand Development Fund for national and regional advertising campaigns. KPOT Franchise LLC may also hold mandatory annual meetings for franchisees to discuss new menu offerings, operational standards, and provide additional training.
Franchise Requirements
Ideal Candidate Profile
KPOT Franchise LLC seeks individuals or entities to operate full-service KPOT Hot Pot & Barbecue restaurants. Franchisees can be individuals, corporations, partnerships, or other legal entities. A General Manager is required for each restaurant and may be the franchisee or another full-time employee. The General Manager must successfully complete KPOT's training program, be certified by KPOT, and be individually acceptable to KPOT, devoting full time and best efforts to the restaurant's supervision and management. While KPOT recommends the franchisee serve as the General Manager, it is not a requirement for daily active involvement if a certified General Manager is in place. Controlling Principals (principal equity owners and executive officers) must personally guarantee performance and adhere to confidentiality and non-competition covenants. Franchisees should be prepared to maintain sufficient working capital and comply with all operational, quality, and appearance standards of the KPOT System.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
limited
Territory Size Requirements
KPOT Franchise LLC's designated territories are defined by geographic radius depending on the location's setting. For restaurants in densely populated, urban areas, the territory is a two-block radius around the restaurant. For suburban locations, the designated territory is a five-mile radius around the restaurant.
Staffing Notes
KPOT Franchise LLC requires franchisees to designate and retain a full-time General Manager who must successfully complete the franchisor's training program and be certified to operate the restaurant. This General Manager must satisfy educational and business criteria, be individually acceptable to KPOT Franchise LLC, and devote full time and best efforts to the supervision and management of the restaurant. While a franchisee is recommended to be the General Manager, it is not required. If the franchisee is not actively involved in daily operations, they remain ultimately responsible. Restaurants must have at least one certified manager on-site while open. The franchisee is responsible for determining the number of additional managers and other employees sufficient to efficiently operate the restaurant in accordance with KPOT Franchise LLC's System. All personnel handling food must be ServSafe certified, and certain managers and employees must complete alcohol awareness training.