Pelicana Chicken Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$293,000 - $630,000
Franchise Fee
$35,000
Min Cash Required
$10,000
Total US Locations
11
Business Summary
Pelicana Restaurants specialize in offering franchises for the operation of Pelicana Restaurants. These restaurants sell Korean-style fried chicken and other related food products and services. Pelicana Restaurants are typically located in strip shopping centers, shopping malls, and free-standing units, operating under the Pelicana brand name and system.
Corporate History
Pelicana Franchise, LLC was formed in California on January 12, 2022. The company assumed all rights and obligations related to the Pelicana franchise from its affiliate, Pelicana F&B Management, Inc., in March 2022. Pelicana F&B Management, Inc. had initially offered Pelicana franchises for sale from May 2019 to March 2022, serving as a master franchisee for the West Coast region of the United States under Pelicana Co., Ltd., a South Korea corporation. Pelicana Franchise, LLC operates under its brand name 'Pelicana' and its corporate name 'Pelicana Franchise'.
Financial Overview
Investment Range
$293,000 - $630,000
Franchise Fee (Low)
$35,000
Franchise Fee (High)
$35,000
Minimum Cash Required
$10,000
Royalty %
4%
Marketing %
1%
Equipment Costs (Low)
$180,000
Equipment Costs (High)
$440,000
Working Capital
$20,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Pelicana Franchise, LLC's financial health appears strong, showing positive working capital in both 2022 ($731,237) and 2023 ($882,230). The company reported net income of $58,820 in 2022 and $76,771 in 2023. The independent auditors' reports for both years state an unqualified opinion, indicating that the financial statements are presented fairly and do not raise any substantial doubt about Pelicana Franchise, LLC's ability to continue as a going concern.
Financing Details
Pelicana Franchise, LLC does not offer any direct or indirect financing to its franchisees. Additionally, the franchisor does not guarantee any franchisee notes, leases, or other obligations.
Performance Metrics
Total US Locations
11
Franchised Units
9
Corporate Units
2
Avg Square Footage
1,550
Franchising Since
2019
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Pelicana Franchise, LLC's affiliate, Pelicana F&B, was involved in one legal matter. On August 5, 2021, Pelicana F&B entered into a Consent Order with the State of Washington's Department of Financial Institutions, Securities Division. The allegations stated that in 2020, Pelicana F&B offered and sold a franchise to a Washington resident without the necessary permit and misrepresented financial performance information in its disclosure document. Pelicana F&B, without admitting or denying the findings, agreed to cease and desist from further violations, pay $2,200 in investigative costs, and waive its right to a hearing.
Bankruptcy History
Pelicana Franchise, LLC has no bankruptcy history to disclose.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their Pelicana Franchise, LLC agreement, franchisees must meet several conditions. They must ensure their current agreement and lease are not terminated and are renewable, and they must have substantially complied with all terms of their agreements. Franchisees need to provide notice of their intent to renew 12 to 18 months before the current term expires. They are also required to make any necessary improvements or repairs to their restaurant as specified by Pelicana Franchise, LLC, and satisfy all outstanding monetary obligations to the franchisor and its affiliates. Upon renewal, franchisees must sign Pelicana Franchise, LLC's then-current franchise agreement, which may include different terms, potentially with higher royalty and advertising fees. Additionally, a general release of claims against Pelicana Franchise, LLC and its affiliates must be executed, and franchisees must meet the franchisor's current qualification and training requirements, along with paying a $20,000 renewal fee.
Training & Support Program
Franchisor Assistance
Pelicana Franchise, LLC provides extensive support to its franchisees. Before opening, the franchisor assists with site selection, purchasing equipment, signs, fixtures, and initial inventory. They furnish mandatory and suggested specifications and layouts for the restaurant, including design services and renderings, and provide initial training. During the grand opening, Pelicana Franchise, LLC offers assistance and guidance. After opening, ongoing support includes advice on operating issues, system standards, new menu items, purchasing, advertising, employee training, and administrative procedures. The franchisor conducts periodic inspections, administers the marketing fund, offers advanced and refresher training, and updates the Confidential Operations Manuals. Telephone consultations are also available Monday through Friday during business hours.
Initial Training Hours
40
Training Location
Corporate restaurant in Buena Park, California, or another designated location
Ongoing Support
After opening, Pelicana Franchise, LLC offers continuous guidance and advice on operating issues and system standards. This includes information on new menu items, food preparation, purchasing requirements, advertising, employee training, and administrative procedures. Pelicana Franchise, LLC conducts regular inspections of the restaurants and provides ongoing training programs, including advanced and refresher courses for managers. The franchisor also updates its Operations Manuals as needed and administers the marketing fund. Franchisees can receive telephone consultations from Monday to Friday, 10:00 a.m. to 6:00 p.m. Pacific Time.
Franchise Requirements
Ideal Candidate Profile
The ideal Pelicana Restaurant franchisee is a person who is willing to undertake the necessary investment and effort to establish and develop a Pelicana Restaurant. They need to be a hands-on operator, committing full-time (at least 40 hours per week) to supervising all administrative and operational activities of their restaurant. If the franchisee is a business entity, a designated Operating Principal with at least 10% ownership and decision-making authority must fulfill this full-time, hands-on role. Pelicana Restaurant franchisees are responsible for hiring and training their employees and maintaining high moral and ethical standards in their operations. The success of the venture is highly dependent on the franchisee's business abilities and efforts.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Non-Exclusive
Territory Size Requirements
Pelicana Franchise, LLC defines a non-exclusive territory as a radius around the franchisee's restaurant. The exact size of this radius varies based on factors such as whether the restaurant is in an urban, suburban, or rural setting. Pelicana Franchise, LLC considers population size, ethnic makeup, persons per household, income level, residential/commercial mix, population age, traffic patterns, parking, access issues, neighboring businesses, rent and leasing terms, and the physical characteristics of the premises when determining the specific boundaries.
Staffing Notes
Pelicana Franchise, LLC requires franchisees to staff their restaurants with at least one full-time Approved Manager who has completed the franchisor's manager training program. This Approved Manager, who may be the franchisee or an Operating Principal, must devote full-time attention to the business. Pelicana Franchise, LLC may require additional Approved Managers based on the restaurant's size, location, and performance. Franchisees are solely responsible for hiring, training, compensating, and supervising all their employees, ensuring they wear System uniforms. Employees must also sign confidentiality agreements. Pelicana Franchise, LLC emphasizes that it is not a joint employer of franchisee staff and requires franchisees to assist in defending against any such claims.