Tapville Social Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$147,750 - $2,081,000
Franchise Fee
$19,500
Total US Locations
25
Business Summary
Tapville Social operates an innovative self-pour beer taproom and self-service restaurant, kiosk, or mobile unit. These businesses offer craft beer, wine, cider, and cocktails, as well as various other beverage and food offerings.
Corporate History
Tapville Social was originally formed as TAPVILLE STATION FRANCHISING, LLC, an Illinois limited liability company, on December 6, 2018. It began offering franchises in February 2019. In June 2020, the company converted to a Delaware corporation and changed its name to TAPVILLE FRANCHISING INC. The company operates under the trade name Tapville Social and has consistently focused on this line of business. An affiliated entity, Craft & Q, which is wholly owned by Tapville Social's CEO, has operated a similar business since October 2017.
Financial Overview
Investment Range
$147,750 - $2,081,000
Franchise Fee (Low)
$19,500
Franchise Fee (High)
$44,500
Royalty %
6%
Marketing %
1.5%
Equipment Costs (Low)
$545,000
Equipment Costs (High)
$1,720,000
Working Capital
$7,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Going concern qualification
Financial Health Notes
The franchisor, Tapville Social, has incurred losses and negative cash flows from operations since its inception and expects this trend to continue. The company's ability to continue operating normally (as a "going concern") depends on its ability to generate enough cash from its business and secure additional financing if necessary. Although Tapville Social's management believes they can meet their obligations for at least the next year, they cannot guarantee their plans will be successful. This financial condition raises questions about Tapville Social's ability to provide franchisees with full services and support.
Financing Details
Tapville Social does not offer any direct or indirect financing to its franchisees. Additionally, Tapville Social does not guarantee any franchisee's notes, leases, or obligations.
Performance Metrics
Total US Locations
25
Franchised Units
22
Corporate Units
3
Avg Square Footage
5,000
Franchising Since
2019
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Tapville Social has had two legal issues. In November 2021, Tapville Social entered into a Consent Order with the California Department of Financial Protection and Innovation. This was because the CPA who audited their financial statements was not properly licensed, leading to findings of material fact omission and untrue statements. Tapville Social agreed to stop violating the California Franchise Investment Law, pay a $5,000 penalty, and amend their franchise registration. More recently, on June 17, 2024, Tapville Social entered a consent order with the Maryland Securities Commissioner. This order addressed Tapville Social entering into an area development agreement in Maryland before being registered to sell franchises there. Tapville Social agreed to stop violating Maryland Franchise Law, pay a $500 penalty, offer rescission to the area developer, and pursue their Maryland registration diligently.
Bankruptcy History
Tapville Social has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Tapville Social franchise agreement, franchisees must have fully complied with all provisions of their existing agreement, made necessary capital expenditures to keep their business uniform with the current system standards, and paid all monetary obligations owed to Tapville Social or its affiliates. Franchisees must not be in default of any agreement with Tapville Social, provide timely written notice of their intent to renew, and sign a new franchise agreement which may have different terms. They also need to meet current franchisee qualifications, agree to any new training requirements, sign a general release of claims against Tapville Social, and pay a renewal fee equal to 20% of the initial franchise fee they paid when they first signed the agreement.
Training & Support Program
Franchisor Assistance
Tapville Social provides comprehensive support to its franchisees. Before opening, franchisees receive an initial training program and guidance to help establish their business. They also get access to an e-learning platform and the Operations Manual, along with assistance in setting product prices. After opening, Tapville Social offers ongoing advice on various business matters such as sales, operations, accounting, and marketing strategies, and provides updates to the Operations Manual. Franchisees are required to dedicate 1.5% of their gross sales to local advertising (with materials subject to franchisor approval) and a specific amount for grand opening advertising. Tapville Social controls all internet marketing, but may provide franchisees with a page on its website. Franchisees must acquire specific computer hardware and software and pay a monthly technology fee for system maintenance, including self-service and self-pour licensing and a guest mobile app. Tapville Social provides site selection guidelines and must approve the chosen location, with franchisees responsible for securing their lease. Initial training for up to four people is provided at Tapville Social's headquarters or a designated training center, with franchisees covering travel and living costs. On-site opening assistance is also provided for about a week around the grand opening. Ongoing refresher training programs may be required annually, also at the franchisee's expense.
Initial Training Hours
133
Training Location
Initial training is primarily conducted at Tapville Social's headquarters in Oakbrook, Illinois, and at designated training centers, which include the Naperville, Illinois restaurant or the Rosemont, Illinois kiosk. Mobile unit training may also include virtual sessions.
Ongoing Support
Tapville Social provides ongoing guidance and advice to its franchisees via telephone and electronic correspondence on various business aspects, including sales, operations, accounting, and marketing. They also offer ongoing training programs and seminars, which franchisees and their staff may be required to attend at their own expense, up to two in-person sessions or four total days per year. Tapville Social supplies updates and modifications to the Operations Manual. Furthermore, representatives from Tapville Social may conduct periodic, announced or unannounced, on-site visits to franchisees' businesses for consultation, assistance, and guidance.
Franchise Requirements
Ideal Candidate Profile
Tapville Social seeks franchisees who have sufficient financial resources, industry experience, and general business experience. Candidates should also demonstrate strong marketing and sales planning capabilities. While franchisees are not required to be full-time, day-to-day owner-operators, they must ensure an approved manager, who has completed Tapville Social's training program, supervises the business. For area developers, individuals must also be of good moral character and possess adequate experience and skills to locate, obtain, and develop prime locations according to the development schedule.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
Tapville Social territories are defined as the lesser of a 3-mile radius from the franchised business or a land area with a population of 50,000 people. Tapville Social retains the right to determine the exact boundaries on a case-by-case basis, considering factors like population base, demographics, traffic patterns, and local competition. For area developers, the Development Area is determined using similar criteria to support the intended number of businesses, typically covering a portion of a city, county, or designated market area.
Staffing Notes
Tapville Social franchisees are not required to be the full-time, day-to-day owner-operator of their business. If a franchisee chooses not to operate the business personally, they must hire and retain a full-time, on-site manager or operator. Tapville Social reserves the right to approve or reject any proposed manager, and any approved manager must satisfactorily complete Tapville Social's initial training program before the business opens. Franchisees are responsible for compensating their managers and are solely liable for any disputes related to them. Tapville Social also provides on-site training and assistance for newly hired staff for up to one week before and immediately after the grand opening. Franchisees must keep Tapville Social informed of their manager's identity and any replacement managers must be approved and may be required to undergo training at the franchisee's expense.