Binghamton HOTS Franchise Cost, Revenue & Review 2026
- Investment
- $142K – $253K
- Disclosed sales
- $702K
- gross sales, not profit
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Binghamton HOTS is a casual restaurant franchise serving burgers, hot dogs, subs, and homemade specials. Franchisees run the restaurants, managing the kitchen, service, and staffing.
FranchiseVerdict summary · 2026
A Binghamton HOTS franchise requires a total initial investment of $142K – $253K, including a $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2023 FDD, average unit revenue was $702K[2]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: high - issued more than two years ago
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored5 of 6 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $142K – $253K
- 5th pct Service Resta…
- Avg gross sales
- $702K
- Company-owned only1 outlet
- Royalty
- 5.0%
- 8th pct Service Resta…
- Units
- 1
- 1st pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $142K – $253K including a $25K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $702K/year (company-owned outlets only - not franchisee performance).
- RISKVerdict C (Average), verdict score 39/100 (higher is better).
- GROWTHFlat: no net change in franchised outlets in the latest year (0 opened, 0 closed) (Item 20).
- FLAGRevenue data based on only 1 outlet. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Hots Franchise Group, Inc.
- Ultimate parent
- D. Whalen Holdings, LLC
- FDD Item 1, page 7 of the 2023 FDD
- CEO title
- President & Treasurer
- David Whalen Jr.
- Incorporated in
- NY
- HQ
- 128 Washington Street, Binghamton, New York 13901
- Auditor
- Ernest Skiadas, CPA, P.C.
- Audited financials
Overview
About
- CEO
- David Whalen Jr.
- Headquarters
- NY
- Founded
- 2017
- FDD year
- 2023
- States available
- 0
Can you afford it, and what does the money buy?
Entry cost runs 71% below the typical full-service restaurants franchise.
Source: FDD 2023 · Items 5–7
Full Item 7 breakdown16 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $25K | $25K | |
| Rent - 3 Monthsnot refundable | $5K | $11K | |
| Lease & Utility Security Deposit | $3K | $4K | |
| Design & Architect Feesnot refundable | $3K | $4K | |
| Leasehold Improvementsnot refundable | $30K | $75K | |
| Signagenot refundable | $1K | $4K | |
| Equipment, Furniture and Fixturesnot refundable | $35K | $65K | |
| Point of Sale & Computer Equipmentnot refundable | $4K | $5K | |
| Business Licenses & Permits (Not Including Beer & Wine License)not refundable | $1K | $2K | |
| Professional Feesnot refundable | $3K | $5K | |
| Insurance - 3 Monthsnot refundable | $2K | $2K | |
| Initial Inventorynot refundable | $4K | $6K | |
| Training Expensesnot refundable | $3K | $5K | |
| Grand Opening Marketingnot refundable | $3K | $5K | |
| Technology Fee - 3 Monthsnot refundable | $300 | $300 | |
| Additional Funds - 3 Monthsnot refundable | $20K | $35K | |
| Total initial investment | $142K | $253K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $142K – $253K
- Top 40% of category vs category
- Liquid capital req'd
- $20K – $35K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 0.5%
- typical 3–5%
- Total fee load
- 5.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 0.5% of gross sales |
| Technology fee | $100 |
| Transfer fee | $13K |
| Renewal fee | $6K |
| Inventory (initial) | $4K – $6K |
| Total fee load | 5.5% of rev |
A 5.5% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 56% below the full-service restaurants norm.
Company-owned outlets only - not franchisee performance
Based on a single outlet - not a system average
Source: FDD 2023 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Binghamton HOTS until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$225K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Binghamton HOTS unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2023 FDD
Financial Performance
Company-owned outlets only - not franchisee performance
Based on a single outlet - not a system average
- Avg gross sales
- $702K
- Per unit, per year
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 1 outlet
- vs category median 18 · small
- Reporting year
- 2022
- Fiscal year the figures cover
- Source filing
- FDD 2023
- Disclosed in the 2023 filing, covering 2022
- Transparency
- 5 / 10
- vs category median 3 / 10 · above
Compared against 801 Full-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $702K/year in gross sales. Revenue-to-investment ratio: 3.6x. Company-owned outlets only - not franchisee performance.
Fee burden
Total ongoing fee load of 5.5% — below the Full-Service Restaurants median of 7.0%.
Disclosure
Transparency score 5/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence. Sample size of 1 outlet — treat as directional only.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Full-Service Restaurants medians
How Binghamton HOTS Compares
Category median of published Full-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2023 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1
- Opened
- 0
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- N/A
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 0%
- vs corporate-owned
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 2
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
This is a nascent, financially opaque single-unit franchise system with concerning going concern indicators and no demonstrated scalability or franchisee profitability validation.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
No litigation required to be disclosed in Item 3.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernest Skiadas, CPA, P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Most recent audited financial statements in the FDD exhibit are for FY2021 and FY2020 (the FY2022/2021 audited statements referenced in Item 21 appear in the exhibit as notes only; the full balance sheet and income statement scanned blank). For FY2021, the Statement of Income (Loss) shows no revenue figure on the 'Franchise sales and royalties' line; net loss of $(11,669) equals total operating expenses, indicating revenue was effectively nil. Franchisor (Hots Franchise Group, Inc.) had not yet sold any franchises (0 franchised outlets through 2022).
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 39 / 100 verdict
- 01MINOROnly 1 unit in system — extreme lack of scalability, no franchise network momentum, high risk of system collapse
- 02MEDNet Income not disclosed — inability to verify actual profitability claims; only gross revenue of $701,719 is available
- 03MINORNo growth trajectory data — single unit provides no evidence of system expansion or franchisee success replication
- 04MINORHigh investment range relative to single-unit data — $141,775–$253,075 investment with unverified profitability metrics
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 5.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2023 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Territory population | 30,000 |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 20 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Broome County, New York |
| Jury trial waiver | No |
| Governing law | NY |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed in Item 3.
Items 10, 11
Training & Operations
- Classroom training
- 16 hrs
- On-the-job training
- 40 hrs
- Training location
- Binghamton, New York (2 weeks) and on-site at franchised location (1 week)
- Ongoing training
- Required
- Field support
- 40 hrs/yr
- On-site visits per year
- Time to open
- 4 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Toast POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast POS
Item 20 · call current owners
Franchisee Contacts
3 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Binghamton HOTS franchise?
The total investment to open a Binghamton HOTS franchise ranges from $142K – $253K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Binghamton HOTS franchise owners earn?
According to Item 19 of the Binghamton HOTS FDD, the average gross sales per unit is $702K. Important context: Company-owned outlets only - not franchisee performance; Based on a single outlet - not a system average. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Binghamton HOTS?
Binghamton HOTS is franchised by Hots Franchise Group, Inc.. The ultimate parent named in the FDD is D. Whalen Holdings, LLC. Source: FDD Item 1, 2023 filing.
What is Item 19 in the Binghamton HOTS FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Binghamton HOTS FDD and qualifies whose outlets they describe.
What is Binghamton HOTS's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Binghamton HOTS (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Binghamton HOTS franchise locations are there?
As of their most recent FDD filing, Binghamton HOTS has 1 total units in the United States.
Is Binghamton HOTS a good franchise to buy?
FranchiseVerdict rates Binghamton HOTS as a C-grade franchise with a verdict score of 39 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.