Hooters Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Hooters is a casual-dining sports-bar franchise known for its chicken wings, seafood, burgers, beer, and Hooters Girls service. Franchisees run full-service restaurants managing kitchen, bar, and a large service staff.
FranchiseVerdict summary · 2026
A Hooters franchise requires a total initial investment of $1.3M – $4.7M, including a $75K franchise fee and an ongoing 6.0% royalty[2]. Per the 2023 FDD, average unit revenue was $3.6M[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2023 FDD issuance
Overview
- Investment
- $1.3M – $4.7M
- 35th pct Service Resta…
- Avg gross sales
- $3.6M
- 14th pct Service Resta…
- Royalty
- 6.0%
- 24th pct Service Resta…
- Units
- 297
- 35th 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 avg · 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 $1.3M – $4.7M including a $75K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $3.6M/year (median $3.4M), with an estimated 20% cash-on-cash return (based on GROSS MARGIN (Note 5)). Note: this is gross profit, not take-home income.
- RISKVerdict A (Strongest tier), verdict score 66/100 (higher is better).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- HOA Future Franchising, LLC
- Parent company
- HOA Franchise HoldCo, LLC
- Ultimate parent
- HOA NewCo LLC
- Predecessor
- HOA Franchising, LLC
- Prior franchisor entity
- CEO title
- Chief Executive Officer of Brand Management
- Neil Kiefer
- Incorporated in
- Delaware
- HQ
- 107 Hampton Road, Suite 200, Clearwater, Florida 33759
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $488.0M
- vs $486.6M prior year
Affiliated brands
- HI Limited Partnership
- Hoots Restaurant Holder
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Neil Kiefer
- Headquarters
- Florida
- Founded
- 2025
- FDD year
- 2023
- States available
- 21
Can you afford it, and what does the money buy?
Entry cost runs 155% above the typical full-service restaurants franchise.
Source: FDD 2023 · Items 5–7
FDD Item 7 · 2023 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $75K | $75K |
| Working capital (3–6 mo) | $40K | $135K |
| Equipment, build-out, other | $1.1M | $4.5M |
| Total initial investment | $1.3M | $4.7M |
Source: Hooters 2023 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.3M – $4.7M
- Top 40% of category vs category
- Liquid capital req'd
- $40K – $135K
- Top 40% of category vs category
- Franchise fee
- $75K – $75K
- Top 40% of category vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
- Payback period
- 5.0 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Training fee | $15K |
| Transfer fee | $25K |
| Renewal fee | $25K |
| Inventory (initial) | $25K – $95K |
| Total fee load | 7.0% of rev |
What do units actually make?
Average unit sales run 105% above the full-service restaurants norm.
Source: FDD 2023 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$358K
10.0% margin
Unlevered ROIC
12%
EBITDA / total invested capital
Payback
8.6 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
FDD-reported earnings vs. model
The FDD reports $1.1M as GROSS MARGIN (Note 5). Our model estimates $358K SLEBITDA from the same revenue using category-average cost assumptions. These numbers differ because GROSS MARGIN (Note 5) deducts different expense categories than our model.
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. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Hooters unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
12%
Below the 30–60% attractive-franchise band
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%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Hooters units return on equity?
Equity IRR · 5-yr
45.6%
6.55× MOIC
Year-1 DSCR
1.96×
EBITDA ÷ debt service
Equity required
$2.5M
on $10.7M purchase
Total debt
$8.2M
SBA $5.0M + senior + seller note
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
- Avg gross sales
- $3.6M
- Per unit, per year
- Median gross sales
- $3.4M
- Avg gross margin (note 5)
- $1.1M
- Reported as GROSS MARGIN (Note 5) in FDD Item 19
- Cash-on-cash
- 20.2%
- Based on GROSS MARGIN (Note 5) / investment midpoint
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 by Quartile (franchised) + Prime Cost Data (company-owned)
- Sample size
- 102 outlets
- vs category median 18 · large
- Range (low → high)
- $1.2M→$8.1M
- Cohort dispersion (min → max)
- Quartile band
- $1.9M→$5.7M
- Bottom 25% → top 25%
- Reporting year
- 2022
- Fiscal year the figures cover
- Source filing
- FDD 2023
- Disclosed in the 2023 filing, covering 2022
- Transparency
- 7 / 10
- vs category median 3 / 10 · above
Compared against 805 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 $3.6M/year in gross sales. Revenue-to-investment ratio: 1.2x.
Fee burden
Total ongoing fee load of 7.0% (near the Full-Service Restaurants average).
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
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 averages
How Hooters Compares
Is the system healthy?
Source: FDD 2023 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 297
- Opened
- 0
- Last reporting year
- Closed
- 1
- Terminated
- 3
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.0%
- Company-owned
- 196
- Corporate units in the system
- % franchised
- 61%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 26
- Closed (3yr)
- 1
- Terminated (3yr)
- 3
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 2.0%
- Franchisor-initiated terminations
- Ceased ops
- 6.6%
- Units that stopped operating
Last reporting year only, multi-year history not disclosed in this brand's FDD.
Item 20 · 35 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 6 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 6
- Loan volume
- $2.4M
- Median loan
- $394K
- average
- Charge-off rate
- N/A
- limited sample (6 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 4
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
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
Hooters presents high risk due to declining unit count, extensive litigation history, undisclosed profitability metrics, and corporate going concern issues that obscure true investment returns.
Litigation (Item 3)
Franchisor itself has no pending or concluded litigation. Predecessor/affiliate litigation: (1) HOA Franchising, LLC v. MS Foods, LLC and Mahmood Saifie (N.D. Ga., filed 2023) for breach of contract/trademark infringement after a terminated franchisee continued operating; case administratively closed due to Predecessor's 2025 bankruptcy. (2) Owl's Eyes entities v. Hooters of America, LLC (Cobb County, GA Superior Court, filed 2011) alleging wrongful termination; settled in 2018 for $190,000 with no admission of liability.
Largest disclosed settlement: $190,000
Bankruptcy (Item 4)
Disclosed in last 7 years
Predecessor (HOA Franchising, LLC) and numerous affiliates filed voluntary Chapter 11 bankruptcy petitions on March 31, 2025 in the U.S. Bankruptcy Court for the Northern District of Texas (lead case In re Hooters of America, LLC et al., Case No. 25-80078). A restructuring/sale plan was approved October 30, 2025 and became effective October 31, 2025, resulting in sale of some restaurants to Hoot Owl and Hooters, Inc., closure of remaining company-owned restaurants, brand management transferred to Hooters Brand Management, LLC, and discharge of debtor debts. Officer Sal Melilli was an officer of Predecessor/affiliates at time of filing.
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 66 / 100 verdict
- 01MINORDeclining unit count (-3.8% YoY) indicates system contraction and market challenges
- 02HIGHMultiple litigation cases involving breach of contract, abandonment, and financial obligation failures suggest operational and legal instability
- 03HIGHGoing Concern status is FALSE, indicating potential financial viability concerns at corporate level
- 04HIGHLitigation pattern includes franchise failures (unauthorized abandonment) indicating franchisee distress
- 05MED5% royalty on average $3.57M revenue ($178.75K annually) is sustainable only if net margins are healthy—which are undisclosed
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.0% 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 | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Termination groundsℹ | 18 |
| Curable defaultsℹ | 12 |
| Mandatory arbitration | No |
| Arbitration location | Georgia |
| Jury trial waiver | No |
| Governing law | Florida |
| Litigation count | 2 |
View Item 3 litigation summary
Franchisor itself has no pending or concluded litigation. Predecessor/affiliate litigation: (1) HOA Franchising, LLC v. MS Foods, LLC and Mahmood Saifie (N.D. Ga., filed 2023) for breach of contract/trademark infringement after a terminated franchisee continued operating; case administratively closed due to Predecessor's 2025 bankruptcy. (2) Owl's Eyes entities v. Hooters of America, LLC (Cobb County, GA Superior Court, filed 2011) alleging wrongful termination; settled in 2018 for $190,000 with no admission of liability.
Items 10, 11
Training & Operations
- Classroom training
- 20 hrs
- On-the-job training
- 314 hrs
- Training location
- Clearwater, Florida (or location closer to franchisee); On-site opening training at franchisee's Restaurant
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- franchisee (subject to franchisor acceptance within a designated Site Selection Area, generally zip codes)
- Franchisor financing
- Not offered
- Item 10
- POS system
- OLO (order management), integrated Technology System / POS System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: OLO (order management), integrated Technology System / POS System
Item 20 · call current owners
Franchisee Contacts
296 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Hooters · FDD (2023) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Hooters franchise?
The total investment to open a Hooters franchise ranges from $1.3M – $4.7M, with an initial franchise fee of $75K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Hooters franchise owners earn?
According to Item 19 of the Hooters FDD, the average gross sales per unit is $3.6M. The median is $3.4M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Hooters 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 Hooters FDD and qualifies whose outlets they describe.
What is Hooters's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Hooters (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 Hooters franchise locations are there?
As of their most recent FDD filing, Hooters has 297 total units in the United States, including 101 franchised units and 196 company-owned units.
Is Hooters a good franchise to buy?
FranchiseVerdict rates Hooters as a A-grade franchise with a verdict score of 66 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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
Are you the franchisor?
If you represent Hooters, you can request corrections or provide updated information.
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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.