HootersFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Hooters franchise requires a total initial investment of $1.3M – $4.1M, including a $75K franchise fee and an ongoing 5.0% royalty[2]. Per the 2023 FDD, average unit revenue was $3.6M[2]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2023 FDD issuance
Overview
- Investment
- $1.3M – $4.1M
- 45th pct Service Resta…
- Avg gross sales
- $3.6M
- 27th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 297
- 46th pct Service Resta…
- SBA default
- 50.0%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
41% cash-on-cash return (based on Gross Margin). Above the 20% threshold most investors target.
Bottom line
- Total investment $1.3M – $4.1M including a $75K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $3.6M/year (median $3.4M), with an estimated 41% cash-on-cash return (based on Gross Margin). Note: this is gross profit, not take-home income.
- Verdict B (Above Average) with a risk score of 55/100.
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- HOA Franchising, LLC
- Parent company
- Hawk Parent, LLC
- Incorporated in
- DE
- HQ
- 1815 The Exchange, Atlanta, Georgia 30339
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $487K
- vs $488K prior year
Affiliated brands
- HI Limited Partnership
- Hoots Restaurant Holder
Other brands the franchisor or its parent operates (Item 1).
Overview
About
Franchisees operate casual dining restaurants featuring American wings and seafood cuisine with iconic branded atmosphere. Day-to-day operations include managing full-service dining staff, kitchen operations, inventory control, marketing, and maintaining brand standards across food quality, service, and facility appearance in a declining 297-unit system.
- CEO
- Sal Melilli
- Headquarters
- GA
- Founded
- 2014
- FDD year
- 2023
- States available
- 21
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 | $3.9M |
| Total initial investment | $1.3M | $4.1M |
Source: Hooters 2023 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
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
$393K
11.0% margin
Unlevered ROIC
14%
EBITDA / total invested capital
Payback
7.0 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.3M – $4.1M
- Near category avg vs category
- Liquid capital req'd
- $40K – $135K
- Better than avg vs category
- Franchise fee
- $75K – $75K
- Near category avg vs category
- Royalty
- 5.0%
- Gross Sales · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
- Payback period
- 2.5 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Transfer fee | $25K |
| Renewal fee | $25K |
| Total fee load | 7.0% of rev |
Financial Performance
- Avg gross sales
- $3.6M
- Per unit, per year
- Median gross sales
- $3.4M
- Avg gross margin
- $1.1M
- Reported as Gross Margin in FDD Item 19
- Cash-on-cash
- 40.8%
- Based on Gross Margin / investment midpoint
- Item 19 type
- gross_sales
- Sample size
- 102 units
- vs category median 13 · large
- Range (low → high)
- $1.2M→$8.1M
- Cohort dispersion (min → max)
- Quartile band
- $1.9M→$5.7M
- Bottom 25% → top 25%
- Transparency
- 7 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Hooters Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 297
- Opened
- 0
- Last reporting year
- Closed
- 2
- Turnover rate
- 0.7%
- Company-owned
- 196
- Corporate units in the system
- % franchised
- 34%
- vs corporate-owned
- Net growth (yr3)
- -3.8%
- Net unit change last year
- 3-yr CAGR
- -8.2%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 13
- Terminated (3yr)
- 2
- Non-renewed (3yr)
- 2
- Transfers (3yr)
- 1
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 2.0%
- Franchisor-initiated terminations
- Ceased ops
- 6.6%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
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
- 50.0%
- rates vary by category · see methodology
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
- 3
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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)
3 case reference(s): 0 pending, 5 settled.
Largest disclosed settlement: $181,725
Bankruptcy (Item 4)
Disclosed in last 7 years
Bankruptcy Code; (b) obtained a discharge of its debts under the bankruptcy code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
Score breakdown · what drove the 55 / 100 rating
- 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
- 03MINORNo Item 19 (Net Income) disclosure prevents accurate ROI assessment despite $1.26M-$4.1M investment requirement
- 04HIGHGoing Concern status is FALSE, indicating potential financial viability concerns at corporate level
- 05MINORHigh investment range ($1.26M-$4.1M) combined with declining units suggests poor unit economics or market saturation
- 06HIGHLitigation pattern includes franchise failures (unauthorized abandonment) indicating franchisee distress
- 07MED5% 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Map-based/Zip-code based |
| Protected territory | Yes |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 10 days |
| Curable defaultsℹ | 6 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Georgia |
| Litigation count | 9 |
View Item 3 litigation summary
3 case reference(s): 0 pending, 5 settled.
Items 10, 11
Training & Operations
- Classroom training
- 8 hrs
- On-the-job training
- 311 hrs
- Training location
- On-site and corporate
- POS system
- NCR’s Aloha
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: NCR’s Aloha
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 – $4.1M, 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 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 B-grade franchise with a risk score of 55 out of 100, 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.
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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.