The Hot Spot Franchise Cost, Revenue & Review 2026
- Investment
- $80K – $155K
- Disclosed sales
- partial, no system average
- SBA charge-off
- Under 10 loans (3)
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
The Hot Spot is a creative studio franchise offering paint-your-own pottery, canvas painting, candle making, and craft experiences. Franchisees run the studios, managing sessions, supplies, parties, and retail.
FranchiseVerdict summary · 2026
A The Hot Spot franchise requires a total initial investment of $80K – $155K, including a $40K franchise fee and an ongoing 5.0% royalty[2]. The 2025 FDD on file does not yield a unit-revenue figure we can publish. FranchiseVerdict grade: B (Above 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: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: partial✓ 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
- $80K – $155K
- 6th pct Recreation & …
- Avg gross sales
- N/A
- Company-owned only
- Royalty
- 5.0%
- 2nd pct Recreation & …
- Units
- 9
- 24th pct Recreation & …
- SBA charge-off
- N/A
Quick verdict · Recreation & Entertainment · color = vs category peers
Green = favorable by >10% vs Recreation & Entertainment 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 $80K – $155K including a $40K franchise fee, 5.0% ongoing royalty.
- RETURNSItem 19 reports gross and net figures rather than annual gross sales, so unit revenue is not directly comparable.
- RISKVerdict B (Above average), verdict score 54/100 (higher is better).
- GROWTHPositive: net +6 franchised outlets in the latest year (6 opened, 0 closed) (Item 20).
- DATAItem 19 reports gross and net figures rather than annual gross sales, so unit revenue is not directly comparable. Ask franchisees directly for full unit-level revenue.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- The Hot Spot Studios LLC
- CEO title
- CEO
- Olivia Parsons Franks
- Incorporated in
- NV
- HQ
- 1180 Scheels Drive, # 107, Sparks, Nevada 89434
- Auditor
- Kezos & Dunlavy
- Audited financials
- Franchisor revenue
- $196K
- vs $35K prior year
Overview
About
- CEO
- Olivia Parsons Franks
- Headquarters
- NV
- Founded
- 2023
- FDD year
- 2025
- States available
- 3
Can you afford it, and what does the money buy?
Entry cost runs 79% below the typical recreation & entertainment franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown17 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $40K | $40K | |
| Training Expenses | $2K | $4K | |
| Website Development | $1K | $1K | |
| Premises deposit | $2K | $9K | |
| Utilities deposits | $200 | $500 | |
| Rent - three months | $6K | $24K | |
| Design and Architect Fees | $0 | $3K | |
| Leasehold Improvements, Construction and/or Remodeling | $0 | $15K | |
| Furniture, Fixtures, & Equipment | $8K | $18K | |
| Exterior Signage | $2K | $6K | |
| Business Licenses and Permits | $100 | $500 | |
| Computer Systems | $1K | $2K | |
| Initial Inventory to Begin Operating | $6K | $12K | |
| Professional Fees | $2K | $4K | |
| Initial Launch Marketing & Grand Opening Advertising | $2K | $3K | |
| Insurance | $600 | $2K | |
| Operating Expenses / Additional Funds - three months | $8K | $12K | |
| Total initial investment | $80K | $155K |
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
- $80K – $155K
- Top 40% of category vs category
- Liquid capital req'd
- $8K – $12K
- Top 40% of category vs category
- Franchise fee
- $40K – $40K
- Top 40% of category vs category
- Royalty
- 5.0%
- Set by a formula · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 6.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 1.0% |
| Technology fee | $150 |
| Transfer fee | $13K |
| Renewal fee | $4K |
| Inventory (initial) | $6K – $12K |
| Total fee load | 6.0% of rev |
What do units actually make?
Source: FDD 2025 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for The Hot Spot is on file. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one The Hot Spot 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 annual revenue, 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.
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: 2025 FDD
Financial Performance
Company-owned outlets only - not franchisee performance
- Item 19 type
- gross and net figures
- Sample size
- 3
- vs category median 5
- Range (low → high)
- $76K→$1.1MNot cited — published from our reading of the franchisor's disclosure document; the page it is printed on has not been located.
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 7 / 10
- vs category median 4 / 10 · above
Compared against 165 Recreation & Entertainment brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 6.0% — below the Recreation & Entertainment median of 8.0%.
Disclosure
Item 19 reports gross and net figures rather than annual gross sales, so unit revenue is not directly comparable.
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 Recreation & Entertainment medians
How The Hot Spot Compares
Category median of published Recreation & Entertainment 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 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 9
- Opened
- 6
- 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
- 3
- Corporate units in the system
- % franchised
- 67%
- vs corporate-owned
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 3 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
3
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 3 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 3
- Loan volume
- $436K
- Median loan
- $145K
- average
- Charge-off rate
- Under 10 loans (3)
- Insufficient SBA coverage: 3 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (3)
- 5-yr charge-off
- Under 10 loans (3)
- Loans approved 2021+
- Active lenders
- 0
- 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
A micro-franchise system with unverified growth, unclear unit economics variance, and limited operational proof points that requires intensive validation of franchisee profitability claims.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
Item 3 states no litigation is required to be disclosed.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Kezos & Dunlavy
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
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
Score breakdown · what drove the 54 / 100 verdict
- 01MEDOnly 9 units systemwide indicates extremely small, unproven franchise system with limited scale and operational support infrastructure
- 02MEDNo disclosed unit growth trajectory despite 5-year track record raises questions about expansion viability and franchisee satisfaction
- 03MINORHigh royalty burden (5% biweekly) combined with $39,500 franchise fee structure may compress margins for lower-performing locations
- 04MINORSignificant variance between average revenue ($551k) and average net income ($124.9k) suggests 22.7% net margin may not be achievable across all unit types or locations
- 05MINORHigh initial investment range ($80.1k-$154.7k) relative to unit count suggests uneven performance or territory-dependent profitability concerns
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 5 |
| Territory type | Exclusive territory |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory population | 200,000 |
| Online sales rights | Restricted |
| Franchisor can compete | No |
| 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 | 15 days |
| Transfer requires consent | Yes |
| Termination notice | 5 days |
| Mandatory arbitration | Yes |
| Arbitration location | Reno, Nevada |
| Jury trial waiver | Yes |
| Governing law | NV |
| Litigation count | 0 |
View Item 3 litigation summary
Item 3 states no litigation is required to be disclosed.
Items 10, 11
Training & Operations
- Classroom training
- 24 hrs
- On-the-job training
- 28 hrs
- Training location
- Reno, Nevada
- Ongoing training
- Required
- Time to open
- 6 mo
- From signing to launch
- Site selection
- franchisor
- POS system
- Square
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Square
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a The Hot Spot franchise?
The total investment to open a The Hot Spot franchise ranges from $80K – $155K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do The Hot Spot franchise owners earn?
Item 19 of the The Hot Spot FDD discloses outlet figures from $76K to $1.1M but no single average across all outlets. These are gross sales figures, not profit; the Revenue section shows what the filing reports and on what basis. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns The Hot Spot?
The Hot Spot is franchised by The Hot Spot Studios LLC. Source: FDD Item 1, 2025 filing.
What is Item 19 in the The Hot Spot 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 The Hot Spot FDD and qualifies whose outlets they describe.
What is The Hot Spot's franchise failure rate?
SBA 7(a) loan charge-off data is not available for The Hot Spot (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 The Hot Spot franchise locations are there?
As of their most recent FDD filing, The Hot Spot has 9 total units in the United States, including 6 franchised units and 3 company-owned units. 6 new units were opened in the latest reporting year.
Is The Hot Spot a good franchise to buy?
FranchiseVerdict rates The Hot Spot as a B-grade franchise with a verdict score of 54 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.