The Hot Spot Franchise Cost, Revenue & Review 2026
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 does not disclose unit-level revenue (no Item 19). FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $80K – $155K
- 7th pct Recreation & …
- Avg gross sales
- N/A
- Company-owned only
- Royalty
- 5.0%
- 1st 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 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 $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).
- 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 91% 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%
- 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% of gross sales |
| 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
The Hot Spot did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one The Hot Spot unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
100%
Above the 30–60% band. Verify revenue is per-unit average
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→$1.1M
- Cohort dispersion (min → max)
- Transparency tier
- full
- Categorical assessment of disclosure depth
- 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 166 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 average of 8.8%.
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 averages
How The Hot Spot Compares
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
- 0.0%
- Company-owned
- 3
- Corporate units in the system
- % franchised
- 67%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 6
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 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
- N/A
- limited sample (3 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
- 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)
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 |
| 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?
The Hot Spot does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
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), 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
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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.