Do the financial statements for Hawaiian Bros Island Grill include notes to the financial statements?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 1 Nature of Operations
Hawaiian Bros Franchising, LLC (the Company) is a Missouri limited liability company (LLC) formed on February 9, 2022, and is a wholly owned subsidiary of Hawaiian Bros, Inc. (the Member). There were no operations until the Company received initial funding from the Member on September 16, 2022. The Company operates as a franchisor of quick service restaurant establishments offering the "Hawaiian Bros" concept as developed by the Member. The "Hawaiian Bros" concept consists of offering customers a traditional Hawaiian plate lunch in a modern Hawaiian-themed atmosphere. Restaurants also offer side dishes, desserts, and beverages. The Member owns all intellectual property rights in certain systems, trademarks, service marks, and other intellectual property used in the operation of Hawaiian Bros restaurants (the "Hawaiian Bros IP") and has licensed the Hawaiian Bros IP and other proprietary confidential information to the Company in perpetuity to facilitate the offering, selling, and support of franchises. There is no fee paid to the Member for the license of the Hawaiian Bros IP to the Company.
The Company and its affiliate, HB Payroll LLC, have entered into an employee leasing agreement pursuant to which the Company leases employees that provide franchise support services including but not limited to site selection assistance, construction and design assistance, local promotion guidance, a pre-opening training team, and operational assistance post-opening as needed.
The Company has relied on resources from the Member to support operations and the Member is committed to providing on-going administrative, management, and other support activities. The accompanying financial statements may not be indicative of conditions that would have existed if the Company had been operated as an unaffiliated entity.
The franchise agreements are typically for 15 years and require the purchaser to pay an initial franchise fee for each location to be opened. Once the franchise begins operations, the Company typically charges a royalty and advertising fund fee of up to 6% and generally 3%, respectively, of the franchisee's Gross Sales as defined in the Franchise Disclosure Document. As of December 29, 2024, the Company had sold the rights to develop 167 franchise units under various franchise and development agreements, and there were 35 franchise locations in operation.
NOTE 2 Summary of Significant Accounting Policies
Basis of Presentation
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 77)
What This Means (2025 FDD)
Yes, according to the 2025 Franchise Disclosure Document, the financial statements for Hawaiian Bros Island Grill include notes. Specifically, Note 1 addresses the nature of operations, detailing the company's formation as a Missouri LLC on February 9, 2022, and its function as a wholly-owned subsidiary of Hawaiian Bros, Inc. Note 1 also clarifies that the company began operations after receiving initial funding from the Member (Hawaiian Bros, Inc.) on September 16, 2022. It describes Hawaiian Bros Island Grill's concept as offering traditional Hawaiian plate lunches in a modern, Hawaiian-themed setting, including side dishes, desserts, and beverages. The note also mentions the licensing of intellectual property from the Member to the Company.
Note 1 further explains the agreement between the Company and its affiliate, HB Payroll LLC, for employee leasing to provide franchise support services such as site selection, construction and design assistance, local promotion guidance, pre-opening training, and post-opening operational assistance. It also states that the Company has relied on resources from the Member to support operations and the Member is committed to providing ongoing support activities. The note cautions that the financial statements may not be indicative of conditions if the Company operated as an unaffiliated entity.
Note 1 also mentions that franchise agreements are typically for 15 years and require an initial franchise fee for each location. The company typically charges a royalty and advertising fund fee of up to 6% and generally 3%, respectively, of the franchisee's Gross Sales. As of December 29, 2024, the Company had sold the rights to develop 167 franchise units under various franchise and development agreements, and there were 35 franchise locations in operation. Note 2 provides a summary of significant accounting policies and the basis of presentation for the financial statements.