When does a Hck Hot Chicken franchisee have to reimburse the franchisor for site review costs?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Franchisor accepts the proposed site it shall notify Franchisee of its acceptance of the site.
Unless waived by Franchisor in whole or in part, upon submitting a fourth or subsequent Site Review Request to Franchisor for review, Franchisee shall reimburse Franchisor for all costs and expenses of Franchisor incurred in reviewing the Site Review Requests, including payment to consultants and agents retained by Franchisor to assist in conducting such review and including a reasonable allocation of overhead and administrative expenses.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, a franchisee must reimburse Hck Hot Chicken for site review costs under specific circumstances. If a franchisee submits a fourth or subsequent Site Review Request, they are responsible for reimbursing Hck Hot Chicken for all associated costs and expenses. This reimbursement covers Hck Hot Chicken's expenses for reviewing the requests, including payments to consultants and agents involved in the review process. It also includes a reasonable allocation of overhead and administrative expenses incurred by Hck Hot Chicken.
This policy means that franchisees should carefully consider their site selections before submitting them for review. The initial three site reviews are included in the franchise agreement without additional reimbursement costs. However, after the third submission, the franchisee becomes financially responsible for the review expenses, which can include fees for consultants and administrative overhead. This encourages franchisees to perform thorough due diligence and present well-researched site options to avoid incurring these extra costs.
The reimbursement requirement is not triggered for the first three site review requests, providing some flexibility for franchisees in the initial stages of site selection. However, franchisees should be aware that the costs for subsequent reviews can add up, potentially impacting their initial investment. Franchisees should communicate closely with Hck Hot Chicken during the site selection process to ensure they understand the criteria and minimize the need for multiple submissions. This proactive approach can help manage costs and streamline the site selection process.
Franchisees should budget accordingly and factor in potential site review costs, especially if they anticipate needing to submit multiple locations for approval. Understanding this reimbursement policy is crucial for managing expenses and maintaining a positive relationship with Hck Hot Chicken during the establishment phase of the franchise.