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HoneyBaked Ham Franchise ProfileRetail Franchises > Specialty Retail |
Initial Investment for a HoneyBaked Ham Franchise
To open a HoneyBaked Ham franchise, you’ll need to prepare for an initial investment ranging from $448,600 to $858,900. This includes a franchise fee of $15,000. It's essential to have a net worth between $500,000 and $1,000,000, along with sufficient cash reserves to cover startup costs and operational expenses. Understanding these financial requirements will help you assess your readiness for franchise ownership.
Revenue Potential of HoneyBaked Ham Units
HoneyBaked Ham franchises show promising financial performance, with an average annual revenue per unit of approximately $951,245. The median revenue stands at $880,776, while the revenue can range from as low as $274,646 to as high as $2,764,727. This variability highlights the importance of location and management in maximizing profitability.
Ongoing Fees and Financial Obligations
As a HoneyBaked Ham franchisee, you'll be responsible for ongoing fees, including a royalty fee of 6% of gross sales and a marketing fee of 2%. These fees are crucial for brand support and national marketing efforts. It's vital to factor these costs into your financial planning to ensure sustainable operations and growth.
Breakeven and Payback Period
The breakeven time for a HoneyBaked Ham franchise is estimated at 18 months, which indicates that you should expect to recover your initial investment within this timeframe. Additionally, the investment payback period is around 12 months, suggesting that with effective management and sales strategies, franchisees can achieve a return on investment relatively quickly.
HoneyBaked Ham Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
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HoneyBaked Ham Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes shown in the chart and table.
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| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 409 | 440 | 439 |
| Net Change YoY | 31 | -1 | |
| Franchised Units | 209 | 215 | 209 |
| Net Change YoY | 6 | -6 | |
| Corporate Units | 200 | 225 | 230 |
| Net Change YoY | 25 | 5 |
Initial Investment
The HoneyBaked Ham franchise offers a range of initial investments, with costs ranging from $448,600 to $858,900. This investment includes the franchise fee of $15,000 and other startup expenses. Potential franchisees should prepare for a cash requirement that aligns with these figures to ensure they can effectively launch their business.
Franchise Fees
Franchisees are required to pay a royalty fee of 6% on gross sales, along with a marketing fee of 2%. These ongoing fees are essential for maintaining brand standards and supporting marketing efforts that drive customer traffic to HoneyBaked Ham locations.
Financial Performance
Average annual revenue per unit stands at approximately $951,245, with a median revenue of $880,776. The revenue range varies significantly, with the lowest annual revenue reported at $274,646 and the highest at $2,764,727, showcasing the potential for profitability based on location and management.
Breakeven and Payback
Franchisees can expect to reach breakeven within approximately 18 months. Moreover, the investment payback period is notably favorable, averaging just 12 months, allowing franchisees to recoup their initial investment relatively quickly.
Franchise Growth
As of 2023, HoneyBaked Ham operates 209 franchised units and 230 corporate units, reflecting a stable presence in the market. The number of franchised units has seen slight fluctuations, indicating a steady demand for the brand while maintaining a robust corporate unit growth trajectory.
Operational Insights
The average EBITDA for HoneyBaked Ham units is around $167,202, representing 17.7% of revenue. The cost of goods sold (COGS) accounts for approximately 39.2% of revenue, while total operating expenses average about $299,660. These figures provide valuable insights into the financial health and operational efficiency of the franchise.
Frequently Asked Questions
The initial investment for a HoneyBaked Ham franchise ranges from $448,600 to $858,900, which includes the franchise fee and other startup costs.