Week 6: Hummus & Pita Co. and Hydrate IV Bar
The Chipotle of mediterranean food and a hangover cure spa
Welcome to Franchise Breakdowns, a weekly email covering up & coming franchises to help you find the next big brand. If youâre reading this but havenât subscribed, you can do so here:
To franchise owners,
First up - some important house keeping: Iâll be taking a break from your inbox next Monday for Labor Day đşđ¸ , so the next email youâll receive will be on September 13th!
Now for todayâs edition, Iâm highlighting The Hummus & Pita Co. and Hydrate IV Bar.
The Hummus & Pita Co. is a fast casual restaurant that serves 100% homemade, fresh, and healthy mediterranean cuisine. If youâve been to or heard of The Halal Guys, The Hummus & Pita Co. may as well be itâs fast casual counterpart. The Halal Guys only started franchising in 2014 and has already sold 200+ locations, with 83+ open today. I can tell you first hand from being a customer of both brands, that on the spectrum of âfast food â> fast casualâ, The Halal Guys is akin to Taco Bell, while The Hummus and Pita Co. is Chipotle. The Hummus & Pita Co. (like Chipotle) offers assembly line style service that makes ordering quick & convenient, and the meals themselves are filling, fresh, and (unlike their fast food counterparts) donât leave you feeling like a bag of trash after eating there!
Hydrate IV Bar is an IV therapy spa that offers monthly memberships for clients who want to maintain a healthy lifestyle, and they also allow for walk-ins who need âto feel better fastââŚaka if youâre hungover AF theyâll bring you back to life â ď¸ â> đ¤ . Itâs out of my wheelhouse to comment on whether weekly IV Therapy and vitamin shots are necessary and/or truly beneficial to a wellness routine, but I do have friends who swear IV therapy is the best hangover cure EVER. I was tipped off to this concept from a few multi-unit operators, so given Hydrate IVâs impressive unit level economics, itâs good to be aware of this category of franchises and keep an eye on how they progress both financially and with public sentiment.
Letâs get to the breakdowns!đ
DISCLAIMER: DO NOT CONSIDER ANYTHING WRITTEN AS INVESTMENT ADVICE. IF YOU DECIDE TO PURCHASE A FRANCHISE, YOU MUST DO YOUR OWN RESEARCH, AND REALIZE ANY INVESTMENT MAY CAUSE BANKRUPTCY.
The Hummus & Pita Co.
Background
Based out of Manhattan, New York
Founded in 2011, franchising since 2017
Serves mediterranean meals combining your choice of meat or falafel, fresh veggies, flavored hummus, and sauces
Number of Units
6 units open as of 2020
Source: Entrepreneur.com
Fees, Expenses (2020 FDD)
Initial Franchise Fee: $40k
Royalty Fee: 6% of gross sales
Brand Development Fund: 2% of gross sales
Initial Investment (2020 FDD)
$278,400 - $780,500
Financial Performance (2020 FDD)
The Wolfâs Take đÂ
Thereâs a clear difference in performance between the company owned locations and the newly franchised locations - the company owned locations are putting up monster numbers, averaging $1.9M between them, while the franchised units did just under $600k each in their first full year of operations.
All 3 company owned locations are in Manhattan, which is a beast of a market in itâs own right given the insane population density and real estate costs. With that said, the numbers are nothing to sneeze at, as $1.9M average revenue/location surpasses Popeyes ($1.6M), Wendyâs ($1.6M), Jack in the Box ($1.5M), and KFC ($1.2M).
Itâs early days for The Hummus & Pita Co., but itâs competing in an increasingly popular mediterranean category, and after picking up lunch and dinner multiple times at their Chambers St. location, it just feels like a concept that should be in every major metro and the surrounding suburbs. Ideally an investor would have more financial insight than is present, but the nature of the beast with emerging brands is that it takes visionaries to buy in on the earliest locations, while analytical types risk losing territory as they wait for more data.
Recent Press
Donating Thousands of Meals Helped Save The Hummus & Pita Co.
How Vegan Friendly Options Drive Traffic For The Hummus & Pita Co.
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Hydrate IV Bar
Background
Based out of Denver Colorado
Founded in 2016, started franchising in 2020
Provides hydration therapy and injectable vitamins in a restorative spa-like atmosphere
Number of Units
1 franchised location in Phoenix as of March 2021
5 company owned outlets (4 in Denver, 1 in Boulder)
Fees, Expenses (2020 FDD)
Initial Franchise Fee: $35k
Royalty Fee: 8% of gross sales
Brand Development Fund: Up to 2% of gross sales, currently not being charged
Initial Investment (2020 FDD)
$167,000 - $381,000
Financial Performance (2020 FDD)
The below data is from the two affiliate owned locations that were open for a minimum of 1 year or more as of December 31st, 2019.
Location #1:
Location #2:
The Wolfâs Take đÂ
I said it earlier, but Iâll say it again: I have no medical degree, so I canât comment on if IV hydration bars are a scam or if there are truly health benefits. My goal with this newsletter is to shed light on potentially lucrative franchise opportunities for those interested in business ownership (of course if I was aware a concept is fraudulent, I would never promote it in the first place).
But, as far as hydration bars go, the positive anecdotal evidence Iâve heard relating to hangovers gives me belief that these services may have some level of true demand (college town locations anyone?). From what we see from the affiliate locations, this business possesses incredibly strong unit economic potential, with the top location returning a whopping 109% Cash on Cash return in 2018, while the second location returned a 50% CoC return in 2019.
As with any business: understand the upside, but consider the risks before making decisions.
Recent Press
Thatâs it for this weekâs Franchise Breakdowns. Feel free to reply with any questions or feedback, or leave a comment. If someone sent this your way and you havenât subscribed yet, you can also do that below. Thanks and see you next week!
NOTICE REGARDING FRANCHISE INFORMATION
The Wolf of Franchises does NOT guarantee the financial performance of any franchise mentioned. The decision to purchase a licensed affiliate or franchise must be based on your own independent research. The Wolf of Franchises is not liable for any representation made by an affiliate, associate, marketing material, or Franchise Disclosure Document of a franchise with respect to real estate, financial, operations, or marketing performance of the business being acquired.
This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for informational purposes only, and any financial data and/or projections is clearly based upon information provided by franchises in their respective Franchise Disclosure Document. The offer of a franchise can only be made through the delivery of a franchise disclosure document, from a certified seller of the brand, which The Wolf of Franchises makes no claim to be. Do not consider any information here as a guarantee of financial performance. The Wolf of Franchises has no affiliation or relationship of any kind with any of the brands covered in this newsletter, but simply provides data that is publicly available online or in Franchise Disclosure Documents.
All data from Franchise Disclosure Documentâs is based on past performance, and if you were to purchase a franchise covered in the Wolf of Franchises newsletter, it is entirely possible that you lose your entire investment and go bankrupt.
