Franchisel.com — FDD Diligence Memo
Dave's Hot Chicken
Generated 2026-04-06 · 2024 FDD · Government-filed source
Dave's Hot Chicken
2024 FDD Diligence Memo
Score of 90/10 driven by: high financial transparency, strong unit growth.
Sys Health
9
Econ Burden
8
Red Flags & Key Signals
Item 19 revenue data has not yet been normalized from covered-source filings. Economics score is unavailable.
Investment Overview
Items 5, 6, 7Total investment range: $521,000 – $1,350,000. Initial fee: $40,000. Royalty: 6%. Marketing fund: 2%.
Item 19 — Revenue
Item 19 — filed, figures not available in databaseEconomics not rated — Item 19 not available.
Not DisclosedThis franchisor filed an Item 19, but the figures are not currently available in our database. This reflects a data coverage gap — not a judgment on the quality of the disclosure.
Item 20 — System Health
Item 20 — 2024 FDDSystem growing — net +64 units in reporting period.
↑ GrowingStrong expansion: 72 opened vs 8 closed/transferred. Closure/transfer rate of 3% is within normal range.
Total Units
282
Net Growth
+64
Turnover
3%
Year-over-Year Trends
2024 FDDOpened
+72
Closed
-8
Net
+64
Turnover rate: 3%
Prior-year Item 19 revenue data not available. Unit data above covers the reporting period in the 2024 FDD.
Key Contract Terms
Item 17Item 19 Data Quality Flags
Item 19Item 19 Filed — Figures Not Available
This franchisor filed an Item 19, but the figures are not currently in our database. This flag reflects a data coverage gap, not a judgment on the disclosure.
Franchisee Interview Questions
Item 20 contactsUse Item 20 to get current franchisee contact info. Call at least 3-5. Ask these questions:
8 units closed in the most recent FDD period. Ask franchisees: what actually drove those closures — was it market conditions, operations, or franchisor decisions?
Look for: Franchisees who left voluntarily vs. those terminated. Any pattern by region, years in system, or franchisee profile.
How responsive is your franchisor rep — do they actually help when you have a problem, or are they just checking boxes?
Look for: Specific stories (not just vague positives). Ask about a time they needed help urgently — response time matters.
The FDD does not include audited financial statements. Ask: do you have any visibility into the franchisor's financial health? Have you ever been concerned about the company's stability?
Look for: Even anecdotal signals — changes in leadership, delays in royalty statement processing, reduced marketing fund activity.
If you decided to sell your franchise tomorrow, how easy would that be? Has the franchisor ever blocked or delayed a transfer you wanted?
Look for: Transfer fee surprises, right-of-first-refusal complications, or franchisor demanding upgrades before approving a sale.
What did your revenue look like in year 1 vs. year 2 vs. now? When did you reach breakeven?
Look for: Year 1 revenue is typically well below Item 19 averages (which often exclude ramp-up units). Expect 12-24 months to reach average.
What did the training actually cover vs. what you needed on day 1? What do you wish you'd learned before opening?
Look for: Gap between training content and operational reality. New franchisees often report the training covered theory but not real-world situations.
Data sources: 2024 Franchise Disclosure Document filed with a state franchise regulator (government record). Source: filed FDD. · Payback estimates and margin assumptions are editorial — not from the FDD. This memo does not constitute legal or financial advice. Consult a franchise attorney and accountant before signing. Generated 2026-04-06 by Franchisel.com.