🍟 8/30/2021 – Hummus & Pita Co. And Hydrate IV Bar

For today’s edition, I’m 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 you’ve been to or heard of The Halal Guys, The Hummus & Pita Comay as well be it’s 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 “fast food —> fast casual”, 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) don’t 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 “to feel better fast”…aka if you’re hungover AF they’ll bring you back to life  —>  . It’s 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 IV’s impressive unit level economics, it’s good to be aware of this category of franchises and keep an eye on how they progress both financially and with public sentiment.

Let’s get to the breakdowns!👇


The Hummus & Pita Co.

Order The Hummus & Pita Co - Chelsea Delivery Online | New York | Menu &  Prices | Uber Eats

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 Wolf’s Take  🍟

There’s 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 it’s 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), Wendy’s ($1.6M), Jack in the Box ($1.5M), and KFC ($1.2M).

It’s early days for The Hummus & Pita Co., but it’s 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


Hydrate IV Bar

Hydrate IV Bar in Denver, CO, US | Mindbody

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 Wolf’s Take  🍟

I said it earlier, but I’ll say it again: I have no medical degree, so I can’t 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 I’ve 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

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