HARD ROCK CORPORATE
Investor Information
Investor Information
With venues in 75 countries, including 181 cafes, 25 hotels and 11 casinos, Hard Rock International (HRI) is one of the most globally recognized companies. Beginning with an Eric Clapton guitar, Hard Rock owns the world's greatest collection of music memorabilia, which is displayed at its locations around the globe.
FRANCHISE COSTS
There are various costs and fees associated with the acquisition of a Hard Rock Cafe Franchise. An estimated initial investment range as well the different fees are outlined below:
Area Development Agreement
- An up-front fee is paid to secure the exclusive right to develop & operate Hard Rock Cafes within a certain geographic region.
- Fees vary depending upon the size of the territory, number of locations & length of the agreement.
Site Fee
- Potential markets are predetermined in the Franchise Agreement.
- The standard Hard Rock site fee is no less than $350,000.
- An individual site fee must be paid prior to developing each new Cafe.
- Fees must be paid within a pre-agreed time-frame.
Continuing Fees
- 5% of all Food & Beverage Gross Receipts paid monthly.
- 10% of all Merchandise Gross Receipts paid monthly.
- A memorabilia lease payment of 10% of the appraised memorabilia value.
Marketing
- 1% of total Gross Receipts paid monthly to a Global Marketing Fund.
Term
- The agreement is for a 10 year term with a 10 year renewable option.
INITIAL INVESTMENT
Amounts may vary depending on the restaurant and other Factors.
We have prepared these estimates based on our experience. Except as expressly indicated otherwise, these estimates cover your initial cash investment up to the opening of your Restaurant. They do not provide for your cash needs to cover any financing incurred by you or your other expenses. You should not plan to draw income from the operation during the start-up and development stage of your business, the actual duration of which will vary materially from restaurant to restaurant and cannot be predicted by us for your Restaurant. You must have additional sums available, whether in cash or through a bank line of credit, or have other assets which you may liquidate or against which you may borrow, to cover other expenses and any operating losses you may sustain, whether during your start-up and development stage, or beyond. The amount of necessary reserves will vary greatly from franchisee to franchisee and will depend upon many factors, including the rate of growth and success of your business, which in turn will depend upon factors such as the demographics and economic conditions in the area in which your Restaurant is located, the presence of other “Hard Rock Cafe” Restaurants or other public awareness of our business and trademarks within the general vicinity of your proposed Restaurant, your ability to operate efficiently and in conformance with our recommended methods of doing business, and competition. Because the exact amount of reserves will vary from operation to operation and cannot be meaningfully estimated by us, we urge you to retain the services of an experienced accountant or financial advisor to develop a business plan and financial projections for your particular operation.
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We have prepared these estimates based on our experience. Except as expressly indicated otherwise, these estimates cover your initial cash investment up to the opening of your Restaurant. They do not provide for your cash needs to cover any financing incurred by you or your other expenses. You should not plan to draw income from the operation during the start-up and development stage of your business, the actual duration of which will vary materially from restaurant to restaurant and cannot be predicted by us for your Restaurant. You must have additional sums available, whether in cash or through a bank line of credit, or have other assets which you may liquidate or against which you may borrow, to cover other expenses and any operating losses you may sustain, whether during your start-up and development stage, or beyond. The amount of necessary reserves will vary greatly from franchisee to franchisee and will depend upon many factors, including the rate of growth and success of your business, which in turn will depend upon factors such as the demographics and economic conditions in the area in which your Restaurant is located, the presence of other “Hard Rock Cafe” Restaurants or other public awareness of our business and trademarks within the general vicinity of your proposed Restaurant, your ability to operate efficiently and in conformance with our recommended methods of doing business, and competition. Because the exact amount of reserves will vary from operation to operation and cannot be meaningfully estimated by us, we urge you to retain the services of an experienced accountant or financial advisor to develop a business plan and financial projections for your particular operation.
View Initial Investment >
Hard Rock International is currently looking for experienced multi-unit operators with proven experience and success in the target market and a desire to grow the Hard Rock Cafe brand. Each candidate meeting the requirements will be evaluated on a combination of the required industry experience, operational and management experience, general business acumen and specific target market knowledge.
Requirements
The applicant must have demonstrative experience of 2 or more of the following criteria:
- Operating experience and good knowledge of target market
- Owned or operated your own restaurant business
- Owned or operated your own franchise business
- Owned or operated a multi-unit business
- Dealt with the supply chain in retail and F&B sectors
Financial Requirements
Hard Rock International is currently looking for experienced multi-unit operators who have a $ 2,000,000 net worth and liquidity of at least $ 1,000,000. You must be able to demonstrate this with personal and/or corporate financial statements.
Restaurant/ Food & Beverage related Industry Experience & requirements:
Restaurant/ Food & Beverage related Industry Experience & requirements:
- Quick service
- Casual Dining
- Full service fine dining.
- Bar & Nightclub
- Retail sales
- Supply chain management
- Live Music
- Customer service
- Support infrastructure
- Hotel experience
Pre-Qualification (1-2 weeks)
- The prospective franchisee will submit the franchise questionnaire online Click Here.
- Hard Rock International will review the prospective franchisee's qualifications and experience in the restaurant and hospitality business as well as the availability of the proposed territory. Knowledge of the local market as well as a proven track record in the hospitality industry will be a key component in the decision making process. Based on the outcome of this process the prospective franchisee will be advised whether it is a viable candidate and will move onto the next stage.
Approval Process & Qualification (4 weeks)
- If the prospective franchisee's experience qualifies it to move onto the next phase, Hard Rock International will contact the prospective franchisee and a phone or in person introductory meeting may be arranged.
- This will be followed by a the execution of a Non-Disclosure Agreement ("NDA") that will permit the prospective franchisee to exchange sensitive and confidential information with Hard Rock International.
- A formal Franchise application will also be filled out that will require such information about prospective franchisee as full company makeup, proposed financing, group ownership structure and further information as may be required for our formal due diligence process. Click here for the Franchise Questionnaire.
- A Franchise disclosure document will also have to be filled in. Click here for the Franchise Disclosure document.
- A market study analysis template will be filled out by the prospective franchisee. This document will request financial information with regards to the project such as roddue projections, a business plan and investment and construction cost projections.
Letter of Intent (LOI) (4-12 weeks)
- The following step will be to sign a Letter of Intent or "LOI". This LOI will outline the principal terms and conditions contained within a Restaurant Franchise Agreement ("RFA") and or an Area Development Agreement ("ADA"). The LOI will address such issues as
- Contract term and unit development timelines
- Territory and or Restaurant Site Fees
- Ongoing royalties
- Marketing commitments
- Guarantee provisions and due diligence requirements
- The LOI will also contain a "No Shop" Period. This will be a predetermined time during which Hard Rock International will undertake not to engage in any discussions, negotiations or agreement with another party in regards to the Hard Rock Cafe rights in the proposed territory. This is generally set for a period of no more than ninety (90) calendar days.
- The "No Shop" period entails the payment of a "No Shop Fee". This is a non refundable fee no less than $20,000 USD that is paid by the prospective franchisee to guarantee exclusivity of the territory under negotiation. If the parties execute a mutually acceptable RFA or ADA prior to the expiration of the No Shop Period, then the No Shop Fee will be credited against the Site Fee or Territory Fee.
- Background checks and formal due diligence of all the proposed franchisee's owners and/or Directors will also be undertaken at this stage.
Formal Franchise Agreements (4-8 weeks)
- Once the background checks have been undertaken and the prospective franchisee has successfully qualified, the relevant final legal Franchise Agreements will be prepared.
- This will be an ADA and/or a RFA or both, depending on the particular deal structure.
- A Memorabilia Lease Document outlining the terms and conditions surrounding the lease of items from Hard Rock's memorabilia collection for display in the Hard Rock Cafe will also be prepared and an individual memorabilia lease agreement will accompany each and every individual RFA.