FDD Talk: The Honey Baked Ham Company Franchise Costs, Fees, Average Revenues and/or Profits (2022 Review)

In this FDD Talk post, you’ll learn the following:

  • Section I – Estimated initial investment (franchise costs) for The Honey Baked Ham Company franchise, based on Item 7 of the company’s 2022 FDD
  • Section II – Initial franchise fee, royalty fee, and marketing fee for The Honey Baked Ham Company franchise, based on Items 5 and 6 of the company’s 2022 FDD
  • Section III – Number of franchised and company-owned The Honey Baked Ham Company outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD
  • Section IV – Background information on The Honey Baked Ham Company franchise opportunity, including relevant news updates
  • Section V – Presentation and analysis of The Honey Baked Ham Company’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:
  • 2021 average, median, high, and low net sales for the 200 franchised Honey Baked Ham Company Stores that were in operation for three years through the end of the company’s last fiscal year, which included the period from September 28, 2020 to September 26, 2021
  • 2017-2021 average, median, highest, and lowest net sales for the franchised Honey Baked Ham Company Stores that were open for three years and operated continuously throughout the applicable fiscal year
  • 2020 average net sales, cost of goods sold, gross profit, hourly labor costs, and store operating profit after COGS and hourly labor for the 152 franchised Honey Baked Ham Company Stores that were open during the entire period from January 1, 2020 to December 31, 2020 and that provided year-end profit and loss statements to the franchisor on its standardized form for this period

Section I – The Honey Baked Ham Company Franchise Costs

  • Franchise Fee:  $30,000
  • Travel and Living Expenses While Training:  $2,000 to $7,500
  • Real Estate and Improvements:  $148,700 to $318,600
  • Architectural:  $13,150 to $18,500
  • Equipment, Decor, and Fixtures:  $90,000 to $150,000
  • Rent:  $8,100 to $22,500
  • Security Deposit:  $2,700 to $6,500
  • Other Deposits and Licenses:  $2,700 to $4,600
  • Signs:  $8,500 to $16,000
  • Opening Advertising:  $10,000
  • Opening Inventory:  $15,000 to $20,000
  • CMS/Point-of-Sale System:  $15,200 to $19,000
  • Additional Funds:  $50,000
  • Estimated Total Franchise Costs:  $396,050 to $673,200

Section II – The Honey Baked Ham Company’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

  • Initial Franchise Fee:  $30,000
  • Royalty:  6% of net sales
  • Advertising Fund Contribution:  3.25% of net sales
  • Local Advertising:  1% of net sales

Section III – Number of Franchised and Company-Owned The Honey Baked Ham Company Outlets

Franchised

2019

  • Outlets at the Start of the Year:  212
  • Outlets at the End of the Year:  212
  • Net Change:  0

2020

  • Outlets at the Start of the Year:  212
  • Outlets at the End of the Year:  209
  • Net Change:  -3

2021

  • Outlets at the Start of the Year:  209
  • Outlets at the End of the Year:  209
  • Net Change:  0

Company-Owned

2019

  • Outlets at the Start of the Year:  201
  • Outlets at the End of the Year:  202
  • Net Change:  +1

2020

  • Outlets at the Start of the Year:  202
  • Outlets at the End of the Year:  202
  • Net Change:  0

2021

  • Outlets at the Start of the Year:  202
  • Outlets at the End of the Year:  200
  • Net Change:  -2

Section IV – Background Information on The Honey Baked Ham Company Franchise

15 Things You Need to Know About The Honey Baked Ham Company Franchise

Introduces New Menu Selections

1.  In early June 2021, The Honey Baked Ham Company announced a series of new menu innovations including mouth-watering family meals and sides to share. The new Summer Meal Packs, BBQ Pulled Pork Sandwiches, and HoneyBaked Beans are the perfect solution for ready-to-go summer meals as people enjoy getting back together.

2.  Jo Ann Herold, chief marketing officer of The Honey Baked Ham Company, said, “We’re always looking for ways we can introduce new HoneyBaked originals to our menu. Over the last year we’ve been testing new products, like our signature baked beans recipe, to give families more meal options. We continue to be committed to creating convenient, delicious, quality dishes that can be enjoyed anytime, anywhere.”

3.  Families could purchase these brand-new seasonal items from their local HoneyBaked store during the summer season:

  • Summer Meal Packs – The Summer Meal Packs offer a variety of options including a signature meat choice of ham or turkey, two heat-and-serve sides like Cheesy Potatoes au Gratin and Tuscan-style Broccoli, and Kings Hawaiian rolls. Each bundle is curated to serve four to six people.
  • BBQ Pulled Pork Sandwich – The HoneyBaked BBQ Pulled Pork Sandwich is piled high with tender and juicy pulled pork, slathered with sweet and tangy BBQ sauce, and finished with Duke’s mayo and pickle chips.
  • Build Your Own BBQ Pulled Pork Sandwich 6-Pack – HoneyBaked’s BBQ Pulled Pork is also included in a Summer Meal Pack option featuring three pounds of pre-cooked HoneyBaked BBQ Pork Roast (just heat and serve), a side of pickle chips, six rolls, and a one-pound fresh deli side – either Potato Salad or Broccoli Bacon Bliss.
  • HoneyBaked Beans – The HoneyBaked Beans heat-and-serve side dish includes a blend of great northern beans and black-eyed peas with Honey Baked Ham in a zesty sauce.

4.  In addition to the summer menu items, The Honey Baked Ham Company tested new items in certain markets, including:

  • HoneyBaked Lettuce Wraps – The Keto-Friendly HoneyBaked Lettuce Wraps feature savory Honey Baked Ham or Turkey Breast, crispy bacon, and fresh vegetables wrapped in crisp, green leaf lettuce. The Ham Bacon and Swiss, and Turkey Bacon Ranch Wraps area available for lunch and catering. Available in select store locations in Florida, Georgia, North Carolina, and Texas.
  • Take ‘N Bake Sliders – The Take ‘N Bake Sliders are a tasty option for dinner or any summer gathering, and feature Kings Hawaiian rolls layered with Honey Baked Ham or Turkey, Swiss cheese, a sweet and savory brown sugar garlic butter, and a side of pickle chips. Available in select store locations in Michigan and Illinois. Serves 4.

5.  The Honey Baked Ham Company encourages customers to order their HoneyBaked favorites in advance using HoneyBaked’s Buy Online Pickup In Store or Curbside service to save time.

Launches Pumpkin Spice Glazed Turkey Breast to Please Pumpkin Spice Fanatics

6.  At the end of August 2021, The Honey Baked Ham Company launched its new Pumpkin Spice Glazed Turkey Breast (PSG TB) for a limited time. The food retailer combined a pumpkin spice flavor with its signature glaze to bring a new sweet and crunchy topping to the popular turkey breast offering just in time for fall.

7.  In preparation for the limited time PSG TB offering, HoneyBaked partnered with OnePoll to understand the experiences and flavors that make up consumers’ favorite seasons. The results reinforced the demand for fall flavors.

  • 69% agree fall has the best seasonal flavors; in fact, 70% of people agree pumpkin spice is an essential part of the fall season;
  • 65% of people said pumpkin spice flavors should be available August through October; and 15% want the flavor to be available all year;
  • 59% said spending time with family and friends for gatherings is a favorite fall activity; and 71% of respondents said they feel disappointed when they miss out on an experience.

8.  Jo Ann Herold, chief marketing officer of The Honey Baked Ham Company, said, “The data proves America’s affinity for all things fall, especially the flavors and traditions that make it a favorite time of year. We added pumpkin spice to our signature glaze to bring two fall flavors together in a delicious combination creating our Pumpkin Spice Glazed Turkey Breast. Just another way for all the pumpkin spice fans to enjoy the flavor this season.”

9.  The pumpkin spice craze has heightened year after year – so much that people are willing to go to extreme lengths to keep fall flavors around all year. Here is what pumpkin spice lovers are willing to do:

  • 27% would give up their smart phone for a year;
  • 27% of people would go a month without Internet access;
  • 28% would shave their head bald;
  • 30% would give up social media for a month.

10.  Although pumpkin spice products have become more popular, 51% of people have never tried an unconventional pumpkin spice item. HoneyBaked wanted to expand people’s horizons with its unique fall flavor mashup. The Pumpkin Spice Glazed Turkey Breast is available roasted or smoked, fully cooked, pre-sliced, and ready to serve. It could be purchased at HoneyBaked locations (excluding California) through October 31, while supplies lasted.

11.  HoneyBaked’s PSG TB was also sold as part of their Winner Winner Turkey Dinner complete meal which includes the Pumpkin Spice Glazed Turkey Breast, two heat-and-serve sides like Cheesy Potatoes au Gratin and Tuscan-style Broccoli, and dinner rolls.

Company History

12.  The Honey Baked Ham Company was founded in 1957 by Harry Hoenselaar in Detroit, Michigan. However, the company traces its history back a few decades to the 1930s when Hoenselaar was working in a butcher shop. After Hoenselaar noticed that customers often struggled to properly carve their bone-in hams, Hoenselaar decided to develop a slicer. His prototype became the first spiral-slicing machine and he filed a patent for the device in 1944.

13.  Around that time, Hoenselaar also began working on the perfect sweet glaze for hams. This became the signature flavor of hams sold by The Honey Baked Ham Company.

14.  Over the next few decades, The Honey Baked Ham Company expanded around the United States. Hoenselaar divided the country into four territories and assigned a territory to each of his four daughters. The Hoenselaar family continues to run The Honey Baked Ham Company today. The Honey Baked Ham Company currently operates with a mix of company-owned and franchised locations across the U.S.

Entrepreneur’s Franchise 500

15.  The Honey Baked Ham Company ranked No. 166 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for The Honey Baked Ham Company Franchise (Item 19, 2022 FDD)

Part 1 – Net Sales of 200 Franchised Stores Open At Least Three Years for 2021 Fiscal Year

  • Part 1 displays the average and median Net Sales of 200 franchised Stores that were in operation for three years through the end of the company’s last fiscal year, which included the period from September 28, 2020 to September 26, 2021.
  • Nine franchised Stores were excluded from this data because they were not open at least three full years.
  • The franchised Store information in Part 1 is based on sales reports received from the company’s Customer Management System or POS system. The franchisor has not audited or verified this information.

All Stores

  • Range of Net Sales:  $240,473 to $2,066,377
  • Number of Stores:  200
  • Average Net Sales:  $793,178
  • Median Net Sales:  $732,435
  • Number and Percentage of Stores At or Above Average:  84/42%

First Quartile

  • Range of Net Sales:  $940,833 to $2,066,337
  • Number of Stores:  50
  • Average Net Sales:  $1,256,338
  • Median Net Sales:  $1,235,286
  • Number and Percentage of Stores At or Above Average:  19/38%

Second Quartile

  • Range of Net Sales:  $793,178 to $940,187
  • Number of Stores:  50
  • Average Net Sales:  $834,202
  • Median Net Sales:  $859,578
  • Number and Percentage of Stores At or Above Average:  25/50%

Third Quartile

  • Range of Net Sales:  $548,733 to $793,178
  • Number of Stores:  50
  • Average Net Sales:  $637,054
  • Median Net Sales:  $645,179
  • Number and Percentage of Stores At or Above Average:  24/48%

Fourth Quartile

  • Range of Net Sales:  $240,473 to $548,733
  • Number of Stores:  50
  • Average Net Sales:  $445,118
  • Median Net Sales:  $476,264
  • Number and Percentage of Stores At or Above Average:  28/56%

Part 2 – Average Net Sales of Franchised Stores by Fiscal Year

2017

  • Store Count:  208
  • Average Net Sales:  $705,531
  • Number of Locations Above Average:  84
  • Percentage of Locations Above Average:  43.8%
  • Median Net Sales:  $662,953
  • Highest Net Sales:  $1,800,000
  • Lowest Net Sales:  $157,000

2018

  • Store Count:  212
  • Average Net Sales:  $730,618
  • Number of Locations Above Average:  91
  • Percentage of Locations Above Average:  46.2%
  • Median Net Sales:  $684,636
  • Highest Net Sales:  $1,930,000
  • Lowest Net Sales:  $161,000

2019

  • Store Count:  212
  • Average Net Sales:  $746,838
  • Number of Locations Above Average:  87
  • Percentage of Locations Above Average:  43.9%
  • Median Net Sales:  $698,557
  • Highest Net Sales:  $1,972,066
  • Lowest Net Sales:  $264,644

2020

  • Store Count:  209
  • Average Net Sales:  $721,168
  • Number of Locations Above Average:  81
  • Percentage of Locations Above Average:  41.8%
  • Median Net Sales:  $666,467
  • Highest Net Sales:  $1,646,350
  • Lowest Net Sales:  $230,098

2021

  • Store Count:  209
  • Average Net Sales:  $793,178
  • Number of Locations Above Average:  84
  • Percentage of Locations Above Average:  40.2%
  • Median Net Sales:  $732,435
  • Highest Net Sales:  $2,066,337
  • Lowest Net Sales:  $240,473
  • Part 2 presents Average Net Sales and other sales data from each of the last five fiscal years for franchised Stores that were open for three years and operated continuously throughout the applicable fiscal year.
  • The franchisor excluded 16 franchised Stores in 2017, 15 franchised Stores in 2018, 17 franchised Stores in 2019, 15 franchised Stores in 2020, and 9 franchised Stores in 2021 that were not open at least three full years.
  • The franchised Store information in Part 2 is based on sales reports received from the franchisor’s Customer Management System or POS system. The franchisor has not audited or verified this information.

Part 3 – Historical Sales and Certain Expenses for 152 Franchised Stores for Calendar Year 2020

  • Part 3 presents Net Sales, Cost of Goods Sold, and Hourly Labor expense data for 152 franchised Stores that were open during the entire period from January 1, 2020 to December 31, 2020 and that provided year-end profit and loss statements to the franchisor on its standardized form for this period. The franchisor has not audited or verified this information.
  • Part 3 does not include any data related to 63 franchised Stores that were open in 2020, that did not provide profit and loss statements to the franchisor, or whose statements were not provided to the franchisor in the correct format.
  • Cost of Goods Sold includes the total costs of food and beverage sales as well as paper and packaging supplies.
  • Gross Profit is calculated by subtracting Cost of Goods Sold from Average Net Sales.
  • Hourly Labor Costs include only hourly employee wages.
  • Store Operating Profit After COGS and Hourly Labor is calculated by subtracting Cost of Goods Sold and Total Hourly Labor Costs from Average Net Sales.
  • The cost and expense data presented in Part 3 does not reflect all costs and expenses that must be deducted from the Net Sales figures to obtain your net income or profit, including store operating expenses such as manager salary, fringe benefits, payroll taxes, supplies, menus, uniforms, credit card fees, bank charges, utilities, dues and licenses, maintenance contracts, trash removal, exterminators, royalty fees, contributions to the advertising fund, local advertising, and rent.

All Stores

  • Net Sales Range:  $229,650 to $1,694,710
  • Number of Stores:  152 Stores
  • Net Sales Average:  $737,155
  • Net Sales Median:  $684,586
  • Cost of Goods:  $274,279 (37.2%)
  • Gross Profit:  $462,877 (63.8%)
  • Hourly Labor:  $99,500 (13.5%)
  • Store Operating Profit After COGS and Hourly Labor:  $363,377 (49.3%)

Stores With Net Sales Less Than $500,000

  • Net Sales Range:  $229,650 to $492,658
  • Number of Stores:  38 Stores
  • Net Sales Average:  $398,332
  • Net Sales Median:  $410,036
  • Cost of Goods:  $158,434 (39.8%)
  • Gross Profit:  $239,898 (60.2%)
  • Hourly Labor:  $55,721 (14%)
  • Store Operating Profit After COGS and Hourly Labor:  $184,176 (46.2%)

Stores With Net Sales Between $500,001 and $700,000

  • Net Sales Range:  $494,113 to $683,263
  • Number of Stores:  38 Stores
  • Net Sales Average:  $585,850
  • Net Sales Median:  $568,701
  • Cost of Goods:  $221,261 (37.8%)
  • Gross Profit:  $364,589 (62.2%)
  • Hourly Labor:  $85,370 (14.6%)
  • Store Operating Profit After COGS and Hourly Labor:  $279,219 (47.7%)

Stores With Net Sales Between $700,001 and $900,000

  • Net Sales Range:  $685,910 to $868,829
  • Number of Stores:  38 Stores
  • Net Sales Average:  $769,788
  • Net Sales Median:  $764,875
  • Cost of Goods:  $278,445 (36.2%)
  • Gross Profit:  $491,343 (63.8%)
  • Hourly Labor:  $103,775 (13.5%)
  • Store Operating Profit After COGS and Hourly Labor:  $387,567 (50.3%)

Stores With Net Sales Above $900,001

  • Net Sales Range:  $893,376 to $1,694,710
  • Number of Stores:  38 Stores
  • Net Sales Average:  $1,194,651
  • Net Sales Median:  $1,141,906
  • Cost of Goods:  $438,974 (36.7%)
  • Gross Profit:  $755,677 (63.3%)
  • Hourly Labor:  $153,132 (12.8%)
  • Store Operating Profit After COGS and Hourly Labor:  $602,546 (50.4%)
  • The franchised Stores reflected in this financial performance representation offer inventory and services for sale that are substantially similar to the inventory and services that you will offer for sale in your HoneyBaked Store.
  • This financial performance representation is provided as a reference only and is not intended to be used as a statement or forecast of earnings, sales, profits, or the prospects or chances of success that may be achieved by any individual franchised HoneyBaked Store.
  • The actual sales of your Store depend on many factors including its location, site criteria, local household income, residential and business population during the day and at night, ease of ingress and egress, seating, parking, the physical condition of your Store, and the size and visibility of the Store.
  • Your sales will be impacted by your own operational ability, your experience with managing a business, your capital and financing (including working capital), training, customer service at your Store, product quality, and your business plan.
  • Your sales may also be impacted by the weather and by promotions you run and those run by your competitors.

Section VI – The Honey Baked Ham Company Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇



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