Verified — real FDD extraction
SBA-eligible · directory code S0833 since 2017
HUDDLE HOUSE
Food & Dining · independent · est. —
Huddle House is a Southern-style family diner chain serving made-to-order breakfast, burgers, and comfort food, often in smaller towns and open long hours. A franchisee operates a sit-down diner, managing cooks, servers, and daily operations.
HUDDLE HOUSE net unit count declined -10.2% from 2021–2023 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The main concern in the record: the system is shrinking.
Exit rate · latest year
9.1%
vs 8.6% across 137 food & dining systems
Cost to open
$552K–$1.4M
Item 7 total investment range
SBA loan defaults
25.9%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2021–2023
Survival record
FDD Item 20 · outlet status by year
In fiscal 2023, 21 of 231 franchised outlets left the system — a 9.1% annualized exit rate, vs 8.6% across 137 food & dining systems. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2021 | 2022 | 2023 |
|---|---|---|---|
| Outlets at start | 313 | 303 | 286 |
| Opened | 11 | 6 | 7 |
| Transfers | 14 | 10 | 17 |
| Terminations | 8 | 12 | 5 |
| Non-renewals | 4 | 6 | 5 |
| Reacquired by franchisor | 0 | 4 | 1 |
| Ceased — other reasons | 6 | 6 | 11 |
| Outlets at end | 303 | 286 | 272 |
| Net change | -10 | -17 | -14 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 138 SBA-backed loans to HUDDLE HOUSE franchisees since 1991. Of the 112 that have resolved, 25.9% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
25.9%
29 of 112 resolved defaulted
64.2%
avg. charged-off $ ÷ approved $
16.6%
default rate × loss severity
$1,710,160
what recent franchisees borrowed
59 mo
approval → charge-off, defaulted loans
4 vs 9
distinct banks — pulling back
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO HUDDLE HOUSE BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
Who finances it
Truist Bank
14.3% of this brand's loans
That lender charges off 8.3% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
79.2%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
Not enough resolved loans to split
Computed from 138 SBA 7(a)/504 loans to HUDDLE HOUSE franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $35K franchise fee (Item 5) and a total investment of $552K–$1.4M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$552K–$1.4M
all-in investment range
Franchise fee (Item 5)
$35K
upfront, one-time
Royalty (Item 6)
4.75%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$48K
4.75% of sales, before profit
Over a 10-yr term
$475K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for HUDDLE HOUSE with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 241 wage cases against operators of this system, recovering $1.3M in back wages for 4,459 workers, including 20 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
241
Back wages owed
$1.3M
Employees affected
4,459
Since 2020
16
20 of these cases involved child-labor violations, covering 36 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual HUDDLE HOUSE franchisees — separately owned businesses operating under the brand name — not HUDDLE HOUSE itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2025.
Modeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand sits mid-pack: riskier than 40% of systems we score.
Risk percentile
40 / 100
Loan-corroborated
Modeled SBA charge-off
11.3%
Observed SBA charge-off
25.9%
Top drivers: Share financed by high-loss lenders (lowers) · Investment ceiling (log) (lowers) · Single-lender dependence (raises) · Net unit growth (raises). 15+ resolved loans stand behind this estimate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for HUDDLE HOUSE. That's a good sign — but it reflects news coverage, not a guarantee.
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing HUDDLE HOUSE's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →HUDDLE HOUSE franchise questions, answered from the filings
What percentage of HUDDLE HOUSE franchises closed last year?
In HUDDLE HOUSE's latest FDD Item 20 (fiscal 2023), 21 of 231 franchised outlets left the system — an annualized exit rate of 9.1% — compared with 8.6% across 137 food & dining systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a HUDDLE HOUSE franchise cost?
Per HUDDLE HOUSE's 2024 FDD, buying in requires an initial franchise fee of $35K (Item 5) and a total initial investment of $552K–$1.4M (Item 7).
What royalty does HUDDLE HOUSE charge?
HUDDLE HOUSE charges an ongoing royalty of 4.8% of gross sales, per Item 6 of its 2024 FDD.
Does HUDDLE HOUSE disclose earnings (Item 19)?
Yes — HUDDLE HOUSE makes a financial performance representation in Item 19 of its 2024 FDD. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for HUDDLE HOUSE franchises default?
Across 138 SBA-backed loans to HUDDLE HOUSE franchisees since 1991, 29 of the 112 that have resolved were charged off — a 25.9% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.