About The Hot Spot Franchise
The Hot Spot is a do it yourself arts and crafts studio franchise offering pottery painting, candle making, canvas painting, mosaics, succulent gardens, body scrubs, slime, and other creative activities for the general public.
Franchising since 2023, each studio operates from a single location within a limited area, providing a fun, hands on creative experience for guests of all ages.
The initial franchise fee is $37,500.
The Hot Spot Franchise Cost & Fees
Minimum Investment
$75K
Average Investment
$117K
Maximum Investment
$158K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $37,500 | One-time payment upon signing |
| Royalty Fee | 5% of biweekly Gross Revenue of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 1% of Gross Revenue, subject to increase to no more than 2% of Gross Revenue | National brand fund |
| Total Investment Range | $74,900 – $158,100 | Includes build-out, inventory, working capital |
The investment range of $75K–$158K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5% of biweekly Gross Revenue) and marketing fee (1% of Gross Revenue, subject to increase to no more than 2% of Gross Revenue) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $37,500 | $37,500 |
| Your Training Expenses | $2,000 | $5,000 |
| Website Development | $500 | $500 |
| Premises deposit | $2,000 | $7,000 |
| Utilities deposits | $100 | $400 |
| Rent – three months | $6,000 | $21,000 |
| Design and Architect Fees | $0 | $3,000 |
| Leasehold Improvements, Construction and/or Remodeling | $0 | $15,000 |
| Furniture, Fixtures, & Equipment | $5,000 | $18,000 |
| Exterior Signage | $2,000 | $6,000 |
| Business Licenses and Permits | $500 | $2,000 |
| Computer Systems | $1,200 | $2,400 |
| Initial Inventory to Begin Operating | $6,000 | $20,000 |
| Professional Fees | $2,000 | $4,000 |
| Initial Launch Marketing & Grand Opening Advertising | $1,500 | $2,500 |
| Insurance | $600 | $1,800 |
| Operating Expenses / Additional Funds – three months | $8,000 | $12,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $12,500 |
| Renewal Fee | $3,500 (waived for the initial option term) |
| Technology Fee | Currently $0, subject to increase, up to $150 per month |
| Audit Fee | Cost of examination plus related expenses |
| Required Minimum Expenditure for Local Marketing and Advertising | $500 Monthly |
| Advertising Cooperative | Your share of actual cost of advertising |
| Late Charge | $100 |
| Interest Charge | 18% per annum from due date, or maximum allowed by law |
| Non-Sufficient Funds Fee | $100 |
| Initial Training (additional personnel) | $300 per person per day |
| Additional Training | A reasonable fee, currently $300 per person per day |
| Conference/Convention Fee | $300 per person per day |
| Remedial Training Fee | Our then-current per diem rate for each trainer, plus travel and other expenses (Current per diem rate = $300) |
| Interim Management Support Fee | Our then-current per diem rate for on-site management, plus expenses (Current rate = 15% of Gross Revenue) |
| Evaluation Fee of Unapproved Item or Supplier | $750 |
| Quality Review Services | Up to $100/month |
| Relocation Fee | Our actual costs and expenses in approving the relocation |
| Liquidated Damages | Up to 36 months of Royalty Fees and Brand Fund Contributions |
| Indemnification | Amount of loss or damages plus costs |
| Reimbursement of legal fees and expenses | Our costs and expenses, including but not limited to attorneys’ fees |
| Reimbursement of Cost and Expenses for Non-compliance | Actual costs and expenses |
| Insurance Reimbursement | Amount paid by us for your insurance obligations, plus a 10% administrative fee and our legal fees, if any |
| Taxes | Amount of taxes |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Approximately 4 weeks (one week at an affiliate-owned or franchised studio and three weeks of remote learning) |
| Classroom Training | 30 |
| On-the-Job Training | 40 |
| Training Location | Reno, Nevada, or at a franchised or company-owned outlet, or another location specified by franchisor, including virtual training through teleconference, video call and/or web-based applications. |
| Additional Training | Franchisor may offer mandatory or optional additional training programs, including an annual business meeting or convention, for up to 5 days per year. Franchisee must attend if required and pay a reasonable fee for tuition/attendance, plus all travel, lodging, meals, and other expenses. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Protected |
| Exclusive Territory | No |
| Territory Size | Minimum population of 250,000; local market conditions may warrant a smaller Territory. |
| Description | Located in all or a portion of a listed town, city, or county, identified by a group of contiguous zip codes. Determined on an individual basis taking into account minimum numbers of households, average home prices and household incomes. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 5 years |
| Renewal Term | five (5) consecutive options to enter into a new franchise agreement for additional terms of five (5) years each |
| Renewal Fee | $3,500 (waived for the initial option term) |
| Renewal Conditions | Be in full compliance, have no more than three events of default during current term; provide written notice to us at least six months before the end of the term; execute a new franchise agreement; pay us the Successor Agreement fee of $3,500 (waived for the initial option term); continue to maintain your location, current trade dress and other standards; execute a general release; comply with then-current qualifications and training requirements; including completion of additional training. You may be asked to sign the then-current franchise agreement with materially different terms and conditions than your original Franchise Agreement. |
| Transfer Fee | $12,500 |
| Transfer Conditions | Franchisor approval required. Transferee must meet franchisor's standards, have sufficient business experience and financial resources, complete initial management training, and pay all amounts owed to franchisor and third-party creditors. Franchisee and transferee must execute a general release. Franchisor must approve material terms and conditions of transfer. Initial franchise fee is waived for transferee. |
| Termination for Cause | Franchisor may terminate if franchisee defaults. Defaults include insolvency, bankruptcy, falsifying reports, ceasing operations for five days or more, losing possession of premises, failure to restore business after casualty, failure to comply with laws, understating Gross Revenue two or more times, failure to comply with Article 15 covenants, unauthorized transfer, failure to transfer upon death/disability, conviction of felony/crime damaging goodwill, adverse judgment for fraud/racketeering, concealing revenues, creating public health/safety threat, refusing inspection/audit, unauthorized use of Marks/Confidential Information, non-compliance with non-compete, three or more defaults during term, insufficient funds two or more times, default under other agreements, or termination without cause. |
| Non-Compete Period | During the term of the franchise and for 24 months after termination or expiration. |
| Non-Compete Details | During term: cannot divert customers, participate in competing business, or act prejudicially to goodwill. After termination/expiration (24 months): cannot divert customers, participate in competing business within 20 miles of former or any other The Hot Spot studio, or act prejudicially to goodwill. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | The Franchise Agreement requires that you personally supervise your The Hot Spot studio for the first 12 months of operation. After 12 months, you may appoint a general manager with our prior consent. If approved, your general manager must successfully complete our Initial Management Training Program and all other training courses we require. Your general manager must devote his or her best efforts to the job and cannot have an interest or business relationship with any of our competitors. If the franchisee is a business entity, your general manager is not required to have an equity interest in the franchisee entity. Your manager must devote full time to the job and cannot have an interest or business relationship with any of our competitors. |
| Required Suppliers | Franchisee must purchase all items outlined in the Operations Manual, and any equipment or materials bearing the Marks in accordance with franchisor specifications. Franchisor maintains written lists of approved items of equipment, fixtures, inventory and suppliers (by brand name and/or by standards and specifications) and a list of designated suppliers and contractors for those items. These lists are updated periodically. |
| Supply Restrictions | Franchisee must purchase from approved suppliers or those meeting franchisor specifications. Franchisor may approve new suppliers upon written request and evaluation. Franchisor reserves the right to revoke approval of any supplier that does not continue to meet standards. A $750 fee is charged for evaluating proposed suppliers, refundable if approved. |
| Franchisor Revenue from Suppliers | Neither franchisor nor its affiliates received revenue from vendors on account of required purchases by franchisees during the last fiscal year ended December 31, 2023. Franchisor may do so in the future and keep any rebates or discounts. |
The Hot Spot Franchise Earnings — Item 19
Revenue Range
$63K – $1.1M
Sample Size
3 units
Past financial performance does not guarantee future results. Individual results will vary.
The Hot Spot Litigation & Risk Flags
Clean Litigation RecordThe Hot Spot has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
The Hot Spot System Growth
Total Units
4
Franchised
0
Company-Owned
4
The Hot Spot currently operates 0 franchised locations and 4 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2021 | 0 | 0 | 3 |
| 2022 | 0 | 0 | 3 |
| 2023 | 1 | 0 | 4 |
Transfers: 0 | Closures: 0
State Registrations
Registered in 16 states: CA, CT, HI, IL, IN, MD, MI, MN, NY, ND, OR, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$35K
Net Income
$-122,825
Total Assets
$106K
Audited by KEZOS & DUNLAVY Certified Public Accountants & Business Advisors for year ending December 31.
The Hot Spot Franchise — FAQ
The total investment to open a The Hot Spot franchise ranges from $74,900 to $158,100, per their Franchise Disclosure Document. This includes the initial franchise fee of $37,500. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
The Hot Spot charges a royalty fee of 5% of biweekly Gross Revenue of gross sales, plus a 1% of Gross Revenue, subject to increase to no more than 2% of Gross Revenue contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the The Hot Spot Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from The Hot Spot to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, The Hot Spot franchise owners report . This is based on a sample of 3 units. Past performance does not guarantee future results.
The Hot Spot has been franchising since 2023. The FDD shows an investment range of $74,900-$158,100, a 5% of biweekly Gross Revenue royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $37,500 and the total investment ranges from $74,900 to $158,100 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from The Hot Spot and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with The Hot Spot or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com