How to Finance a HuHot Franchise: Mongolian Grill Build-Out Costs
By Marc Cornella
A HuHot franchise loan has to pay for something most quick-service franchises never build: a dining room organized around a large, open grill where cooks stir-fry each guest’s bowl in front of them. Before you sign a lease for a HuHot Mongolian Grill, you need a plan to fund the kitchen and grill line, a self-serve food bar, a full-service dining room, brand fees and enough working capital to carry the restaurant until it finds its rhythm.
This article explains what is publicly known about owning a HuHot Mongolian Grill, how the restaurant’s format shapes the budget, which loan programs may fit and how lenders are likely to look at a HuHot deal. It is general information only. US Professional Funding is not affiliated with, sponsored by or endorsed by HuHot Mongolian Grill or HuHot Mongolian Grills, LLC; the name is used only to describe the business. Any figures in the franchisor’s disclosure document can change from year to year, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice.
HuHot Franchise Loan at a Glance
HuHot does not post its fees or investment range on the public pages of its company website, so the most important numbers for your loan request come from the franchisor’s current disclosure document, which you receive during the franchise process. Here is what the company itself publishes:
- Founded: 1999 in Missoula, Montana, according to the company
- Franchisor: HuHot Mongolian Grills, LLC, headquartered in Missoula, Montana
- System size: the company’s website lists over 50 locations across 14 states
- Concept: all-you-can-eat, create-your-own stir-fry cooked on a live, open grill
- Franchise fee, royalty and marketing fund: set out in Items 5 and 6 of the current disclosure document; not published on the company’s public pages
- Estimated initial investment: set out in Item 7 of the current disclosure document; not published on the company’s public pages
- SBA Franchise Directory: not listed at the time of writing
What Is HuHot Mongolian Grill?
HuHot opened its first restaurant in Missoula, Montana, in 1999 under a different name. According to the company’s history, it began franchising a few years later, adopting the HuHot name at that time. The franchisor, HuHot Mongolian Grills, LLC, is still based in Missoula.
The concept is interactive dining. Guests choose a protein such as chicken, pork, beef, seafood or tofu where available, add noodles or rice and fresh vegetables, pick from a dozen signature sauces and hand the bowl to a cook who prepares it on a large, open grill. Because the meal is all-you-can-eat, guests can return for another bowl. Many locations also offer online ordering for takeout.
Why lenders look at it the way they do. A HuHot is a sit-down restaurant with a fixed price per visit, a food bar that must be stocked and replenished all day, and a centerpiece grill that is expensive to build and hard to repurpose. Lenders tend to view it as a full-service restaurant: a larger build-out, more staff and more working capital than a counter-service franchise, offset by an established brand and franchisor support.
HuHot Franchise Costs
Total cost depends on the site, the size of the dining room, whether the space was previously a restaurant and local construction prices. Item 7 of the disclosure document gives the franchisor’s estimate and its assumptions.
Initial franchise fee
The franchise fee is paid to the franchisor when you sign the franchise agreement. HuHot does not publish the amount on its company website, so confirm it in Item 5 of the current disclosure document, along with any development or additional-unit fees if you plan more than one restaurant.
Real estate and build-out
Most restaurant franchisees lease their space, and leasehold improvements are usually the largest line in the budget. For a HuHot, the build-out includes a commercial kitchen and prep area, the display grill and its ventilation, the self-serve food bar with refrigeration, restrooms, a dining room large enough to seat parties and families, and exterior work. A second-generation restaurant space with an existing hood, grease interceptor and plumbing can reduce the cost, but the grill and food bar layout may still require significant changes. Our article on first- vs. second-generation restaurant space explains how that choice affects the budget and timeline.
Equipment, furniture and fixtures
The signature open grill, hoods and fire suppression, refrigeration for the food bar, walk-in coolers, prep equipment, dishwashing, point-of-sale hardware, dining tables and seating, décor and signage all fall into this category. Some items may have to be bought from approved or designated suppliers, so check the disclosure document for required purchases.
Opening costs and working capital
Before opening, owners typically pay for training travel, hiring and pre-opening payroll, opening inventory of proteins, produce, noodles and sauces, insurance, deposits, permits and grand opening marketing. Item 7 also includes an additional funds estimate for the first months of operation. Treat that as a minimum and add your own cushion.
Ongoing Fees and How They Affect Your Loan
Like most franchise systems, HuHot charges ongoing fees after opening, typically a royalty and a contribution to marketing. The rates and how they are calculated are set out in Item 6 of the disclosure document.
Lenders size a HuHot franchise loan on the cash flow left after operating costs, and franchise fees come off the top. Food costs on an all-you-can-eat menu, labor for both the grill line and the dining room, rent, utilities, royalties and marketing contributions all need to be in your projections before you calculate how much debt the restaurant can support. If you leave the franchise fees out, your projections will overstate what the business can borrow and repay.
Franchisor Requirements for New Owners
HuHot does not publish minimum net worth or liquid capital requirements on its company website. Expect the franchisor to review your finances, management experience and market plans during the application process and to share its requirements directly.
Ways to Own a HuHot
Opening a new restaurant. A new HuHot means a new lease, a full build-out and a ramp-up period. Lenders underwrite a start-up on projections, your experience and your equity, so plan for a careful business plan and a working capital reserve. Our page on restaurant start-up financing outlines how new restaurants are typically funded.
Buying an existing HuHot. Because the system has been franchising for more than two decades, some restaurants may change hands as owners retire or sell. An existing restaurant has sales history, staff and a lease in place, which often makes it easier to finance than a new build. The franchisor generally has to approve the buyer and the transfer. See our articles on buying a franchise resale and franchise restaurant acquisition financing.
Financing Options for a HuHot Franchise
SBA 7(a) loans. SBA 7(a) loans are a common tool for restaurant start-ups and acquisitions because a single loan can cover leasehold improvements, equipment, the franchise fee, opening inventory and working capital, subject to program rules and lender approval.
SBA 504 loans. If you plan to buy the building or land for your restaurant, an SBA 504 loan pairs a bank loan with a loan through a certified development company and is designed for owner-occupied real estate and long-lived equipment.
Conventional term loans. Experienced restaurant operators with strong credit, liquidity and existing cash flow may qualify for conventional business loans. They can close on different terms than SBA loans and may be the main route if a franchise is not on the SBA Franchise Directory.
Equipment financing. The open grill, hoods and suppression system, refrigerated food bar, walk-in coolers, dish machine and point-of-sale system can sometimes be financed separately, using the equipment itself as collateral. Your primary lender will count that debt in its cash flow analysis.
Working capital and lines of credit. A HuHot needs cash for pre-opening payroll, training and marketing, plus a cushion for the first months while traffic builds. Existing restaurants may need working capital for slower seasons, food cost swings or repairs. Our page on restaurant working capital covers those needs.
Seller financing on resales. When buying an existing HuHot, a seller may sometimes agree to carry part of the price. Seller notes are typically subordinate to the primary loan, and SBA rules may limit how they are structured.
SBA Loans for HuHot Franchisees
SBA-backed loans are made by participating lenders with an SBA guarantee on part of the loan. When the borrower is a franchisee, the lender also has to confirm that the franchise relationship allows the borrower to control its own business. The SBA Franchise Directory lists brands whose agreements have already been reviewed for that purpose.
HuHot’s directory status. HuHot Mongolian Grill does not appear on the SBA Franchise Directory at the time of writing. That does not automatically make an owner ineligible for SBA financing, but it does mean a franchisee would generally need the brand to complete the SBA’s review process before an SBA loan could move forward. That can add time, so raise it early with the franchisor and any SBA lender you talk to.
If SBA is not an option. Conventional loans, equipment financing and, for resales, seller financing can be combined to fund a HuHot without an SBA guarantee. Borrowers on that route usually need stronger liquidity and more restaurant experience. The SBA 7(a) program maximum is currently $5 million, and program rules can change, so confirm current rules before you plan around them.
Application tips. Before you submit a HuHot franchise loan application, have the disclosure document, the franchise agreement or approval letter, the lease or letter of intent, contractor and equipment quotes, a sources and uses statement, personal financial statements, tax returns and résumés for every owner. Our article on how the FDD affects franchise financing explains which parts of the disclosure document lenders read most closely.
How Lenders Evaluate a HuHot Deal
Personal credit and financial history. Lenders review the credit history, tax returns and debts of each principal owner, and owners with a significant stake typically sign personal guarantees.
Net worth and liquidity. Expect questions about the cash you will put in and the reserves left after closing. A full-service restaurant with a large build-out draws on cash during construction and the opening months, so post-closing liquidity carries real weight.
Restaurant and management experience. Running a dining room, managing a kitchen team and controlling food cost on an all-you-can-eat format are skills lenders want to see. Owners without restaurant experience may strengthen a request with an experienced general manager or operating partner.
Business plan and projections. A plan supporting a HuHot franchise loan should explain the trade area, lunch and dinner traffic, takeout through online ordering, staffing for the grill line and dining room, food cost assumptions and the ramp-up period. Projections should include all franchise fees, rent and debt service.
The disclosure document and franchise agreement. Lenders review the agreement term, renewal and transfer rules, territory, required purchases and remodel obligations, and they want the loan term to fit within the franchise term.
Historical financials on resales. For an existing HuHot, expect lenders to study several years of tax returns and profit and loss statements, sales trends and the remaining lease and franchise term.
The Grill, the Food Bar and Equipment Planning
The HuHot experience depends on equipment that guests can see. The open grill is a working cooking surface and the visual center of the dining room, and it needs the right ventilation, fire suppression and utility capacity. The food bar has to hold raw proteins and produce safely while guests serve themselves. Equipment is therefore a larger share of the budget than at many counter-service concepts, and a breakdown can halt service, so plan for service contracts and a repair reserve. Itemized quotes help any restaurant equipment financing request.
Multi-Unit Growth and Development Agreements
Some owners open a second or third HuHot after the first restaurant is established. Financing that growth usually starts with the first unit’s results: lenders look at its cash flow, the owner’s remaining liquidity and whether the management team can run another dining room without hurting the first.
If the franchisor offers development rights for a market, the agreement will set a schedule for opening restaurants. Make sure that schedule matches what you can realistically finance, and keep separate financial statements for each restaurant.
Real-World Scenarios
A restaurant manager opening a first HuHot. A longtime full-service restaurant manager signs with HuHot and finds a second-generation restaurant space. Because the brand is not on the SBA Franchise Directory, the owner asks the franchisor about the SBA review early while also exploring a conventional loan with equipment financing for the grill and food bar.
A buyer taking over an existing HuHot. A buyer finds a HuHot whose owner is retiring. The restaurant’s tax returns and sales history support an acquisition loan, and the seller agrees to carry a small subordinate note. The buyer completes the franchisor’s transfer process before closing.
Common Mistakes to Avoid
- Building a budget from online estimates instead of the Item 7 table in the current disclosure document
- Underestimating the grill, hood and food bar costs, or assuming a former restaurant space will need little work
- Leaving royalties, marketing contributions and food cost on an all-you-can-eat menu out of your projections
- Assuming SBA financing is available without checking the brand’s directory status
- Signing a lease before franchisor site approval and financing are lined up
- Opening with too little working capital for the ramp-up period
For more, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your HuHot Franchise
Step 1: Request the disclosure document. Start the franchise process and review the current disclosure document with a franchise attorney, focusing on Items 5, 6, 7, 10, 17 and 19.
Step 2: Choose your path. Decide whether you are building a new restaurant or buying an existing one, since each path changes the budget and the loan structure.
Step 3: Build a realistic budget. Start with Item 7, then replace estimates with quotes for build-out, the grill, the food bar, other equipment, signage and opening costs, and add contingency and working capital.
Step 4: Talk with a financing specialist early. Confirm which structures fit, how the brand’s SBA directory status affects your options and how much cash you will need. Our SBA loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Step 5: Assemble your documents. Gather the loan package described in the FAQs below, starting with a business plan and projections.
Step 6: Coordinate approvals. Keep franchisor approval, site approval, the lease and the loan on aligned timelines so no single step holds up the others.
HuHot Franchise Loan FAQs
How much does it cost to open a HuHot Mongolian Grill?
HuHot does not publish its investment range on its public company pages. The franchisor’s estimate appears in Item 7 of the current disclosure document, and your actual cost will depend on your site, the size of the space and local construction prices.
What is the HuHot franchise fee?
The franchise fee is listed in Item 5 of the disclosure document and is not posted on the company’s public website. Ask the franchisor for the current disclosure document to confirm it.
How much net worth or liquid capital do I need?
HuHot does not publish minimums on its company website. The franchisor will share its requirements during the application process, and lenders will separately look at the cash you will invest and the reserves you have left after closing.
Can I get an SBA loan for a HuHot franchise?
HuHot is not on the SBA Franchise Directory at the time of writing. An SBA loan may still be possible once the brand completes the SBA’s review, but that can take time, so many buyers also explore conventional and equipment financing.
Can I finance the grill and food bar equipment separately?
Often, yes. Equipment financing or leasing can cover the grill, hoods, refrigeration and other kitchen equipment, with the equipment as collateral. Your primary lender will count those payments in its cash flow analysis.
Does HuHot offer financing to franchisees?
Item 10 of the disclosure document describes any financing the franchisor offers. Owners who do not use franchisor financing arrange their own loans.
Can I buy an existing HuHot instead of building one?
Yes, when an owner is selling. An existing restaurant gives lenders real sales history to underwrite, and the franchisor generally must approve the buyer and the transfer.
Can I open more than one HuHot?
Ask the franchisor about additional units or development rights. Lenders usually finance each new restaurant based on the results of the ones already open and your remaining liquidity.
What documents do I need for a loan?
Personal financial statements, tax returns, résumés, the disclosure document and franchise agreement, the lease or letter of intent, construction and equipment quotes and projections. Resales add the restaurant’s financial statements.
How long is the HuHot franchise agreement?
The term, renewal and transfer rules appear in the franchise agreement and Item 17 of the disclosure document. Lenders generally want the franchise term and the lease to run at least as long as the loan.
Final Thoughts
A HuHot franchise loan funds a distinctive, equipment-heavy restaurant with a full dining room, so the details matter: an accurate Item 7 budget, real quotes for the grill and food bar, a plan for the brand’s SBA directory status and enough working capital to reach steady traffic. Owners who sort those details out before they sign a lease give themselves the strongest footing with lenders.
US Professional Funding helps franchise buyers and restaurant owners finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing options.
