From the filings
Software purchasing decisions at HobbyTown USA are driven from the top by founders Merlin P. Hayes and Thomas A. Walla. The franchise currently mandates SmartSuite POS and a Media Placement Service, creating a defined tech environment across its 94 franchised locations. With a -6.0% year-over-year unit growth, the addressable market is contracting, making every unit a critical sales target.
For software vendors selling into US franchise brands.
Live signals
Ongoing fee load
The recurring percentage of gross sales named in this filing, before rent, labour or any technology fee.
4.75%of gross sales (FY2025)
15% reference
Franchisor behaviours
20 requirements the franchisor states in this filing, each in its own words; 6 explicit no's; 8 questions the text does not settle, which is not a no.
Accounting
Must the franchisee use an accounting or bookkeeping system designated or approved by the franchisor?
YesFranchise agreement
Franchisee shall license and use the accounting software that is designated by Franchisor, as set forth in the Operations Manual or otherwise in writing, to prepare all financials and to perform all other accounting functions for the HobbyTown® Store at the Franchise Premises.
Does the franchisor have direct or independent electronic access to the franchisee's financial, sales or customer records?
YesItem 11
The Company will have independent access to the business information and data obtained by the POS software and the accounting software.
Must the franchisee submit periodic financial statements (monthly, quarterly or annual) to the franchisor?
YesFranchise agreement
On or before the twentieth (20th) day of each month, Franchisee shall deliver to Franchisor copies of all check registers, bank statements, accounts payable journals, and any other financial information (such as weekly sales reports, weekly payroll reports, weekly scheduling reports, and weekly purchases) requested…
How the franchisor buys
Is the franchisor or an affiliate itself a supplier of required products, services or systems?
YesItem 8
Except as expressly stated in this disclosure document, neither the Company nor any affiliate of the Company is currently an approved supplier or the only approved supplier of any required products and/or services.
Does the franchisor reserve the right to change designated suppliers or systems at any time?
YesItem 8
The Company reserves the right to change POS software, including substitution to different POS software, and You must comply with any such mandatory change.
How much revenue did the franchisor and its affiliates earn from franchisee purchases in the last fiscal year?
204722Item 8
The Company earned $204,722 in revenues from required purchases during fiscal year 2024, which constitutes approximately 5% of the Company’s total revenue for fiscal year 2024.
Item 8 gives this proportion in one of two shapes: separate percentages for establishing the business and for operating it, or one figure covering "establishing and operating" together. Where they are separate, answer with the operating percentage; where the passage gives only the combined figure, answer with that. What percentage of the franchisee's purchases must come from designated or approved suppliers?
60Item 8
The cost of required purchases made in accordance with the Company’s specifications will represent 60% to 75% of Your total purchases in establishing the business and 60% to 75% of Your total purchases during operation of the business.
Communications
Does the franchisor own or control the business telephone numbers, or take them over when the agreement ends?
YesFranchise agreement
Franchisee shall also assign to Franchisor or its nominee all of Franchisee's right, title and interest in and to all telephone numbers, telephone directory listings and classified advertisements which relate to the Franchise Premises.
Franchise management
Does the franchisor conduct periodic inspections, audits or evaluations of the franchised business?
YesFranchise agreement
Franchisor and/or its authorized representatives have the right at any time during business hours, and without prior notice to Franchisee, to examine, copy, and audit the books, accounts, tax returns and any and all other financial information of Franchisee, any Principal, or any Entity in which Franchisee or any…
Can the franchisor change the operations manual and brand standards unilaterally?
YesFranchise agreement
Franchisor reserves the sole and exclusive right to amend or FRANCHISE AGREEMENT 19 © OCTOBER 20, 2025 HOBBY TOWN UNLIMITED, INC. change the methods and procedures for conducting the operation of a HobbyTown® Store and the HobbyTown® System as set forth in the Operations Manual or otherwise.
Must the franchisor approve the franchisee's site or location before opening?
YesFranchise agreement
The location of the Franchise Premises shall be selected by Franchisee subject to the prior written approval of Franchisor.
Marketing
Is a minimum grand opening advertising spend required?
YesFranchise agreement
Franchisor shall make Franchisee’s initial placement of advertising with the Media Placement Service in the amount required by Franchisor for initial advertising, as specified by Franchisor in the Operations Manual or otherwise in writing.
Is the franchisee required to spend a minimum amount on local advertising or marketing, as a percentage of sales or a fixed amount?
YesItem 6
In satisfaction of the minimum advertising requirement, You will pay 2% of Your gross monthly sales to the Company, which will be held in reserve to draw from as You incur local advertising expenses.
Operations
Must the franchisee buy products from a designated distributor?
YesItem 8
Ongoing fixture purchases must be made directly through the Company’s designated third-party supplier.
Must equipment be purchased from designated or approved suppliers?
YesFranchise agreement
Franchisee shall be required to purchase some products and services directly from Franchisor or a third party as Franchisor may designate from time to time, and Franchisee may not purchase any of such items from vendors that Franchisor has not approved.
Payments
Are royalties and other fees collected by automatic bank debit (ACH or electronic funds transfer) from the franchisee's account?
YesFranchise agreement
Franchisee hereby authorizes Franchisor to utilize electronic means (such as a secured Internet connection, EFT, automatic debit, sweep, etc.) to access Franchisee’s Gross Sales information to comply with all reporting requirements and to FRANCHISE AGREEMENT 12 © OCTOBER 20, 2025 HOBBY TOWN UNLIMITED, INC. access…
Must the franchisee participate in a gift card program?
YesItem 11
You must participate in a gift card program by selling and redeeming the Company’s gift cards.
Point of sale
Must the franchisee use a specific point-of-sale system designated or approved by the franchisor?
YesFranchise agreement
Franchisee shall license and only use the point of sale (“POS”) software that is designated by Franchisor for use in the HobbyTown® System, which is subject to change in Franchisor’s sole discretion.
Does the franchisor have independent access to the data in the franchisee's POS or computer system?
YesItem 11
The Company will have independent access to the business information and data obtained by the POS software and the accounting software.
Training
Is attendance at an annual convention or conference mandatory for the franchisee?
YesItem 11
You and/or Your store manager are required to attend each convention.
HobbyTown USA presents a compact, 94-unit target for software vendors. The system is entirely franchised, with no company-owned locations on file, and is composed exclusively of single-unit operators. The franchise footprint is concentrated in Texas (8), Ohio (6), California (6), Colorado (6), and Washington (5). The average unit volume sits at $2,392,390, with a 4.75% royalty rate. Critically, the system contracted by -6.0% year-over-year, signaling a shrinking addressable market. For a vendor, this means the total available seats are limited and likely decreasing, making a high-win-rate strategy essential.
Purchasing authority is centralized. The Franchise Disclosure Document names only two executives: founders Merlin P. Hayes and Thomas A. Walla. With no parent company and no other HQ personnel listed, these two individuals constitute the entire known buying center. A vendor pitch must be directed squarely at this founder-level leadership. There are no multi-unit operators to act as secondary champions or decentralized buyers; all 84 mapped operators are single-unit franchisees, which typically means they have little to no autonomy in selecting core operational systems.
The 2025 FDD provides a narrow but concrete view of the technology environment. SmartSuite POS is a mandated system, meaning any point-of-sale or adjacent integration must account for this incumbent. A Media Placement Service is also mandated, likely governing local or national advertising channels. Creative Solutions is named in the same context, though the FDD extract does not specify whether it is a mandated or recommended system, nor its exact function. No other operational, financial, or HR platforms are disclosed. This creates a clear map: the POS is locked, but adjacent categories like inventory management, e-commerce, workforce management, or business intelligence may be open for displacement or net-new insertion.
The procurement model remains opaque. Item 8 of the FDD, which typically outlines whether the franchisor designates exclusive suppliers or maintains an approved vendor list, provided no extract for analysis. This lack of data means a vendor cannot assume an open or closed procurement environment without direct discovery. Similarly, contract renewal timing is a blind spot. The initial franchise term length is not disclosed, and Item 17, which governs renewal conditions, also provided no extract. Without term or renewal data, there is no predictable window for when franchisees might be compelled to re-evaluate their tech stack. Vendors must rely on outbound triggers like unit closures, ownership transfers, or direct HQ engagement.
The full 2025 Franchise Disclosure Document is the authoritative source for verifying the claims made here. It contains the legal and operational disclosures filed by the franchisor, including detailed breakdowns of Item 11 (mandated tech), Item 8 (procurement restrictions), and Item 17 (renewal terms). The embedded viewer below provides the complete document. For a vendor, the FDD is a due diligence tool, not a sales deck. It tells you who holds the power, what systems are entrenched, and where the contractual leverage points exist. Use it to pressure-test your total addressable market assumptions before building a pitch. For a ranked target list of franchise systems that match your ideal customer profile, FranCloud can help.
Questions vendors ask
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FDD alert
We’ll email you the moment HobbyTown USA files a new annual FDD, usually the freshest signal of a vendor change.
Operator footprint
84 operators run 84 mapped locations. 0 of them are multi-unit. Aggregate counts from the filing; no names.
Operators by units owned
Top states by locations
| TX | 8 |
|---|---|
| OH | 6 |
| CA | 6 |
| CO | 6 |
| WA | 5 |
Ownership
unknown of amain com.
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Primary franchise filings · updated June 2026. Every figure is source-traceable and QA-checked.