986 Pharmacy Franchise Cost, Revenue & Review 2026
- Investment
- $280K – $671K
- Disclosed sales
- not disclosed
- SBA charge-off
- Limited · 10 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
986 Pharmacy is an independent community pharmacy franchise offering prescriptions, compounding, and vaccinations. Franchisees own and operate the pharmacies, managing pharmacists, dispensing, insurance billing, and compliance.
FranchiseVerdict summary · 2026
A 986 Pharmacy franchise requires a total initial investment of $280K – $671K, including a $75K franchise fee. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored3 of 4 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $280K – $671K
- 57th pct Healthcare
- Avg gross sales
- N/A
- Royalty
- Flat fee
- Units
- 44
- 53rd pct Healthcare
- SBA charge-off
- N/A
Quick verdict · Healthcare · color = vs category peers
Green = favorable by >10% vs Healthcare median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $280K – $671K including a $75K franchise fee.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict B (Above average), verdict score 69/100 (higher is better).
- GROWTHPositive: net +14 franchised outlets in the latest year (15 opened, 1 closed) (Item 20).
- GROWTHSystem growing at 333.3% CAGR over 3 years with 44 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- 986 Degrees Corporation
- Predecessor
- None
- Prior franchisor entity
- CEO title
- Co-Founder, Chief Executive Officer, Director of Training, Director
- Khanh-Long Thai
- Incorporated in
- California
- HQ
- 2476 Huntington Dr., San Marino, CA 91108
- Auditor
- Mutschler Accountancy Corporation
- Audited financials
- Franchisor revenue
- $3.5M
- vs $1.5M prior year
Overview
About
- CEO
- Khanh-Long Thai
- Headquarters
- CA
- Founded
- 2014
- FDD year
- 2025
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost runs 48% above the typical healthcare franchise.
Source: FDD 2025 · Items 5–7
The filing's Item 7 TOTAL row prints $279,700 to $671,000. Its own line items add to $319,700 to $696,000. The total is shown as the franchisor printed it; the lines are listed as printed. Single Item 7 table (heading on p15, rows pp16-17). Printed Total $279,700 to $671,000 = headline.
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $75K | $75K | |
| Furniture Fixtures and Equipment | $20K | $120K | |
| Tenant Improvements | $15K | $150K | |
| Computer System | $3K | $12K | |
| Rent deposit | $0 | $20K | |
| Insurance | $2K | $8K | |
| Inventory | $65K | $110K | |
| Professional License fee | $1K | $2K | |
| Travel, Food and Lodging while attending training | $2K | $5K | |
| Signage | $1K | $10K | |
| Pre-opening Advertising | $1K | $10K | |
| Professional Services | $5K | $15K | |
| Additional Funds - First 3 months | $130K | $160K | |
| Total initial investment | $320K | $696K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $280K – $671K
- Middle of category vs category
- Liquid capital req'd
- $130K – $160K
- Bottom third — review vs category
- Franchise fee
- $75K – $75K
- Bottom third — review vs category
- Royalty
- Continuing License Fee: $1,575/month for first 12 months,…
- Ad fund
- 0.0%
- typical 3–5%
- Total fee load
- 0.3%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty (flat) | Continuing License Fee, monthly flat fee escalating from $1,575 to $2,100 per month |
| Marketing / ad fund | 0.0% |
| Transfer fee | $5K |
| Renewal fee | $2K |
| Inventory (initial) | $65K – $110K |
| Total fee load | 0.3% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
986 Pharmacy makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one 986 Pharmacy unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, royalty rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 0.3% — below the Healthcare median of 8.0%.
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System expanding at 333.3% CAGR over 3 years across 44 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Healthcare medians
How 986 Pharmacy Compares
Category median of published Healthcare brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 44
- Opened
- 15
- Last reporting year
- Closed
- 1
- Turnover rate
- 2.6%
- Company-owned
- 5
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- Outlier (see FDD)
- Likely small-sample artifact
- 3-yr CAGR
- Outlier (see FDD)
- Likely small-sample artifact
Last fiscal year · Item 20 exits and transfers
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 10
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 3 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
36 current owners across 3 states.
- CA 32
- NV 3
- TX 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 10
- Loan volume
- $5.3M
- Median loan
- $350K
- 50th percentile
- Charge-off rate
- Limited · 10 loans
- Limited SBA coverage: 10 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 10 loans
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 1
- Defaults
- 0
- Typical loan rate
- 6.4%
- avg rate to borrowers
- Franchised industry avg
- 6.7%
- n=462 loans
- Jobs supported
- 82
- 1.8 per loan
- Lender concentration
- 100%
- top lender's share
Borrower mix: 22% went to startups / new businesses, 78% to established operators
Franchise vs independent — in pharmacies and drug stores, franchised businesses charge off at 6.7% vs 6.7% for independents
Top lenders financing 986 Pharmacy franchisees
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for 986 Pharmacy from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 77%
- Avg interest rate
- 6.39%
- Lender concentration
- 100.0%
- Job velocity
- 1.8 per $100K
- NAICS benchmark
- 5.7%
- NAICS 446110
- Jobs supported
- 82
Top SBA lendersTop lender holds 100% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | East West Bank | 9 | $4.5M | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| CACalifornia | 7 | 0 | 0.0% |
| NVNevada | 1 | 0 | -- |
| TXTexas | 1 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
986 Pharmacy presents significant financial opacity and regulatory credibility issues, compounded by unprotected territories and escalating fees, making this a high-risk investment without disclosed performance benchmarks.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
Two Item-3 disclosures, both California State Board of Pharmacy disciplinary actions against current directors: (1) Quang Khanh Thai — 3-year probation of pharmacist license starting Jan 23, 2020 (Accusation No. 6373), since completed/reinstated; (2) Henry Hung Yat Chang — 5-year probation starting Dec 3, 2019 (Accusation No. 6176), since completed/reinstated.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Mutschler Accountancy Corporation
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Item 21 states audited financial statements for FYE Dec 31 2024/2023/2022 are attached as Exhibit E, but the actual audited statements (balance sheet, income statement, auditor name) are not present in the provided OCR text, so no figures could be extracted.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 69 / 100 verdict
- 01MINORNo financial disclosure (Item 19) — average revenue and net income not provided, making ROI impossible to validate
- 02MINORTwo senior directors (including likely owner/operator) had pharmacy license probation (2019-2020) — raises compliance and management credibility concerns
- 03MINORUnprotected territory — franchisees face direct competition from other 986 Pharmacy locations and independent pharmacies
- 04MEDHigh initial investment ($279K-$671K) with no disclosed profitability benchmarks to justify risk
- 05MINORRapid unit growth (56% YoY) with only 44 total units — suggests aggressive expansion without mature proven model
- 06MEDEscalating royalties ($1,650→$2,100/month, 27% increase) may compress already-undisclosed margins
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 0.3% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 14 days |
| Curable defaultsℹ | 7 |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles, California |
| Jury trial waiver | Yes |
| Governing law | California |
| Litigation count | 2 |
View Item 3 litigation summary
Two Item-3 disclosures, both California State Board of Pharmacy disciplinary actions against current directors: (1) Quang Khanh Thai — 3-year probation of pharmacist license starting Jan 23, 2020 (Accusation No. 6373), since completed/reinstated; (2) Henry Hung Yat Chang — 5-year probation starting Dec 3, 2019 (Accusation No. 6176), since completed/reinstated.
Items 10, 11
Training & Operations
- Classroom training
- 125 hrs
- On-the-job training
- 80 hrs
- Training location
- Designated/affiliate pharmacies in the Los Angeles and El Monte, California area; may also be via teleconference
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Digital Rx
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Digital Rx
Item 20 · call current owners
Franchisee Contacts
36 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a 986 Pharmacy franchise?
The total investment to open a 986 Pharmacy franchise ranges from $280K – $671K, with an initial franchise fee of $75K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do 986 Pharmacy franchise owners earn?
986 Pharmacy makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns 986 Pharmacy?
986 Pharmacy is franchised by 986 Degrees Corporation. The FDD names no parent company. Source: FDD Item 1, 2025 filing.
What is Item 19 in the 986 Pharmacy FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the 986 Pharmacy FDD and qualifies whose outlets they describe.
What is 986 Pharmacy's franchise failure rate?
SBA 7(a) loan charge-off data is not available for 986 Pharmacy (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many 986 Pharmacy franchise locations are there?
As of their most recent FDD filing, 986 Pharmacy has 44 total units in the United States, including 39 franchised units and 5 company-owned units. 15 new units were opened in the latest reporting year.
Is 986 Pharmacy a good franchise to buy?
FranchiseVerdict rates 986 Pharmacy as a B-grade franchise with a verdict score of 69 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.