986 Pharmacy Franchise Cost, Revenue & Review 2026
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. The 2025 FDD does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 0.0% charge-off rate across 10 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $280K – $671K
- 58th pct Healthcare
- Avg gross sales
- N/A
- Royalty
- N/A
- Units
- 39
- 52nd pct Healthcare
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Healthcare · color = vs category peers
Green = favorable by >10% vs Healthcare avg · 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.
- RETURNSItem 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.
- RISKVerdict A (Strongest tier), verdict score 68/100 (higher is better). SBA loan charge-off rate of 0.0% across 10 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHSystem growing at 333.3% CAGR over 3 years with 39 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- 986 Degrees Corporation
- Parent company
- None
- 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 15% above the typical healthcare franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $75K | $75K | |
| Furniture Fixtures and Equipment | $20K | $120K | |
| Tenant Improvements | $15K | $150K | |
| Computer System | $3K | $12K | |
| Rent deposit | $0 | $20K | |
| Insurance | $2K | $8K | |
| Inventorynot refundable | $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% of gross sales |
| 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 did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one 986 Pharmacy unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
23%
Below the 30–60% attractive-franchise band
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
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.
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 average of 8.8%.
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
Operator retention
System expanding at 333.3% CAGR over 3 years across 39 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 averages
How 986 Pharmacy Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 39
- Opened
- 15
- Last reporting year
- Closed
- 1
- Turnover rate
- 2.6%
- Company-owned
- 0
- 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
3-year detail · Item 20
- Opened (3yr)
- 15
- Closed (3yr)
- 0
- Terminated (3yr)
- 1
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
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.
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
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 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%
- brand beats franchise avg ↓
- 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.
Premium insight
SBA Lending Report
Deep-dive into 986 Pharmacy's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 1 lenders with concentration factor
- Per-state charge-off rates across 3 states
- Startup risk premium and job creation velocity
- 6-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 0.0% charge-off rate across 10 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
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)
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)
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 68 / 100 verdict
- 01MINORNo financial disclosure (Item 19) — average revenue and net income not provided, making ROI impossible to validate
- 02HIGHGoing Concern status is FALSE — indicates potential financial instability or regulatory concerns at corporate level
- 03MINORTwo senior directors (including likely owner/operator) had pharmacy license probation (2019-2020) — raises compliance and management credibility concerns
- 04MINORUnprotected territory — franchisees face direct competition from other 986 Pharmacy locations and independent pharmacies
- 05MEDHigh initial investment ($279K-$671K) with no disclosed profitability benchmarks to justify risk
- 06MINORRapid unit growth (56% YoY) with only 44 total units — suggests aggressive expansion without mature proven model
- 07MEDEscalating 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 | none |
| 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
FDD download
986 Pharmacy · FDD (2025) PDF
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 does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
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?
Based on SBA 7(a) loan data, 986 Pharmacy has a charge-off rate of 0.0% across 10 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many 986 Pharmacy franchise locations are there?
As of their most recent FDD filing, 986 Pharmacy has 39 total units in the United States, including 39 franchised units and 0 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 A-grade franchise with a verdict score of 68 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. 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
Are you the franchisor?
If you represent 986 Pharmacy, you can request corrections or provide updated information.
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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.