American Freight Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
American Freight is a discount-retail franchise selling furniture, mattresses, and appliances with in-house financing. Franchisees run warehouse-style stores managing inventory, sales, and customer financing.
FranchiseVerdict summary · 2026
A AMERICAN FREIGHT franchise requires a total initial investment of $497K – $943K, including a $50K franchise fee and an ongoing 5.0% royalty[2]. Per the 2023 FDD, average unit revenue was $1.7M[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2023 FDD issuance
Overview
- Investment
- $497K – $943K
- 42nd pct Retail
- Avg gross sales
- $1.7M
- n=116th pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 260
- 36th pct Retail
- SBA charge-off
- N/A
Quick verdict · Retail · color = vs category peers
Green = favorable by >10% vs Retail 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 $497K – $943K including a $50K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.7M/year.
- RISKVerdict A (Strongest tier), verdict score 71/100 (higher is better).
- FLAGRevenue data based on only 1 reporting unit. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- American Freight Franchisor, LLC
- Parent company
- Franchise Group Newco S, LLC
- Ultimate parent
- Franchise Group, Inc. (FRG)
- CEO title
- Chief Executive Officer Home Furnishings Segment
- Peter Corsa
- Incorporated in
- DE
- HQ
- 109 Innovation Court, Suite J, Delaware, Ohio 43015
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $4.4B
- vs $3.3B prior year
Overview
About
- CEO
- Peter Corsa
- Headquarters
- OH
- Founded
- 2020
- FDD year
- 2023
- States available
- 31
Can you afford it, and what does the money buy?
Entry cost runs 74% above the typical retail franchise.
Source: FDD 2023 · Items 5–7
FDD Item 7 · 2023 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $75K | $175K |
| Equipment, build-out, other | $372K | $718K |
| Total initial investment | $497K | $943K |
Source: AMERICAN FREIGHT 2023 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $497K – $943K
- Middle of category vs category
- Liquid capital req'd
- $75K – $175K
- Middle of category vs category
- Franchise fee
- $50K – $50K
- Top 40% of category vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- $1,638.46 per week; if monthly sales exceed $142,000, las…
- Total fee load
- 10.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Technology fee | $346 |
| Training fee | $2K |
| Transfer fee | $2K |
| Renewal fee | $50 |
| Inventory (initial) | $250K – $350K |
| Total fee load | 10.0% of rev |
What do units actually make?
Average unit sales run 73% above the retail norm.
Based on a single reporting unit - not a system average
Source: FDD 2023 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$117K
7.0% margin
Unlevered ROIC
14%
EBITDA / total invested capital
Payback
7.2 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one AMERICAN FREIGHT unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
14%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
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: 2023 FDD
Financial Performance
Based on a single reporting unit - not a system average
- Avg gross sales
- $1.7M
- Per unit/yr · from the Item 19 franchised-cohort breakdown (no single system-wide average disclosed)
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- net income by band
- Sample size
- 1
- vs category median 47 · small
- Reporting year
- 2022
- Fiscal year the figures cover
- Source filing
- FDD 2023
- Disclosed in the 2023 filing, covering 2022
- Transparency
- 8 / 10
- vs category median 3 / 10 · above
Compared against 278 Retail brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.7M/year in gross sales. Revenue-to-investment ratio: 2.3x.
Fee burden
Total ongoing fee load of 10.0% (near the Retail average).
Disclosure
Transparency score 8/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence. Sample size of 1 unit — treat as directional only.
Operator retention
Net unit growth of +400.0% over 3 years (4 opened, 0 closed).
Multi-unit rate
Only 1% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
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 Retail averages
How American Freight Compares
Is the system healthy?
Source: FDD 2023 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 260
- Opened
- 4
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 255
- Corporate units in the system
- % franchised
- 2%
- vs corporate-owned
- Multi-unit owners
- 1.0%
- Net growth (3-yr)
- Outlier (see FDD)
- Likely small-sample artifact
3-year detail · Item 20
- Opened (3yr)
- 4
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Ceased ops
- 2.3%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 9 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.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 2 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 2
- Loan volume
- $1.4M
- Median loan
- $700K
- 50th percentile
- Charge-off rate
- N/A
- limited sample (2 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 1
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
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
American Freight represents HIGH RISK due to negative franchisee profitability, unsustainable 400% growth masking unit economics problems, going concern status, corporate litigation history, and unprotected territories—creating a business model where most franchisees lose money despite significant capital investment.
Litigation (Item 3)
2 matters disclosed both related to Buddy's affiliate: (1) MMS Group LLC v. Buddy's Franchising AAA arbitration (pending); (2) In the Matter of Buddy's Newco LLC FTC Matter No. 191 0074 (concluded). No litigation required to be disclosed for American Freight Franchisor, LLC.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 71 / 100 verdict
- 01MINORExplosive 400% YoY unit growth is unsustainable and suggests aggressive recruitment masking underlying unit economics problems
- 02MINORNo going concern status raises questions about corporate financial stability and ability to support franchisees
- 03MINORUnprotected territory creates direct competition between franchisees and corporate expansion
- 04HIGHAffiliate litigation (Buddy's) involving breach of contract and FTC antitrust settlement indicates corporate governance and competitive practice concerns
- 05MINORHigh initial investment ($496k-$943k) paired with negative profitability creates severe capital recovery risk
- 06MINOR5% royalty on gross sales is relatively high given franchisees operate at a loss
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 10.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2023 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 20 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Delaware, Ohio |
| Jury trial waiver | Yes |
| Governing law | DE |
| Litigation count | 2 |
View Item 3 litigation summary
2 matters disclosed both related to Buddy's affiliate: (1) MMS Group LLC v. Buddy's Franchising AAA arbitration (pending); (2) In the Matter of Buddy's Newco LLC FTC Matter No. 191 0074 (concluded). No litigation required to be disclosed for American Freight Franchisor, LLC.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 30 hrs
- Training location
- Delaware, Ohio and franchisee store location
- Ongoing training
- Required
- Time to open
- 4 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Computer System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Computer System
Item 20 · call current owners
Franchisee Contacts
13 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
AMERICAN FREIGHT · FDD (2023) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a AMERICAN FREIGHT franchise?
The total investment to open a AMERICAN FREIGHT franchise ranges from $497K – $943K, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do AMERICAN FREIGHT franchise owners earn?
According to Item 19 of the AMERICAN FREIGHT FDD, the average gross sales per unit is $1.7M. Important context: Based on a single reporting unit - not a system average. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the AMERICAN FREIGHT 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 AMERICAN FREIGHT FDD and qualifies whose outlets they describe.
What is AMERICAN FREIGHT's franchise failure rate?
SBA 7(a) loan charge-off data is not available for AMERICAN FREIGHT (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 AMERICAN FREIGHT franchise locations are there?
As of their most recent FDD filing, AMERICAN FREIGHT has 260 total units in the United States, including 5 franchised units and 255 company-owned units. 4 new units were opened in the latest reporting year.
Is AMERICAN FREIGHT a good franchise to buy?
FranchiseVerdict rates AMERICAN FREIGHT as a A-grade franchise with a verdict score of 71 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 AMERICAN FREIGHT, you can request corrections or provide updated information.
Other Retail franchises
Compare similar franchise opportunities in the Retail category
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.