American Freight Franchise Cost, Revenue & Review 2026
- Investment
- $497K – $943K
- Disclosed sales
- $1.7M
- gross sales, not profit
- SBA charge-off
- Under 10 loans (2)
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 →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: high - issued more than two years ago
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 scored5 of 5 headline figures on this page cite a page of the filing.
Overview
- Investment
- $497K – $943K
- 42nd pct Retail
- Avg gross sales
- $1.7M
- 1 outlet
- 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 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 $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).
- GROWTHPositive: net +4 franchised outlets in the latest year (4 opened, 0 closed); 6 signed but not yet open (Item 20).
- FLAGRevenue data based on only 1 outlet. 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
- FDD Item 1, page 9 of the 2023 FDD
- Ultimate parent
- Franchise Group, Inc. (FRG)
- FDD Item 1, page 9 of the 2023 FDD
- 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
Same owner · FDD Item 1, page 9
1 other brand on this site name Franchise Group, Inc. (FRG) as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2023 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
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 115% 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%
- 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 108% above the retail norm.
Based on a single outlet - not a system average
Source: FDD 2023 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for AMERICAN FREIGHT until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for ad fund 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.
Total invested capital · disclosed
$845K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own 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?
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 ad fund 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.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for ad fund 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.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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 outlet - 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
- Gross Sales for the single franchised outlet open a full year, stated in the narrative rather than a table; the FPR's tables report Net Income and expenses for COMPANY-OWNED businesses, which is not the figure published here
- Sample size
- 1 outlet
- vs category median 46 · 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% — above the Retail median of 8.0%.
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 outlet — 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 medians
How American Freight Compares
Category median of published Retail 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 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
- N/A
- 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
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 6
- 0.02 per open outlet · Item 20 Table 5
- Projected new
- 10
- Franchisor's next-year forecast
- 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.
Where the owners are · Item 20 owner list
13 current owners across 9 states.
- TX 3
- FL 2
- OH 2
- GA 1
- MI 1
- MO 1
- PA 1
- VA 1
- WI 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.
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
- Under 10 loans (2)
- Insufficient SBA coverage: 2 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (2)
- 5-yr charge-off
- Under 10 loans (2)
- 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
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
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)
Item 21 attaches the audited CONSOLIDATED financial statements of the parent/guarantor, Franchise Group, Inc. (FRG), not the franchisor (American Freight Franchisor, LLC), which has no standalone audited statements. FRG guarantees the franchisor's obligations. All figures from the FY ended 12/31/2022 consolidated statements, originally stated in thousands and converted to whole dollars (x1000). Total assets 3,630,412K = liabilities 3,209,032K + total equity 421,380K (reconciles). FY2022 net loss of $(68,573)K. Revenue yr1=FY2022 total revenues $4,397,832K; yr2=FY2021 $3,255,204K. Other revenue is Rental revenue $29,580K (Service-and-other was $535,961K). Note: the franchisor entity itself reported total revenues of $3,206,703 (whole dollars) per Item 1, but that is unaudited and not the Item 21 statement.
ⓘ 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 territory |
| 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
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 outlet - not a system average. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns AMERICAN FREIGHT?
AMERICAN FREIGHT is franchised by American Freight Franchisor, LLC. Its parent company is Franchise Group Newco S, LLC. The ultimate parent named in the FDD is Franchise Group, Inc. (FRG). Source: FDD Item 1, 2023 filing.
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). 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.