Deli Delicious Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Deli Delicious is a quick-service franchise serving made-to-order deli sandwiches, wraps, and salads. Franchisees run the shops, managing food prep, staffing, and counter service.
FranchiseVerdict summary · 2026
A Deli Delicious franchise requires a total initial investment of $227K – $474K, including a $25K – $30K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $549K[2]. SBA 7(a) loans show a 18.8% charge-off rate across 21 loans[1]. FranchiseVerdict grade: F (Weakest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $227K – $474K
- 32nd pct Service Resta…
- Avg gross sales
- $549K
- 4th pct Service Resta…
- Royalty
- 6.0%
- 46th pct Service Resta…
- Units
- 44
- 64th pct Service Resta…
- SBA charge-off
- 18.8%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants 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 $227K – $474K including a $25K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $549K/year (median $551K).
- RISKVerdict F (Weakest tier), verdict score 23/100 (higher is better). SBA loan charge-off rate of 18.8% across 21 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- DECLINESystem contracting at -13.7% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Deli Delicious Franchising, Inc.
- Predecessor
- Deli Delicious (sole proprietorship, Mohammad Hobab, est. 1996)
- Prior franchisor entity
- CEO title
- President, Secretary and Director
- Hesam Hobab
- Incorporated in
- CA
- HQ
- 2495 West Shaw Ave., Fresno, California 93711
- Auditor
- Kawana & Gong, LLP
- Audited financials
- Franchisor revenue
- $2.0M
- vs $1.6M prior year
Overview
About
- CEO
- Hesam Hobab
- Headquarters
- CA
- Founded
- 2008
- FDD year
- 2025
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost runs 47% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $25K | $25K |
| Working capital (3–6 mo) | $15K | $30K |
| Equipment, build-out, other | $187K | $419K |
| Total initial investment | $227K | $474K |
Source: Deli Delicious 2025 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
- $227K – $474K
- Top 40% of category vs category
- Liquid capital req'd
- $15K – $30K
- Top 40% of category vs category
- Franchise fee
- $25K – $30K
- Top 40% of category vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 2.5%
- typical 3–5%
- Total fee load
- 8.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.5% of gross sales |
| Technology fee | $300 |
| Transfer fee | $8K |
| Renewal fee | $15K |
| Inventory (initial) | $3K – $6K |
| Total fee load | 8.5% of rev |
What do units actually make?
Average unit sales run 55% below the quick-service restaurants norm.
Source: FDD 2025 · 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
$74K
13.5% margin
Unlevered ROIC
20%
EBITDA / total invested capital
Payback
5.0 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 Deli Delicious unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
20%
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%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Deli Delicious units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$713K
on $3.6M purchase
Total debt
$2.9M
SBA $1.8M + senior + seller note
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
- Avg gross sales
- $549K
- Per unit, per year
- Median gross sales
- $551K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Sample size
- 42
- vs category median 20 · large
- Range (low → high)
- $298K→$891K
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 782 Quick-Service Restaurants 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 $549K/year in gross sales. Revenue-to-investment ratio: 1.6x.
Fee burden
Total ongoing fee load of 8.5% (near the Quick-Service Restaurants average).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -13.7% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Multi-unit rate
Only 20% 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 Quick-Service Restaurants averages
How Deli Delicious Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 44
- Opened
- 2
- Last reporting year
- Closed
- 5
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 29.5%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Multi-unit owners
- 20.0%
- Net growth (3-yr)
- -13.7%
- Net unit change over 3 years
- 3-yr CAGR
- -13.7%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 5
- Closed (3yr)
- 9
- Terminated (3yr)
- 3
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 10
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 2 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
2
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 21
- Loan volume
- $6.5M
- Median loan
- $228K
- 50th percentile
- Charge-off rate
- 18.8%
- 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)
- 81.3%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 9
- Defaults
- 3
- Typical loan rate
- 6.5%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand above franchise avg ↑
- Jobs supported
- 325
- 5.0 per loan
- Lender concentration
- 33%
- top lender's share
Borrower mix: 33% went to startups / new businesses, 67% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Vintage analysis
Deli Delicious charge-off rate by loan vintage
Top lenders financing Deli Delicious franchisees
Showing 3 of 9 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Deli Delicious's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 9 lenders with concentration factor
- Per-state charge-off rates across 1 states
- Startup risk premium and job creation velocity
- 10-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 18.8% — 17% above the 16.0% national norm, i.e. higher 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
Deli Delicious presents meaningful investment risk due to shrinking unit base, undisclosed profitability data, recent litigation, and franchisor financial concerns despite moderate average unit volumes.
Litigation (Item 3)
Six cases disclosed: (1) Tim Campbell v. DDF et al. (defamation, interference; pending trial Sept 2022); (2) DDF v. Namdarian/Akoo (bread vendor compliance; settled Feb 2022); (3) DDF v. Misaghi (bread/signage compliance; cross-complaint pending arbitration); (4) Sanches v. DDF (false advertising; trial Feb 2023); (5) DDF v. Hadi Hobab (defamation; dismissed 2021); (6) DDF v. Kharazi et al. (breach of fiduciary duty by former attorneys; pending).
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Kawana & Gong, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 23 / 100 verdict
- 01MINORUnit count declining 4.5% YoY indicates system contraction and potential franchisee dissatisfaction
- 02MEDNet income not disclosed in Item 19 prevents accurate ROI assessment despite $548,705 average revenue
- 03HIGHTwo litigation cases (one settled for $60,000) suggest operational or compliance issues within the system
- 04HIGHGoing Concern status is False, indicating potential financial instability of franchisor
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.5% 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 | 15 years |
|---|---|
| Renewal term | 15 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 5 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | Yes |
| Arbitration location | Fresno County, California |
| Jury trial waiver | No |
| Governing law | CA |
| Litigation count | 6 |
View Item 3 litigation summary
Six cases disclosed: (1) Tim Campbell v. DDF et al. (defamation, interference; pending trial Sept 2022); (2) DDF v. Namdarian/Akoo (bread vendor compliance; settled Feb 2022); (3) DDF v. Misaghi (bread/signage compliance; cross-complaint pending arbitration); (4) Sanches v. DDF (false advertising; trial Feb 2023); (5) DDF v. Hadi Hobab (defamation; dismissed 2021); (6) DDF v. Kharazi et al. (breach of fiduciary duty by former attorneys; pending).
Items 10, 11
Training & Operations
- Classroom training
- 43 hrs
- On-the-job training
- 90 hrs
- Training location
- Corporate headquarters, Fresno, California
- Ongoing training
- Required
- Field support
- 5 hrs/yr
- On-site visits per year
- Site selection
- Franchisor must approve site; franchisee selects with approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Approved POS system (specifications provided by franchisor)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Approved POS system (specifications provided by franchisor)
Item 20 · call current owners
Franchisee Contacts
33 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Deli Delicious · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Deli Delicious franchise?
The total investment to open a Deli Delicious franchise ranges from $227K – $474K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Deli Delicious franchise owners earn?
According to Item 19 of the Deli Delicious FDD, the average gross sales per unit is $549K. The median is $551K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Deli Delicious 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 Deli Delicious FDD and qualifies whose outlets they describe.
What is Deli Delicious's franchise failure rate?
Based on SBA 7(a) loan data, Deli Delicious has a charge-off rate of 18.8% across 21 loans, meaning 18.8% 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 Deli Delicious franchise locations are there?
As of their most recent FDD filing, Deli Delicious has 44 total units in the United States, including 44 franchised units and 0 company-owned units. 2 new units were opened in the latest reporting year.
Is Deli Delicious a good franchise to buy?
FranchiseVerdict rates Deli Delicious as a F-grade franchise with a verdict score of 23 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?
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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.