Erik’s DeliCafeFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Erik’s DeliCafe franchise requires a total initial investment of $201K – $552K, including a $35K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $851K[2]. SBA 7(a) loans show a 0.0% charge-off rate across 11 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $201K – $552K
- 10th pct Service Resta…
- Avg gross sales
- $851K
- 7th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 28
- 31st pct Service Resta…
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Only 0.0% of 11 SBA loans charged off, well below the 16% franchise average.
Franchising since 1986. Systems this mature have refined operations and brand recognition.
Bottom line
- Total investment $201K – $552K including a $35K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $851K/year (median $844K).
- Verdict A (Top Quintile) with a risk score of 13/100. SBA loan charge-off rate of 0.0% across 11 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- No protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Erik’s DeliCafe Franchises, Inc.
- Ultimate parent
- None
- CEO title
- CEO
- Brian E. Johnson
- CEO experience
- 2008 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- CA
- HQ
- 1550 The Alameda, Suite 330, San Jose, California 95126
- Auditor
- Dennis Duncan & Torchon LLP
- Audited financials
- Franchisor revenue
- $1.9M
- vs $1.9M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
Franchisees operate casual deli and cafe locations serving sandwiches, prepared foods, and beverages in walk-in or counter-service environments. Day-to-day operations include food preparation, inventory management, staffing, customer service, and local marketing to drive foot traffic and repeat business.
- CEO
- Brian E. Johnson
- Headquarters
- CA
- Founded
- 1973
- FDD year
- 2025
- States available
- 1
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $35K | $35K |
| Working capital (3–6 mo) | $10K | $30K |
| Equipment, build-out, other | $156K | $487K |
| Total initial investment | $201K | $552K |
Source: Erik’s DeliCafe 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
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
$89K
10.5% margin
Unlevered ROIC
23%
EBITDA / total invested capital
Payback
4.4 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $201K – $552K
- Better than avg vs category
- Liquid capital req'd
- $10K – $30K
- Better than avg vs category
- Franchise fee
- $3K – $35K
- Better than avg vs category
- Royalty
- 5.0%
- Gross Revenue · typical 6–8%
- Ad fund
- 2.5%
- typical 3–5%
- Total fee load
- 7.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.5% of gross sales |
| Transfer fee | $5K |
| Renewal fee | $3K |
| Total fee load | 7.5% of rev |
Financial Performance
- Avg gross sales
- $851K
- Per unit, per year
- Median gross sales
- $844K
- Item 19 type
- gross_sales
- Sample size
- 25 units
- vs category median 13
- Range (low → high)
- $444K→$1.3M
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 6 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Erik’s DeliCafe Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 28
- Opened
- 1
- 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
- 2
- Corporate units in the system
- % franchised
- 93%
- vs corporate-owned
- Net growth (yr3)
- +0.0%
- Net unit change last year
- 3-yr CAGR
- +0.0%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 1
- Projected new
- 3
- Franchisor's next-year forecast
- Transfer rate
- 3.6%
- Owners selling to other franchisees
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 5 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 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 11
- Loan volume
- $1.6M
- Median loan
- $140K
- 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
- N/A
- Loans approved 2021+
- Active lenders
- 5
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
With a 0.0% charge-off rate across 11 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Erik's DeliCafe presents CAUTION-level risk due to franchisor going concern status, opaque profitability despite $851K average revenue, tiny stagnant unit base, and unprotected territories—inadequate disclosure makes ROI validation impossible.
Litigation (Item 3)
Item 3 (Litigation) section is blank/not provided
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Dennis Duncan & Torchon LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- 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 13 / 100 rating
- 01HIGHGoing Concern status indicates potential financial distress or viability uncertainty at franchisor level
- 02MINORNo net income disclosure despite $851K average revenue — profitability unclear and concerning
- 03MINOROnly 28 units with unknown growth trajectory suggests stagnant or declining system
- 04MINORUnprotected territory creates direct competition risk from other franchisees in same market
- 05MEDHigh investment range ($201K-$551.5K) relative to undisclosed profitability is a major red flag
- 06HIGHNo litigation disclosed but going concern status may indicate underlying disputes or regulatory issues
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| 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 | 1 year |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | San Jose, California |
| Jury trial waiver | Yes |
| Governing law | California |
| Litigation count | 0 |
View Item 3 litigation summary
Item 3 (Litigation) section is blank/not provided
Items 10, 11
Training & Operations
- Classroom training
- 4 hrs
- On-the-job training
- 172 hrs
- Ongoing training
- Required
- POS system
- PAR Technology Corporation
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: PAR Technology Corporation
Item 20 · call current owners
Franchisee Contacts
33 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Erik’s DeliCafe · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Erik’s DeliCafe franchise?
The total investment to open a Erik’s DeliCafe franchise ranges from $201K – $552K, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Erik’s DeliCafe franchise owners earn?
According to Item 19 of the Erik’s DeliCafe FDD, the average gross sales per unit is $851K. The median is $844K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Erik’s DeliCafe's franchise failure rate?
Based on SBA 7(a) loan data, Erik’s DeliCafe has a charge-off rate of 0.0% across 11 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 Erik’s DeliCafe franchise locations are there?
As of their most recent FDD filing, Erik’s DeliCafe has 28 total units in the United States, including 26 franchised units and 2 company-owned units. 1 new units were opened in the latest reporting year.
Is Erik’s DeliCafe a good franchise to buy?
FranchiseVerdict rates Erik’s DeliCafe as a A-grade franchise with a risk score of 13 out of 100, 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.
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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.