Famous Dave’s Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Famous Dave's is a barbecue franchise serving smoked ribs, brisket, chicken, and signature sauces via full-service, counter, and ghost-kitchen formats. Franchisees run restaurants managing smoking, service, and staffing.
FranchiseVerdict summary · 2026
A Famous Dave’s franchise requires a total initial investment of $1.3M – $2.9M, including a $45K franchise fee and an ongoing 5.0% royalty[2]. Per the 2026 FDD, average unit revenue was $2.9M[2]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $1.3M – $2.9M
- 35th pct Service Resta…
- Avg gross sales
- $2.9M
- 13th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 100
- 31st pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-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 $1.3M – $2.9M including a $45K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $2.9M/year (median $2.8M).
- RISKVerdict C (Average), verdict score 46/100 (higher is better).
- LEGAL16 litigation matters disclosed in Item 3, higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Famous Dave's of America, Inc.
- Parent company
- BBQ Holdings, Inc.
- Ultimate parent
- MTY Food Group, Inc.
- Predecessor
- The Extreme Pita Franchising USA, Inc. (predecessor in interest to MTY Franchising USA, Inc.)
- Prior franchisor entity
- CEO title
- Chief Executive Officer (of MTY, parent)
- Eric Lefebvre
- Incorporated in
- Minnesota
- HQ
- 12701 Whitewater Drive, Suite 100, Minnetonka, Minnesota 55343-4164
- Auditor
- PricewaterhouseCoopers (PwC)
- Audited financials
- Franchisor revenue
- $580.3M
- vs $263.7M prior year
Overview
About
- CEO
- Eric Lefebvre
- Headquarters
- Minnesota
- Founded
- 1994
- FDD year
- 2026
- States available
- 26
Can you afford it, and what does the money buy?
Entry cost runs 76% above the typical full-service restaurants franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $45K | $45K |
| Working capital (3–6 mo) | $5K | $10K |
| Equipment, build-out, other | $1.2M | $2.8M |
| Total initial investment | $1.3M | $2.9M |
Source: Famous Dave’s 2026 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
- $1.3M – $2.9M
- Top 40% of category vs category
- Liquid capital req'd
- $5K – $10K
- Top 40% of category vs category
- Franchise fee
- $45K – $45K
- Top 40% of category vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 6.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Transfer fee | $5K |
| Renewal fee | $23K |
| Total fee load | 6.5% of rev |
A 6.5% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 68% above the full-service restaurants norm.
Source: FDD 2026 · 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
$350K
12.0% margin
Unlevered ROIC
17%
EBITDA / total invested capital
Payback
5.9 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 Famous Dave’s unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
17%
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 Famous Dave’s units return on equity?
Equity IRR · 5-yr
34.8%
4.46× MOIC
Year-1 DSCR
2.34×
EBITDA ÷ debt service
Equity required
$5.2M
on $14.6M purchase
Total debt
$9.4M
SBA $5.0M + 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: 2026 FDD
Financial Performance
- Avg gross sales
- $2.9M
- Per unit, per year
- Median gross sales
- $2.8M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- historical actual
- Sample size
- 59 outlets
- vs category median 18 · large
- Range (low → high)
- $471K→$7.5M
- Cohort dispersion (min → max)
- Transparency tier
- revenue_only
- Categorical assessment of disclosure depth
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 3 / 10 · above
Compared against 805 Full-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 $2.9M/year in gross sales. Revenue-to-investment ratio: 1.4x.
Fee burden
Total ongoing fee load of 6.5% (near the Full-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 -23.1% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
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 Full-Service Restaurants averages
How Famous Dave’s Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 100
- Opened
- 0
- Last reporting year
- Closed
- 11
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.4%
- Company-owned
- 30
- Corporate units in the system
- % franchised
- 70%
- vs corporate-owned
- Net growth (3-yr)
- -23.1%
- Net unit change over 3 years
- 3-yr CAGR
- -23.1%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 11
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 25 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.
Available to sell in · Item 12
- California
- Illinois
- Indiana
- Michigan
- New York
- Rhode Island
- South Dakota
- Virginia
- Washington
- Wisconsin
States where the franchisor is registered to sell new franchises (FDD registration filings).
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 15
- Loan volume
- $19.3M
- Median loan
- $787K
- 50th percentile
- Charge-off rate
- N/A
- no resolved loans yet — rate needs a terminal outcome
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
- 14
- Defaults
- 1
- Typical loan rate
- 8.3%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7225
- Jobs supported
- 1,044
- 5.4 per loan
- Lender concentration
- 13%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Top lenders financing Famous Dave’s franchisees
Showing 3 of 14 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.
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
Famous Dave's presents HIGH RISK due to contracting unit base (-12% YoY), substantial litigation history involving franchise law violations, absence of financial transparency, lack of territorial protection, and unfavorable unit economics amid system decline.
Litigation (Item 3)
Numerous historical (mostly 2012-2021, now concluded) disputes involving Famous Dave's and MTY-affiliated brands (Extreme Pita, Kahala, SweetFrog, Papa Murphy's, Wetzel's Pretzels, VI BrandCo) including franchisee misrepresentation/FIPA claims, breach of contract, trademark infringement post-termination continued use, and state franchise-registration consent orders (Maryland, Virginia, New York). Three new suits filed by Kahala Franchising against franchisees in FY2025 (breach of contract, trademark infringement). No bankruptcy required to be disclosed for Famous Dave's itself.
Largest disclosed settlement: $4,000,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers (PwC)
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: No
- 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 46 / 100 verdict
- 01MINORDeclining unit count: 12% YoY contraction (116 units) suggests system-wide performance deterioration or franchisee exits
- 02HIGHSignificant litigation history: 16 concluded legal actions involving franchise law violations and misrepresentations indicate regulatory/compliance concerns and potential franchisor credibility issues
- 03MINORNo territory protection: Franchisees lack exclusive market rights, enabling cannibalization and direct franchisor competition
- 04MEDUndisclosed net income: Absence of Item 19 financial performance representation prevents realistic profitability assessment
- 05MINOR5% royalty on declining revenues: Franchisor revenue shrinking while franchisees bear fixed costs in contracting system
- 06MED10-year commitment term: Long lock-in period with limited exit flexibility in deteriorating franchise environment
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · 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 | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 1 year |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 14 days |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Arbitration location | Minneapolis, Minnesota (per California addendum reference); general dispute resolution per Article 23 of Franchise Agreement, governed by state where restaurant is located |
| Jury trial waiver | Yes |
| Governing law | State where the Restaurant is located (except where federal law applies) |
| Litigation count | 16 |
View Item 3 litigation summary
Numerous historical (mostly 2012-2021, now concluded) disputes involving Famous Dave's and MTY-affiliated brands (Extreme Pita, Kahala, SweetFrog, Papa Murphy's, Wetzel's Pretzels, VI BrandCo) including franchisee misrepresentation/FIPA claims, breach of contract, trademark infringement post-termination continued use, and state franchise-registration consent orders (Maryland, Virginia, New York). Three new suits filed by Kahala Franchising against franchisees in FY2025 (breach of contract, trademark infringement). No bankruptcy required to be disclosed for Famous Dave's itself.
Items 10, 11
Training & Operations
- Classroom training
- 75 hrs
- On-the-job training
- 300 hrs
- Training location
- Certified training location designated by Famous Dave's
- Ongoing training
- Required
- Time to open
- 24 mo
- From signing to launch
- Site selection
- Franchisee selects, Famous Dave's reviews/approves via Site Review Report and "no objection" letter
- Franchisor financing
- Offered
- Item 10
- POS system
- integrated front-of-house and back-of-house POS system
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: integrated front-of-house and back-of-house POS system
Item 20 · call current owners
Franchisee Contacts
109 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Famous Dave’s · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Famous Dave’s franchise?
The total investment to open a Famous Dave’s franchise ranges from $1.3M – $2.9M, with an initial franchise fee of $45K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Famous Dave’s franchise owners earn?
According to Item 19 of the Famous Dave’s FDD, the average gross sales per unit is $2.9M. The median is $2.8M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Famous Dave’s 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 Famous Dave’s FDD and qualifies whose outlets they describe.
What is Famous Dave’s's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Famous Dave’s (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 Famous Dave’s franchise locations are there?
As of their most recent FDD filing, Famous Dave’s has 100 total units in the United States, including 70 franchised units and 30 company-owned units.
Is Famous Dave’s a good franchise to buy?
FranchiseVerdict rates Famous Dave’s as a C-grade franchise with a verdict score of 46 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.