Fat Shack Franchise Cost, Revenue & Review 2026
- Investment
- $183K – $488K
- Disclosed sales
- $671K
- gross sales, not profit
- SBA charge-off
- Under 10 loans (3)
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Fat Shack is a late-night quick-service franchise known for indulgent overstuffed sandwiches, burgers, and loaded fries. Franchisees run the restaurants, managing food prep, staffing, and delivery.
FranchiseVerdict summary · 2026
A Fat Shack franchise requires a total initial investment of $183K – $488K, including a $35K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $671K[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: low - issued within the last 12 months
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 scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $183K – $488K
- 18th pct Service Resta…
- Avg gross sales
- $671K
- 9th pct Service Resta…
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 31
- 56th pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants 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 $183K – $488K including a $35K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $671K/year (median $614K).
- RISKVerdict A (Strongest tier), verdict score 76/100 (higher is better).
- GROWTHPositive: net +4 franchised outlets in the latest year (4 opened, 0 closed); 1 signed but not yet open (Item 20).
- GROWTHSystem growing at 16.7% CAGR over 3 years with 31 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Fat Shack Inc.
- CEO title
- CEO, President and Board Member
- Thomas J. Armenti
- Incorporated in
- DE
- HQ
- 420 E 58th Avenue, Suite 128B, Denver, Colorado 80216
- Auditor
- Muhammad Zubairy, CPA PC
- Audited financials
- Franchisor revenue
- $1.5M
- vs $1.5M prior year
Overview
About
- CEO
- Thomas J. Armenti
- Headquarters
- CO
- Founded
- 2013
- FDD year
- 2026
- States available
- 14
Can you afford it, and what does the money buy?
Entry cost runs 31% below the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $35K | $35K | |
| Lease Costsnot refundable | $4K | $15K | |
| Space Acquisition and Leasehold Improvementsnot refundable | $50K | $200K | |
| Architectural Design and Professional Feesnot refundable | $3K | $20K | |
| Furnishings and Equipmentnot refundable | $40K | $90K | |
| Signsnot refundable | $5K | $13K | |
| Computer, Software and Office Equipmentnot refundable | $750 | $2K | |
| POS Systemnot refundable | $6K | $12K | |
| Security Surveillance Systemnot refundable | $500 | $4K | |
| Opening Inventory and Suppliesnot refundable | $6K | $15K | |
| Smallwares and Print Materialsnot refundable | $10K | $10K | |
| Security Deposits, Utility Deposits, Business Licensesnot refundable | $3K | $10K | |
| Lease Review Feenot refundable | $0 | $750 | |
| On-Site Opening Assistance Feenot refundable | $0 | $6K | |
| Pre-Opening Hiring and Training of Employeesnot refundable | $3K | $10K | |
| Opening Marketingnot refundable | $1K | $10K | |
| Business Insurancenot refundable | $2K | $6K | |
| Additional Funds - 3 monthsnot refundable | $15K | $30K | |
| Total initial investment | $183K | $488K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $183K – $488K
- Top 40% of category vs category
- Liquid capital req'd
- $15K – $30K
- Top 40% of category vs category
- Franchise fee
- $35K – $35K
- Middle of category vs category
- Royalty
- 6.0%
- typical 6–8%
- Ad fund
- 1.5%
- typical 3–5%
- Total fee load
- 7.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 1.5% of gross sales |
| Transfer fee | $10K |
| Renewal fee | $6K |
| Inventory (initial) | $6K – $15K |
| Total fee load | 7.5% of rev |
What do units actually make?
Average unit sales run 31% below the quick-service restaurants norm.
Source: FDD 2026 · 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 Fat Shack 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 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
$358K
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 Fat Shack 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 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 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: 2026 FDD
Financial Performance
- Avg gross sales
- $671K
- Per unit, per year
- Median gross sales
- $614K
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
- Sample size
- 24 outlets
- vs category median 19
- Range (low → high)
- $363K→$1.1MCited, not corroborated — printed on page 46 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- 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 4 / 10 · typical
Compared against 781 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 $671K/year in gross sales. Revenue-to-investment ratio: 2.0x.
Fee burden
Total ongoing fee load of 7.5% (near the Quick-Service Restaurants median).
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 expanding at 16.7% CAGR over 3 years across 31 units — operators are staying and new ones are joining.
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 medians
How Fat Shack Compares
Category median of published Quick-Service Restaurants 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 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 31
- 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
- 3
- Corporate units in the system
- % franchised
- 90%
- vs corporate-owned
- Net growth (3-yr)
- +16.7%
- Net unit change over 3 years
- 3-yr CAGR
- +16.7%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 6
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 1
- 0.03 per open outlet · Item 20 Table 5
- Projected new
- 5
- Franchisor's next-year forecast
- Termination rate
- 4.2%
- Franchisor-initiated terminations
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 14 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
32 current owners across 14 states.
- CO 10
- TX 5
- KS 3
- FL 2
- GA 2
- WA 2
- IL 1
- MO 1
- NV 1
- OK 1
- OR 1
- PA 1
- +2 more states
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 3 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 3
- Loan volume
- $908K
- Median loan
- $240K
- 50th percentile
- Charge-off rate
- Under 10 loans (3)
- Insufficient SBA coverage: 3 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 (3)
- 5-yr charge-off
- Under 10 loans (3)
- Loans approved 2021+
- Active lenders
- 3
- 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
Fat Shack presents moderate-to-cautionary risk: healthy growth trajectory and protected territory offset by undisclosed profitability data, small system size, and wide investment variance requiring deeper validation.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
0 case reference(s): 0 pending, 0 settled.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Muhammad Zubairy, CPA PC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Consolidated Statements of Income (Fat Shack Inc. and Subsidiary). FY2025 revenue components: Royalties $1,031,774; Franchise fees $47,500; Management Fees $7,584; Other income $385,365; Total Revenues $1,472,223. Net loss of $(95,604) in 2025 vs. net income of $130,795 in 2024 and $218,715 in 2023.
ⓘ 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
Score breakdown · what drove the 76 / 100 verdict
- 01MEDNet income not disclosed in FDD Item 19 — impossible to validate profitability claims against $670k average revenue
- 02MINORSmall unit count (31 locations) limits system maturity and reduces franchisee support infrastructure
- 03MINORHigh investment range ($183k-$487k) creates ambiguity; unclear what drives 2.7x cost variance
- 04MINORModest unit growth (16.7% YoY) is healthy but from tiny base; vulnerable to single-unit closures skewing percentages
- 05MEDNo litigation disclosed is positive, but small systems often lack visibility into franchisee disputes
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.5% 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 | 7 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 3 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 3 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 60 days |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Denver, Colorado |
| Jury trial waiver | No |
| Governing law | CO |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 5 hrs
- On-the-job training
- 15 hrs
- Training location
- Fort Collins or Denver, Colorado
- Ongoing training
- Required
- Time to open
- 3 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Toast POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast POS
Item 20 · call current owners
Franchisee Contacts
32 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 Fat Shack franchise?
The total investment to open a Fat Shack franchise ranges from $183K – $488K, 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 Fat Shack franchise owners earn?
According to Item 19 of the Fat Shack FDD, the average gross sales per unit is $671K. The median is $614K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Fat Shack?
Fat Shack is franchised by Fat Shack Inc.. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Fat Shack 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 Fat Shack FDD and qualifies whose outlets they describe.
What is Fat Shack's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Fat Shack (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 Fat Shack franchise locations are there?
As of their most recent FDD filing, Fat Shack has 31 total units in the United States, including 28 franchised units and 3 company-owned units. 4 new units were opened in the latest reporting year.
Is Fat Shack a good franchise to buy?
FranchiseVerdict rates Fat Shack as a A-grade franchise with a verdict score of 76 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
Are you the franchisor?
If you represent Fat Shack, you can request corrections or provide updated information.
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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.