FatburgerFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Fatburger franchise requires a total initial investment of $517K – $2.7M, including a $50K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.1M[2]. SBA 7(a) loans show a 13.6% charge-off rate across 39 loans[1]. Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $517K – $2.7M
- 34th pct Service Resta…
- Avg gross sales
- $1.1M
- 12th pct Service Resta…
- Royalty
- 6.0%
- 26th pct Service Resta…
- Units
- 177
- 45th pct Service Resta…
- SBA default
- 13.6%
- 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
At 0.7x revenue per dollar invested, this system underperforms the typical 1.5-2.5x range.
Franchising since 1990. Systems this mature have refined operations and brand recognition.
Franchised units fell from 203 to 177 over 3 years. Investigate why operators are leaving.
The franchisor's auditor raised doubt about continued operations. This is a serious risk signal.
Bottom line
- Total investment $517K – $2.7M including a $50K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $1.1M).
- Verdict F (Bottom Quintile) with a risk score of 80/100. SBA loan charge-off rate of 13.6% across 39 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Auditor disclosed a going-concern note, which flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Fatburger North America, Inc.
- Parent company
- FAT Brands, Inc.
- Ultimate parent
- Fog Cutter Holdings LLC
- Predecessor
- and Affiliates
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 9720 Wilshire Blvd. Suite 500, Beverly Hills, California 90212
- Auditor
- Macias Gini & O’Connell LLP
- Audited financials
- Franchisor revenue
- $10.6M
- vs $11.0M prior year
- ⚠ Going-concern note
- Disclosed in FDD 2026
- Auditor flagged doubt about continued operations. Verify against the latest FDD before deciding.
Overview
About
Fatburger franchisees operate fast-casual burger restaurants serving made-to-order hamburgers, hot dogs, and sides. Daily operations include food preparation, kitchen management, customer service, and point-of-sale management. Franchisees manage staffing, inventory, local marketing, and must maintain brand standards across a 15-year agreement.
- CEO
- Taylor Wiederhorn
- Headquarters
- CA
- Founded
- 1952
- FDD year
- 2026
- States available
- 13
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $25K | $40K |
| Equipment, build-out, other | $442K | $2.6M |
| Total initial investment | $517K | $2.7M |
Source: Fatburger 2026 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
$103K
9.0% margin
Unlevered ROIC
6%
EBITDA / total invested capital
Payback
15.7 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $517K – $2.7M
- Better than avg vs category
- Liquid capital req'd
- $25K – $40K
- Better than avg vs category
- Franchise fee
- $50K – $50K
- Better than avg vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $2K |
| Transfer fee | $15K |
| Renewal fee | $40 |
| Total fee load | 9.0% of rev |
Financial Performance
- Avg gross sales
- $1.1M
- Per unit, per year
- Median gross sales
- $1.1M
- Item 19 type
- net_sales
- Sample size
- 66 units
- vs category median 13 · large
- Range (low → high)
- $305K→$3.2M
- Cohort dispersion (min → max)
- Transparency tier
- revenue_only
- Categorical assessment of disclosure depth
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 7 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
Revenue is only 0.7x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
vs Full-Service Restaurants averages
How Fatburger Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 177
- Opened
- 19
- Last reporting year
- Closed
- 28
- Turnover rate
- 15.8%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -4.8%
- Net unit change last year
- 3-yr CAGR
- -12.8%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 3
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 13 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
- Hawaii
- Maryland
- Michigan
- Minnesota
- North Dakota
- Rhode Island
- South Dakota
- Virginia
- Wisconsin
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 39
- Loan volume
- $18.9M
- Median loan
- $353K
- 50th percentile
- Charge-off rate
- 13.6%
- 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)
- 85.7%
- 5-yr charge-off
- 20.0%
- Loans approved 2021+
- Active lenders
- 24
- Defaults
- 3
Vintage analysis
Fatburger charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Fatburger's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 6 states
- Startup risk premium and job creation velocity
- 16-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Declining unit count, withheld profitability data, active litigation, and going concern status present elevated risk for a burger franchise requiring half-million dollar investment.
Litigation (Item 3)
7 case reference(s): 2 pending, 4 settled.
Largest disclosed settlement: $50,000
Bankruptcy (Item 4)
Disclosed in last 7 years
BANKRUPTCY On January 25, 2026, Parent (located at 9720 Wilshire Blvd., Suite 500, Beverly Hills, California 90212), Twin Hospitality Group Inc. (located at 5151 Belt Line Road, Suite 1200, Dallas, TX 75254) and their subsidiary entities, including us and our affiliates (collectively, the “FAT Group
Audited financials (Item 21)
Yes · Macias Gini & O’Connell LLP⚠ Going-concern note flagged
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 80 / 100 rating
- 01MINORUnit count declining 4.8% YoY indicates shrinking franchise system and potential market saturation or brand weakness
- 02MEDNet income not disclosed in FDD Item 19 — impossible to assess actual profitability despite $1.14M average revenue
- 03HIGHMultiple litigation cases including pending securities class action, franchise registration disputes, and breach of contract claims suggest systemic franchisor-franchisee relationship issues
- 04MEDHigh investment range ($517K–$2.66M) paired with undisclosed profitability creates significant downside risk with unclear return potential
- 05HIGHGoing concern disclosure raises questions about franchisor financial stability and long-term support capabilities
- 06MINOR6% royalty on top of operating costs in declining QSR category may create unsustainable unit economics
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 | 15 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 10 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | California |
| Litigation count | 9 |
View Item 3 litigation summary
7 case reference(s): 2 pending, 4 settled.
Items 10, 11
Training & Operations
- Classroom training
- 56 hrs
- On-the-job training
- 294 hrs
- Training location
- Off-site and on-site
- Franchisor financing
- Offered
- Item 10
- POS system
- Aloha
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Aloha
Item 20 · call current owners
Franchisee Contacts
89 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Fatburger · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Fatburger franchise?
The total investment to open a Fatburger franchise ranges from $517K – $2.7M, 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 Fatburger franchise owners earn?
According to Item 19 of the Fatburger FDD, the average gross sales per unit is $1.1M. The median is $1.1M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Fatburger's franchise failure rate?
Based on SBA 7(a) loan data, Fatburger has a charge-off rate of 13.6% across 39 loans, meaning 13.6% 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 Fatburger franchise locations are there?
As of their most recent FDD filing, Fatburger has 177 total units in the United States, including 203 franchised units and 0 company-owned units. 19 new units were opened in the latest reporting year.
Is Fatburger a good franchise to buy?
FranchiseVerdict rates Fatburger as a F-grade franchise with a risk score of 80 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.