Fatburger Franchise Cost, Revenue & Review 2026
- Investment
- $517K – $2.7M
- Disclosed sales
- $1.1M
- gross sales, not profit
- SBA charge-off
- 13.6%
- on 39 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Fatburger is a fast-casual franchise serving large, made-to-order burgers, hand-scooped shakes, and fries. Franchisees run restaurants managing food prep, counter service, and staffing.
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]. FranchiseVerdict grade: D (Below average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2026 filing · Data extracted: · Last cited check: · Staleness risk: low - the current year's filing
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
- $517K – $2.7M
- 78th pct Service Resta…
- Avg gross sales
- $1.1M
- Net sales22nd pct Service Resta…
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 177
- 82nd pct Service Resta…
- SBA charge-off
- 13.6%
- % 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 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 $517K – $2.7M including a $50K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.1M/year (median $1.1M).
- RISKVerdict D (Below average), verdict score 28/100 (higher is better). SBA loan charge-off rate of 13.6% across 39 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -9 franchised outlets in the latest year (19 opened, 28 closed); 16 signed but not yet open (Item 20).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Fatburger North America, Inc.
- Parent company
- FAT Brands, Inc.
- FDD Item 1, page 10 of the 2026 FDD
- Predecessor
- and Affiliates
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 9720 Wilshire Boulevard Suite 500, Beverly Hills, California 90212
- Auditor
- Macias Gini & O'Connell LLP
- Audited financials
- Franchisor revenue
- $11.0M
- vs $10.6M prior year
Same owner · FDD Item 1, page 10
12 other brands on this site name FAT Brands, Inc. as parent or ultimate parent in their own FDD.
- Buffalo’s CafeB
- Elevation BurgerC
- Fazoli'sC
- GREAT AMERICAN COOKIESA
- HOT DOG ON A STICKB
- Hurricane Grill & Wings / Hurricane Burgers Tacos WingsB
- Johnny RocketsD
- Marble Slab CreameryC
- Native Grill and WingsB
- PretzelmakerB
- Round Table PizzaB
- Twin PeaksA
Portfolio: FAT Brands
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Taylor Wiederhorn
- Headquarters
- CA
- Founded
- 1952
- FDD year
- 2026
- States available
- 13
Can you afford it, and what does the money buy?
Entry cost runs 227% above the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $517K – $2.7M
- Bottom third — review vs category
- Liquid capital req'd
- $25K – $40K
- Middle of category vs category
- Franchise fee
- $50K – $50K
- Bottom third — review vs category
- Royalty
- 6.0%
- 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 net sales |
| Marketing / ad fund | 3.0% of net sales |
| Technology fee | $2K |
| Training fee | $33K |
| Transfer fee | $15K |
| Renewal fee | $40 |
| Inventory (initial) | $7K – $10K |
| Total fee load | 9.0% of rev |
What do units actually make?
Average unit sales run 17% above the quick-service restaurants norm.
Reported as net sales, not gross sales
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 Fatburger 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
$1.6M
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 Fatburger 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
Reported as net sales, not gross sales
- Avg gross sales
- $1.1M
- Per unit, per year
- Median gross sales
- $1.1M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Net Sales (unaudited)
- Sample size
- 66 outlets
- vs category median 19 · large
- Range (low → high)
- $305K→$3.2MCited, not corroborated — printed on page 81 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2024
- Transparency
- 7 / 10
- vs category median 4 / 10 · above
Compared against 781 Quick-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.
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 $1.1M/year in gross sales. Revenue-to-investment ratio: 0.7x.
Fee burden
Total ongoing fee load of 9.0% — above the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -12.8% 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 Quick-Service Restaurants medians
How Fatburger 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
- 177
- Opened
- 19
- Last reporting year
- Closed
- 28
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 40.7%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -12.8%
- Net unit change over 3 years
- 3-yr CAGR
- -12.8%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 3
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 16
- 0.09 per open outlet · Item 20 Table 5
- Projected new
- 34
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 13 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.
13
states with franchisees (per FDD Item 12)
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
- 39
- Loan volume
- $18.9M
- Median loan
- $353K
- 50th percentile
- Charge-off rate
- 13.6%
- on 39 loans · 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
- Typical loan rate
- 7.4%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand above franchise avg ↑
- Jobs supported
- 847
- 6.2 per loan
- Lender concentration
- 12%
- top lender's share
Borrower mix: 56% went to startups / new businesses, 44% 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
Fatburger charge-off rate by loan vintage
Top lenders financing Fatburger franchisees
Showing 3 of 24 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.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Fatburger from SBA 7(a) FOIA data.
- Principal loss rate
- 6.0%
- Avg SBA guarantee
- 75%
- Avg interest rate
- 7.42%
- Avg chargeoff amount
- $273K
- Lender concentration
- 11.8%
- Job velocity
- 6.2 per $100K
- NAICS benchmark
- 8.7%
- NAICS 722513
- Jobs supported
- 847
Top SBA lendersTop lender holds 12% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Wells Fargo Bank National Association | 4 | $948K | 0.0% |
| 2 | The Huntington National Bank | 4 | $2.6M | N/A |
| 3 | OneUnited Bank | 3 | $1.1M | 0.0% |
| 4 | Northrim Bank | 2 | $80K | 0.0% |
| 5 | Mission Valley Bank | 2 | $990K | 0.0% |
| 6 | Northeast Bank | 2 | $300K | N/A |
| 7 | Zions Bank, A Division of | 1 | $200K | 0.0% |
| 8 | Far East National Bank | 1 | $325K | 0.0% |
| 9 | Popular Bank | 1 | $250K | 100.0% |
| 10 | KeyPoint CU | 1 | $309K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| CACalifornia | 24 | 3 | 17.6% |
| TXTexas | 3 | 0 | -- |
| AKAlaska | 2 | 0 | 0.0% |
| FLFlorida | 2 | 0 | -- |
| WAWashington | 2 | 0 | 0.0% |
| VAVirginia | 1 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 13.6% — 15% below the 16.0% national norm, i.e. lower 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
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
1 pending securities class action (Kates v. FAT Brands 2024); concluded cases include Virginia SCC settlements, Tatum franchise dispute (settled $40K), Matthews securities class action (settled $2.5M+stock), Vignola securities class action (settled $75K), Rojany class action (settled $50K), Shahi international development dispute (dismissed)
Bankruptcy (Item 4)
Subject: the company or an affiliate. Disclosed (Item 4 covers the last 10 years)
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”), filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas, in Houston, Texas. The FAT Group requested joint administration under Case No. 26-90126 (ARP) to restructure their corporate debt.
Audited financials (Item 21)
Yes · Macias Gini & O'Connell LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
FY2024 (ended Dec 31, 2024) franchisor total revenue $10,999,932 per Item 1; audited consolidated balance-sheet line items not present in the extracted text. Net worth/assets/liabilities taken from the only balance sheet in Exhibit A (FBNA interim, unaudited, as of July 27, 2025): total assets $26,157,098, total liabilities $5,789,559, member's deficit $(20,367,539). Auditor Macias Gini & O'Connell LLP audited the FY2024/FY2023 consolidated statements (report dated Apr 15, 2025).
ⓘ 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
- Can negotiate own supplier terms: No
Score breakdown · what drove the 28 / 100 verdict
- 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
- 05MINOR6% 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
What are you signing up for?
Ongoing fees run about 9.0% 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 | 15 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 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 | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles County, California |
| Jury trial waiver | No |
| Governing law | CA |
| Litigation count | 6 |
View Item 3 litigation summary
1 pending securities class action (Kates v. FAT Brands 2024); concluded cases include Virginia SCC settlements, Tatum franchise dispute (settled $40K), Matthews securities class action (settled $2.5M+stock), Vignola securities class action (settled $75K), Rojany class action (settled $50K), Shahi international development dispute (dismissed)
Items 10, 11
Training & Operations
- Classroom training
- 44 hrs
- On-the-job training
- 256 hrs
- Training location
- Corporate offices in Beverly Hills, CA or certified training restaurants in Ladera Heights CA, Clovis CA, Arlington TX, New Braunfels TX
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval; must use franchisor-designated real estate broker
- Franchisor financing
- Not offered
- Item 10
- POS system
- Aloha
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Aloha
Item 20 · call current owners
Franchisee Contacts
106 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 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. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Fatburger?
Fatburger is franchised by Fatburger North America, Inc.. Its parent company is FAT Brands, Inc.. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Fatburger 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 Fatburger FDD and qualifies whose outlets they describe.
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 177 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 D-grade franchise with a verdict score of 28 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 Fatburger, 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.