Fazoli'sFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Fazoli's franchise requires a total initial investment of $473K – $2.6M, including a $50K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.4M[2]. SBA 7(a) loans show a 11.8% charge-off rate across 17 loans[1]. Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $473K – $2.6M
- 31st pct Service Resta…
- Avg gross sales
- $1.4M
- 14th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 195
- 45th pct Service Resta…
- SBA default
- 11.8%
- 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
Franchising since 1991. Systems this mature have refined operations and brand recognition.
Franchised units fell from 156 to 139 over 3 years. Investigate why operators are leaving.
The franchisor's auditor raised doubt about continued operations. This is a serious risk signal.
4% cash-on-cash return (based on Restaurant Cash Flow). Below the 15% threshold where most investors start to question viability.
Bottom line
- Total investment $473K – $2.6M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.4M/year (median $1.3M), with an estimated 4% cash-on-cash return (based on Restaurant Cash Flow).
- Verdict F (Bottom Quintile) with a risk score of 100/100. SBA loan charge-off rate of 11.8% across 17 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
- Fazoli's Franchising Systems, LLC
- Parent company
- FAT Brands, Inc.
- Predecessor
- was
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 2470 Palumbo Drive, Lexington, Kentucky 40509-1117
- Auditor
- Macias Gini & O'Connell LLP
- Audited financials
- Franchisor revenue
- $11.3M
- vs $11.0M prior year
- ⚠ Going-concern note
- Disclosed in FDD 2025
- Auditor flagged doubt about continued operations. Verify against the latest FDD before deciding.
Affiliated brands
- to the following brands
Other brands the franchisor or its parent operates (Item 1).
Overview
About
Fazoli's franchisees operate fast-casual Italian-American restaurants, serving pasta, sandwiches, and salads through counter-service and delivery channels. Daily operations include food preparation, inventory management, staff scheduling, and customer service with corporate support for marketing, supply chain, and brand standards. Franchisees must maintain P&L discipline given the 4.8% average net margin and compete against regional and national chains in their unprotected territory.
- CEO
- Taylor Wiederhorn
- Headquarters
- KY
- Founded
- 1990
- FDD year
- 2025
- States available
- 26
FDD Item 7 · 2025 filing · 41 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Franchise Fee (Freestanding) | $50K | $50K | |
| Site Preparation (Freestanding) | $270K | $485K | |
| Architectural Services (Freestanding) | $25K | $75K | |
| Cost of the Building (Freestanding) | $865K | $1.3M | |
| Furniture, Fixtures, and Equipment (Freestanding) | $270K | $470K | |
| Information System and related technology (Freestanding) | $47K | $59K | |
| Training Expenses (Freestanding) | $10K | $35K | |
| Inventory & Uniforms (Freestanding) | $15K | $30K | |
| Security Deposits, Utilities and Insurance (Freestanding) | $5K | $27K | |
| Trade Area Analysis, Sales Projection and Sales Impact Report (Freestanding) | $15K | $15K | |
| Pre-opening and Opening Advertising (Freestanding) | $15K | $15K | |
| Additional Funds - 3 Months (Freestanding) | $60K | $120K | |
| Franchise Fee (In-line/End-cap) | $50K | $50K | |
| Site Preparation (In-line/End-cap) | $15K | $200K | |
| Architectural Services (In-line/End-cap) | $28K | $50K | |
| Cost of the Building (In-line/End-cap) | $512K | $638K | |
| Furniture, Fixtures, and Equipment (In-line/End-cap) | $270K | $470K | |
| Information System and related technology (In-line/End-cap) | $47K | $59K | |
| Training Expenses (In-line/End-cap) | $20K | $35K | |
| Inventory & Uniforms (In-line/End-cap) | $10K | $20K | |
| Total initial investment | $3.8M | $6.2M |
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.
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
$122K
9.0% margin
Unlevered ROIC
7%
EBITDA / total invested capital
Payback
13.4 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $473K – $2.6M
- Better than avg vs category
- Liquid capital req'd
- $30K – $120K
- Better than avg vs category
- Franchise fee
- $50K – $50K
- Better than avg vs category
- Royalty
- 5.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
- Payback period
- 24.1 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 4.0% of gross sales |
| Technology fee | $19K |
| Transfer fee | $25K |
| Renewal fee | $25K |
| Inventory (initial) | $8K – $30K |
| Total fee load | 9.0% of rev |
Financial Performance
- Avg gross sales
- $1.4M
- Per unit, per year
- Median gross sales
- $1.3M
- Avg restaurant cash flow
- $65K
- Reported as Restaurant Cash Flow in FDD Item 19
- Cash-on-cash
- 4.2%
- Based on Restaurant Cash Flow / investment midpoint
- Item 19 type
- net_sales
- Sample size
- 136 units
- vs category median 13 · large
- Range (low → high)
- $800K→$2.4M
- Cohort dispersion (min → max)
- Quartile band
- $973K→$1.8M
- Bottom 25% → top 25%
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
Revenue is only 0.9x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
vs Full-Service Restaurants averages
How Fazoli's Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 195
- Opened
- 3
- Last reporting year
- Closed
- 14
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 9.3%
- Company-owned
- 56
- Corporate units in the system
- % franchised
- 71%
- vs corporate-owned
- Net growth (yr3)
- -7.3%
- Net unit change last year
- 3-yr CAGR
- -7.9%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 11
- Terminated (3yr)
- 1
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 1.4%
- Franchisor-initiated terminations
- Ceased ops
- 7.9%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 9 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
- Illinois
- Indiana
- Michigan
- Minnesota
- New York
- 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
- 17
- Loan volume
- $15.7M
- Median loan
- $820K
- 50th percentile
- Charge-off rate
- 11.8%
- 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)
- 71.4%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 13
- Defaults
- 2
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Fazoli's'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 9 states
- Startup risk premium and job creation velocity
- 6-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
Fazoli's presents a CAUTION-to-HIGH RISK profile: declining unit count, pending litigation against franchisor, razor-thin franchisee margins, and unprotected territories create substantial downside risk despite reasonable average unit volumes.
Litigation (Item 3)
9 case reference(s): 0 pending, 6 settled.
Largest disclosed settlement: $3
Bankruptcy (Item 4)
Disclosed in last 7 years
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. We continue to operate our business and manage our assets as a debtor-in-possession under bankruptcy court supervisi
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 100 / 100 rating
- 01MINORSystem declining at -7.3% YoY with only 195 units; indicates shrinking franchise base and weakening brand momentum
- 02MINORPending putative investor class action against parent and officers creates uncertainty about franchisor financial stability and management credibility
- 03MINORUnprotected territory exposes franchisees to cannibalization; franchisor can place competing units in your service area
- 04MINORExtremely thin net margins: $64,718 avg net income on $1.36M revenue (4.8% net margin) leaves minimal profit after 5% royalty and operating expenses
- 05HIGHHigh initial investment ($472.5K-$2.64M) with minimal investment protection given system contraction and litigation exposure
- 06HIGHGoing concern status indicates potential financial distress at parent company level
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 | Site-specific |
| Protected territory | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Kentucky |
| Litigation count | 3 |
View Item 3 litigation summary
9 case reference(s): 0 pending, 6 settled.
Items 10, 11
Training & Operations
- Classroom training
- 0 hrs
- On-the-job training
- 455 hrs
- Training location
- On-site and corporate
- Site selection
- franchisor
- Franchisor financing
- Offered
- Item 10
- POS system
- Brink
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Brink
Item 20 · call current owners
Franchisee Contacts
22 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Fazoli's · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Fazoli's franchise?
The total investment to open a Fazoli's franchise ranges from $473K – $2.6M, 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 Fazoli's franchise owners earn?
According to Item 19 of the Fazoli's FDD, the average gross sales per unit is $1.4M. The median is $1.3M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Fazoli's's franchise failure rate?
Based on SBA 7(a) loan data, Fazoli's has a charge-off rate of 11.8% across 17 loans, meaning 11.8% 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 Fazoli's franchise locations are there?
As of their most recent FDD filing, Fazoli's has 195 total units in the United States, including 156 franchised units and 56 company-owned units. 3 new units were opened in the latest reporting year.
Is Fazoli's a good franchise to buy?
FranchiseVerdict rates Fazoli's as a F-grade franchise with a risk score of 100 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.
For franchisors
Are you the franchisor?
If you represent Fazoli's, you can request corrections or provide updated information.
Claim this brandOther Full-Service Restaurants franchises
Compare similar franchise opportunities in the Full-Service Restaurants category
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.