Fazoli's Franchise Cost, Revenue & Review 2026
- Investment
- $1.6M – $2.6M
- Disclosed sales
- $1.3M
- gross sales, not profit
- SBA charge-off
- 12.0%
- on 40 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Fazoli's is a fast-casual franchise serving Italian-American pasta, sandwiches, and its signature breadsticks. Franchisees run restaurants with counter service and drive-thru, managing food prep, staffing, and costs.
FranchiseVerdict summary · 2026
A Fazoli's franchise requires a total initial investment of $1.6M – $2.6M, including a $50K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.3M[2]. SBA 7(a) loans show a 12.0% charge-off rate across 40 loans[1]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
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
- $1.6M – $2.6M
- 98th pct Service Resta…
- Avg gross sales
- $1.3M
- Net sales25th pct Service Resta…
- Royalty
- 5.0%
- 12th pct Service Resta…
- Units
- 195
- 83rd pct Service Resta…
- SBA charge-off
- 12.0%
- % 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 $1.6M – $2.6M including a $50K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.3M/year (median $1.2M).
- RISKVerdict C (Average), verdict score 45/100 (higher is better). SBA loan charge-off rate of 12.0% across 40 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -11 franchised outlets in the latest year (3 opened, 14 closed); 3 signed but not yet open (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Fazoli's Franchising Systems, LLC
- Parent company
- Fazoli's Group, Inc.
- Ultimate parent
- FAT Brands, Inc.
- Predecessor
- Fazoli's Systems, Inc.
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Taylor Wiederhorn
- Incorporated in
- DE
- HQ
- 2470 Palumbo Drive, Lexington, Kentucky 40509-1117
- Auditor
- Macias Gini & O'Connell LLP
- Audited financials
Affiliated brands
- to the following brands
Other brands the franchisor or its parent operates (Item 1).
Same owner · FDD Item 1
12 other brands on this site name FAT Brands, Inc. as parent or ultimate parent in their own FDD.
- Buffalo’s CafeB
- Elevation BurgerC
- FatburgerD
- 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 2025 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
- KY
- Founded
- 1991
- FDD year
- 2025
- States available
- 26
Can you afford it, and what does the money buy?
Entry cost runs 341% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Franchise Fee (See Note 1) | $50K | $50K | |
| Site Preparation (See Note 2a) | $270K | $485K | |
| Architectural Services (See Note 3) | $25K | $75K | |
| Cost of the Building (See Note 4a) | $865K | $1.3M | |
| Furniture, Fixtures, and Equipment (See Note 5a) | $270K | $470K | |
| Information System and related technology (See Note 6) | $47K | $59K | |
| Training Expenses (See Note 7) | $10K | $35K | |
| Inventory & Uniforms (See Note 8) | $15K | $30K | |
| Security Deposits, Utilities and Insurance (See Note 9) | $5K | $27K | |
| Trade Area Analysis, Sales Projection and Sales Impact Report (see Item 8) | $15K | $15K | |
| Pre-opening and Opening Advertising (See Note 10) | $15K | $15K | |
| Additional Funds- 3 Months (See Note 11) | $60K | $120K | |
| Total initial investment | $1.6M | $2.6M |
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
- $1.6M – $2.6M
- Bottom third — review vs category
- Liquid capital req'd
- $60K – $120K
- Bottom third — review vs category
- Franchise fee
- $50K – $50K
- Bottom third — review vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 4.0% of gross sales |
| Technology fee | $16K |
| Training fee | $10K |
| Transfer fee | $25K |
| Renewal fee | $25K |
| Inventory (initial) | $15K – $30K |
| Total fee load | 9.0% of rev |
What do units actually make?
Average unit sales run 35% above the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · 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 Fazoli's 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
$2.2M
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 Fazoli's 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: 2025 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.2M
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
- Sample size
- 136 outlets
- vs category median 19 · large
- Range (low → high)
- $484K→$2.6MCited, not corroborated — printed on page 73 of the 2025 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 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 9 / 10
- vs category median 4 / 10 · above
Compared against 781 Quick-Service Restaurants brands
Revenue is only 0.6x 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 $1.3M/year in gross sales. Revenue-to-investment ratio: 0.6x.
Fee burden
Total ongoing fee load of 9.0% — above the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 9/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -7.9% 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 Fazoli's 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 2025 · Item 20
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
- 7.2%
- Company-owned
- 56
- Corporate units in the system
- % franchised
- 71%
- vs corporate-owned
- Net growth (3-yr)
- -7.9%
- Net unit change over 3 years
- 3-yr CAGR
- -7.9%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 1
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 3
- 0.02 per open outlet · Item 20 Table 5
- Projected new
- 4
- Franchisor's next-year forecast
- 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).
Where the owners are · Item 20 owner list
13 current owners across 3 states; 9 former (terminated, transferred or not renewed) listed separately.
- WI 9
- VA 2
- WV 2
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 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 40
- Loan volume
- $27.6M
- Median loan
- $820K
- 50th percentile
- Charge-off rate
- 12.0%
- on 40 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)
- 88.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 13
- Defaults
- 3
- Typical loan rate
- 6.2%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand above franchise avg ↑
- Jobs supported
- 765
- 4.9 per loan
- Lender concentration
- 18%
- top lender's share
Borrower mix: 62% went to startups / new businesses, 38% 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.
Top lenders financing Fazoli's franchisees
Showing 3 of 13 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 Fazoli's from SBA 7(a) FOIA data.
- Principal loss rate
- 1.2%
- Avg SBA guarantee
- 76%
- Avg interest rate
- 6.18%
- Avg chargeoff amount
- $95K
- Lender concentration
- 17.6%
- Job velocity
- 4.9 per $100K
- NAICS benchmark
- 8.7%
- NAICS 722513
- Jobs supported
- 765
Top SBA lendersTop lender holds 18% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Gulf Coast Bank and Trust Company | 3 | $1.2M | N/A |
| 2 | The Huntington National Bank | 2 | $625K | N/A |
| 3 | Columbia Bank | 2 | $769K | 50.0% |
| 4 | Horizon Bank | 1 | $250K | 100.0% |
| 5 | Bank of Franklin County | 1 | $618K | 0.0% |
| 6 | PNC Bank, National Association | 1 | $1.3M | 0.0% |
| 7 | First-Citizens Bank & Trust Company | 1 | $1.4M | N/A |
| 8 | TD Bank, National Association | 1 | $820K | 0.0% |
| 9 | First Federal Bank | 1 | $2.5M | N/A |
| 10 | Community Trust Bank, Inc. | 1 | $1.1M | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| FLFlorida | 4 | 0 | 0.0% |
| TXTexas | 4 | 0 | 0.0% |
| GAGeorgia | 2 | 0 | 0.0% |
| OROregon | 2 | 1 | 50.0% |
| ILIllinois | 1 | 0 | -- |
| INIndiana | 1 | 1 | 100.0% |
| KYKentucky | 1 | 0 | -- |
| MIMichigan | 1 | 0 | -- |
| MOMissouri | 1 | 0 | 0.0% |
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 12.0% — 25% 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
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)
Subject: the franchisor is a named party (defendant).
1 pending securities class action (Kates v. FAT Brands, 2024); 2 concluded: FAT Brands securities class action (settled $3M, dismissed 2023) and Virginia SCC franchise registration violation (affiliate FBNA, settled 2023)
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
FAT Brands and subsidiaries including Fazoli's Franchising Systems, LLC filed voluntary Chapter 11 petitions January 25, 2026 in U.S. Bankruptcy Court for the Southern District of Texas, Case No. 26-90278 (ARP) for FFS LLC
Audited financials (Item 21)
Yes · Macias Gini & O'Connell LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Item 21 audited statements (Exhibit B, FYE Dec 31 2024/2023/2022) are referenced but the audited statement text and CPA auditor name are not present in this extract. Figures shown are from the UNAUDITED interim statements included in the text: Balance Sheet as of July 27, 2025, and Consolidated Statement of Operations for the period 4/28/25-7/27/25 (a ~3-month quarter, not full year). franchisor_net_worth is a member's DEFICIT of $4,373,847 (negative). total_revenue $2,556,491 = royalties $1,812,642 + franchise fees $116,702 + advertising fees $627,147; net loss $546,162. Full-year audited revenue not available in text.
ⓘ 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: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 45 / 100 verdict
- 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
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 2025 · 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 | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| 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 |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Arbitration location | Kentucky |
| Jury trial waiver | No |
| Governing law | KY |
| Litigation count | 3 |
View Item 3 litigation summary
1 pending securities class action (Kates v. FAT Brands, 2024); 2 concluded: FAT Brands securities class action (settled $3M, dismissed 2023) and Virginia SCC franchise registration violation (affiliate FBNA, settled 2023)
Items 10, 11
Training & Operations
- Classroom training
- 71 hrs
- On-the-job training
- 214 hrs
- Training location
- Company Certified Training Restaurant
- Ongoing training
- Optional
- Time to open
- 9 mo
- From signing to launch
- Site selection
- Franchisee selects, franchisor must approve
- Franchisor financing
- Not offered
- Item 10
- POS system
- Brink POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Brink POS
Item 20 · call current owners
Franchisee Contacts
22 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 Fazoli's franchise?
The total investment to open a Fazoli's franchise ranges from $1.6M – $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 $1.3M. The median is $1.2M. 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 Fazoli's?
Fazoli's is franchised by Fazoli's Franchising Systems, LLC. Its parent company is Fazoli's Group, Inc.. The ultimate parent named in the FDD is FAT Brands, Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Fazoli'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 Fazoli's FDD and qualifies whose outlets they describe.
What is Fazoli's's franchise failure rate?
Based on SBA 7(a) loan data, Fazoli's has a charge-off rate of 12.0% across 40 loans, meaning 12.0% 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 139 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 C-grade franchise with a verdict score of 45 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 Fazoli's, 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.