Flip Flop ShopsFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Flip Flop Shops franchise requires a total initial investment of $183K – $349K, including a $30K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $473K[2]. SBA 7(a) loans show a 52.6% charge-off rate across 26 loans[1]. Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $183K – $349K
- 19th pct Retail
- Avg gross sales
- $473K
- 3rd pct Retail
- Royalty
- 5.0%
- 6th pct Retail
- Units
- 47
- 18th pct Retail
- SBA default
- 52.6%
- system-wide median varies by category
Quick verdict · Retail · color = vs category peers
Green = >15% above Retail 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
52.6% of SBA loans charged off across 26 loans, above the 16% franchise average.
Franchised units fell from 56 to 47 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $183K – $349K including a $30K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $473K/year (median $333K).
- Verdict F (Bottom Quintile) with a risk score of 90/100. SBA loan charge-off rate of 52.6% across 26 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System contracting at -16.1% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Flip Flop Shops, LLC
- Parent company
- Bearpaw Holdings, LLC
- Incorporated in
- CA
- HQ
- 7524 Old Auburn Road, Citrus Heights, California 95610
- Auditor
- Fineman West & Company LLP
- Audited financials
- Franchisor revenue
- $1.6M
- vs $1.5M prior year
Overview
About
Flip Flop Shops are flip-flop and casual footwear retail locations where franchisees manage inventory, customer sales, merchandising, and staff. Day-to-day operations involve retail store management, point-of-sale transactions, and brand-standard customer service in mall or street-front locations. Franchisees oversee local marketing, staffing decisions, and customer experience within a protected territory.
- CEO
- Thomas A. Romeo
- Headquarters
- CA
- FDD year
- 2025
- States available
- 12
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $30K | $30K |
| Working capital (3–6 mo) | $0 | $55K |
| Equipment, build-out, other | $153K | $264K |
| Total initial investment | $183K | $349K |
Source: Flip Flop Shops 2025 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
$43K
9.0% margin
Unlevered ROIC
15%
EBITDA / total invested capital
Payback
6.9 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $183K – $349K
- Better than avg vs category
- Liquid capital req'd
- $0 – $55K
- Better than avg vs category
- Franchise fee
- $30K – $30K
- Better than avg vs category
- Royalty
- 5.0%
- Gross Sales · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 6.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Transfer fee | $15K |
| Renewal fee | $15K |
| Total fee load | 6.0% of rev |
A 6.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
Financial Performance
- Avg gross sales
- $473K
- Per unit, per year
- Median gross sales
- $333K
- Item 19 type
- Historical financial performance
- Sample size
- 37 units
- vs category median 49
- Range (low → high)
- $91K→$1.4M
- Cohort dispersion (min → max)
- Transparency
- 4 / 5
- vs category median 2 / 5 · above
Compared against 304 Retail brands
vs Retail averages
How Flip Flop Shops Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 47
- Opened
- 10
- Last reporting year
- Closed
- 12
- Turnover rate
- 25.5%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -4.1%
- Net unit change last year
- 3-yr CAGR
- -16.1%
- 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 · 19 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.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 26
- Loan volume
- $3.9M
- Median loan
- $172K
- 50th percentile
- Charge-off rate
- 52.6%
- 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)
- 47.4%
- 5-yr charge-off
- 66.7%
- Loans approved 2021+
- Active lenders
- 19
- Defaults
- 10
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Flip Flop Shops'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 12 states
- Startup risk premium and job creation velocity
- 9-year lending trend
Instant access. No subscription.
A 52.6% charge-off rate means roughly 1 in 2 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Flip Flop Shops presents high risk due to a shrinking franchise system, going concern doubts, undisclosed profitability, and a pattern of litigation including fraud allegations and regulatory violations.
Audited financials (Item 21)
Yes · Fineman West & Company LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 90 / 100 rating
- 01MINORUnit count declining 4.1% year-over-year (47 units) suggests system contraction and potential viability concerns
- 02HIGHMultiple litigation matters including fraud allegations against predecessor, California DFPI consent order for registration violations, and patent infringement suit against CEO create legal/reputational risk
- 03MEDNet income not disclosed despite $473K average revenue — inability or unwillingness to report profitability is a major transparency red flag
- 04HIGHGoing Concern status is False, indicating auditors have substantial doubt about the franchisor's ability to continue operations
- 05MINORHigh investment range ($182,900-$349,400) paired with declining unit count suggests poor unit economics and deteriorating ROI
- 06MED5% royalty on gross sales (not net profit) increases franchisee burden during low-margin periods; no disclosed Item 19 earnings claims to validate profitability
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 | 8 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rights | 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 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | California |
| Litigation count | 3 |
Items 10, 11
Training & Operations
- Classroom training
- 0 hrs
- On-the-job training
- 84 hrs
- POS system
- RICS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: RICS
Item 20 · call current owners
Franchisee Contacts
60 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Flip Flop Shops · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Flip Flop Shops franchise?
The total investment to open a Flip Flop Shops franchise ranges from $183K – $349K, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Flip Flop Shops franchise owners earn?
According to Item 19 of the Flip Flop Shops FDD, the average gross sales per unit is $473K. The median is $333K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Flip Flop Shops's franchise failure rate?
Based on SBA 7(a) loan data, Flip Flop Shops has a charge-off rate of 52.6% across 26 loans, meaning 52.6% 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 Flip Flop Shops franchise locations are there?
As of their most recent FDD filing, Flip Flop Shops has 47 total units in the United States, including 56 franchised units and 0 company-owned units. 10 new units were opened in the latest reporting year.
Is Flip Flop Shops a good franchise to buy?
FranchiseVerdict rates Flip Flop Shops as a F-grade franchise with a risk score of 90 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.