Fosters Freeze Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Fosters Freeze is a quick-service franchise known for soft-serve ice cream alongside burgers and classic fast food. Franchisees run the restaurants, managing food and dessert service, staffing, and operations.
FranchiseVerdict summary · 2026
A Fosters Freeze franchise requires a total initial investment of $612K – $1.0M, including a $45K franchise fee and an ongoing 4.0% royalty[2]. Per the 2024 FDD, average unit revenue was $1.3M[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $612K – $1.0M
- 83rd pct Service Resta…
- Avg gross sales
- $1.3M
- 22nd pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 61
- 69th pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · 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 $612K – $1.0M including a $45K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.3M/year (median $1.3M).
- RISKVerdict A (Strongest tier), verdict score 66/100 (higher is better).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Fosters Freeze International, LLC
- Predecessor
- Fosters Freeze, LLC
- Prior franchisor entity
- CEO title
- President and Chief Executive Officer
- Nealesh Dahya
- Incorporated in
- DE
- HQ
- 14071 Peyton Drive, Suite 2697, Chino Hills, CA 91709
- Auditor
- Naper CPA Group
- Audited financials
- Franchisor revenue
- $1.4M
- vs $1.4M prior year
Overview
About
- CEO
- Nealesh Dahya
- Headquarters
- CA
- Founded
- 1946
- FDD year
- 2024
- States available
- 1
Can you afford it, and what does the money buy?
Entry cost runs 23% above the typical quick-service restaurants franchise.
Source: FDD 2024 · Items 5–7
FDD Item 7 · 2024 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $45K | $45K |
| Working capital (3–6 mo) | $20K | $30K |
| Equipment, build-out, other | $547K | $934K |
| Total initial investment | $612K | $1.0M |
Source: Fosters Freeze 2024 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
- $612K – $1.0M
- Bottom third — review vs category
- Liquid capital req'd
- $20K – $30K
- Top 40% of category vs category
- Franchise fee
- $45K – $45K
- Bottom third — review vs category
- Royalty
- 4.0%
- tiered · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $100 |
| Training fee | $6K |
| Transfer fee | $16K |
| Renewal fee | $23K |
| Inventory (initial) | $6K – $20K |
| Total fee load | 7.0% of rev |
What do units actually make?
Average unit sales land near the quick-service restaurants norm.
Source: FDD 2024 · Item 19
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
$193K
15.0% margin
Unlevered ROIC
23%
EBITDA / total invested capital
Payback
4.3 yrs
cash-on-cash, unlevered
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. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Fosters Freeze unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
23%
Below the 30–60% attractive-franchise band
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%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Fosters Freeze units return on equity?
Equity IRR · 5-yr
48.1%
7.13× MOIC
Year-1 DSCR
1.91×
EBITDA ÷ debt service
Equity required
$2.2M
on $10.3M purchase
Total debt
$8.1M
SBA $5.0M + senior + seller note
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: 2024 FDD
Financial Performance
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.3M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 8
- vs category median 20 · small
- Range (low → high)
- $427K→$2.1M
- Cohort dispersion (min → max)
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 782 Quick-Service Restaurants brands
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: 1.6x.
Fee burden
Total ongoing fee load of 7.0% (near the Quick-Service Restaurants average).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -4.7% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Multi-unit rate
Only 1% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
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 averages
How Fosters Freeze Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 61
- Opened
- 0
- Last reporting year
- Closed
- 2
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 8.2%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Multi-unit owners
- 1.0%
- Net growth (3-yr)
- -4.7%
- Net unit change over 3 years
- 3-yr CAGR
- -4.7%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 5
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 7
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 1
- Franchisor's next-year forecast
- Transfer rate
- 3.3%
- Owners selling to other franchisees
- Continuity rate
- 96.8%
- Units that stayed open
- Ceased ops
- 3.3%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 1 state 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.
1
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 9 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 9
- Loan volume
- $11.6M
- Median loan
- $817K
- 50th percentile
- Charge-off rate
- N/A
- limited sample (9 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 8
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Foster's Freeze presents a cautionary profile due to unit contraction, lack of net income transparency, and unclear unit economics across a wide investment range.
Litigation (Item 3)
No litigation required to be disclosed in Item 3
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Naper CPA Group
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- 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 66 / 100 verdict
- 01MEDSystem shrinking: 61 units with -3.2% YoY decline indicates contraction and potential market saturation concerns
- 02MINORNo Item 19 (Net Income) disclosure: Cannot verify actual profitability; $1.28M average revenue doesn't guarantee positive returns after $178K-$1M investment
- 03MINORWide investment range ($178K-$1M): Suggests vastly different unit economics; unclear what drives 465% variance in initial investment
- 04MINORRoyalty structure complexity: 4-8% royalties on gross (not net) sales creates cash flow burden regardless of profitability
- 05MINORModest average revenue: $1.28M for quick-service/frozen dessert is acceptable but tight margin for covering 4-8% royalties plus labor and COGS
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory population | 50,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Non-compete (miles)ℹ | 2 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Chino Hills, California |
| Jury trial waiver | Yes |
| Governing law | State where franchisee's restaurant is located |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed in Item 3
Items 10, 11
Training & Operations
- Classroom training
- 69 hrs
- On-the-job training
- 91 hrs
- Training location
- Franchised location in California or Georgia, training center in Salinas CA, or corporate offices in Chino Hills CA
- Ongoing training
- Required
- Time to open
- 9 mo
- From signing to launch
- Site selection
- Franchisee selects site, franchisor approves
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
63 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Fosters Freeze · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Fosters Freeze franchise?
The total investment to open a Fosters Freeze franchise ranges from $612K – $1.0M, with an initial franchise fee of $45K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Fosters Freeze franchise owners earn?
According to Item 19 of the Fosters Freeze FDD, the average gross sales per unit is $1.3M. 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 Item 19 in the Fosters Freeze 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 Fosters Freeze FDD and qualifies whose outlets they describe.
What is Fosters Freeze's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Fosters Freeze (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Fosters Freeze franchise locations are there?
As of their most recent FDD filing, Fosters Freeze has 61 total units in the United States, including 61 franchised units and 0 company-owned units.
Is Fosters Freeze a good franchise to buy?
FranchiseVerdict rates Fosters Freeze as a A-grade franchise with a verdict score of 66 out of 100 (higher is better), 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
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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.