HobbyTown Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
HobbyTown is a specialty-retail franchise selling hobby products, models, RC vehicles, drones, games, and crafts. Franchisees run stores managing inventory, hobby expertise, and community events.
FranchiseVerdict summary · 2026
A HobbyTown franchise requires a total initial investment of $327K – $458K, including a $50K franchise fee and an ongoing 4.8% royalty[2]. Per the 2026 FDD, average unit revenue was $1.6M[2]. SBA 7(a) loans show a 14.2% charge-off rate across 165 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $327K – $458K
- 37th pct Retail
- Avg gross sales
- $1.6M
- 15th pct Retail
- Royalty
- 4.8%
- 6th pct Retail
- Units
- 94
- 27th pct Retail
- SBA charge-off
- 14.2%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Retail · color = vs category peers
Green = favorable by >10% vs Retail 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 $327K – $458K including a $50K franchise fee, 4.8% ongoing royalty.
- RETURNSAverage unit revenue of $1.6M/year (median $1.4M), with an estimated 12% cash-on-cash return (based on Adjusted Operating Income).
- RISKVerdict A (Strongest tier), verdict score 73/100 (higher is better). SBA loan charge-off rate of 14.2% across 165 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- DECLINESystem contracting at -11.3% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Hobby Town Unlimited, Inc.
- Parent company
- AMain.com, Inc.
- Predecessor
- Hobby Town (partnership operated by Merlin P. Hayes and Thomas A. Walla)
- Prior franchisor entity
- CEO title
- President
- Robert Wilke
- Incorporated in
- Nebraska
- HQ
- 2930 Ridge Line Road, Suite 201, Lincoln, Nebraska 68516
- Auditor
- K Coe Isom, LLP
- Audited financials
- Franchisor revenue
- $3.7M
- vs $5.7M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Robert Wilke
- Headquarters
- Nebraska
- Founded
- 1985
- FDD year
- 2026
- States available
- 33
Can you afford it, and what does the money buy?
Entry cost is about average for a retail franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown17 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $50K | $50K | |
| Travel and Living Expenses While Training | $2K | $4K | |
| Inventory | $150K | $300K | |
| Retail Fixtures | $40K | $80K | |
| Activity Area Material | $2K | $5K | |
| Flooring, Painting, and Improvements | $17K | $32K | |
| Shipping | $3K | $8K | |
| Point of Sale Computer | $6K | $9K | |
| Exterior Sign(s) | $6K | $15K | |
| Low Voltage Network for Computer Information System, Security System and Credit Card Machines | $3K | $4K | |
| Other Equipment | $3K | $10K | |
| Real Property and Miscellaneous Including Rent, Security Deposit, Utilities, Insurance and Phone | $8K | $15K | |
| Initial Advertising | $30K | $30K | |
| Supplies | $4K | $7K | |
| Other Labor for Store Set-up | $4K | $8K | |
| Loan Fees/Interest | $0 | $5K | |
| Additional Funds (3 Months) | $23K | $40K | |
| Total initial investment | $350K | $620K |
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
- $327K – $458K
- Top 40% of category vs category
- Liquid capital req'd
- $23K – $40K
- Top 40% of category vs category
- Franchise fee
- $50K – $50K
- Top 40% of category vs category
- Royalty
- 4.8%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 6.8%
- vs 9–13% typical
- Payback period
- 8.3 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.8% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Transfer fee | $10K |
| Renewal fee | $0 |
| Inventory (initial) | $80K – $100K |
| Total fee load | 6.8% of rev |
A 6.8% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 69% above the retail norm.
Source: FDD 2026 · 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
$134K
8.2% margin
Unlevered ROIC
32%
EBITDA / total invested capital
Payback
3.2 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
FDD-reported earnings vs. model
The FDD reports $86K as Adjusted Operating Income. Our model estimates $134K SLEBITDA from the same revenue using category-average cost assumptions. These numbers differ because Adjusted Operating Income deducts different expense categories than our model.
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 HobbyTown unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
32%
Within 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 HobbyTown units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$407K
on $2.0M purchase
Total debt
$1.6M
SBA $1.0M + 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: 2026 FDD
Financial Performance
- Avg gross sales
- $1.6M
- Per unit, per year
- Median gross sales
- $1.4M
- Avg adjusted operating income
- $86K
- Reported as Adjusted Operating Income in FDD Item 19
- Cash-on-cash
- 12.0%
- Based on Adjusted Operating Income / investment midpoint
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Historical gross revenue, adjusted operating expenses, and adjusted operating income (average/median/high/low) for all Reporting Stores plus 4 quartile sub-tables ranked by Adjusted Operating Income
- Sample size
- 67 outlets
- vs category median 47
- Range (low → high)
- $247K→$5.0M
- Cohort dispersion (min → max)
- Quartile band
- $1.3M→$2.9M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2024
- Transparency
- 10 / 10
- vs category median 3 / 10 · above
Compared against 278 Retail brands
Revenue is 4.1x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
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 $1.6M/year in gross sales. Revenue-to-investment ratio: 4.1x.
Fee burden
Total ongoing fee load of 6.8% — below the Retail average of 8.9%.
Disclosure
Transparency score 10/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -11.3% 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 Retail averages
How HobbyTown Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 94
- Opened
- 2
- Last reporting year
- Closed
- 8
- Terminated
- 2
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 10.6%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 99%
- vs corporate-owned
- Multi-unit owners
- Outlier
- Reported value implausible. See FDD Item 20
- Net growth (3-yr)
- -11.3%
- Net unit change over 3 years
- 3-yr CAGR
- -11.3%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 7
- Terminated (3yr)
- 2
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 1
- Franchisor bought back
- Transfer rate
- 5.3%
- Owners selling to other franchisees
- Ceased ops
- 8.5%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 35 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.
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
- 165
- Loan volume
- $27.8M
- Median loan
- $260K
- 50th percentile
- Charge-off rate
- 14.2%
- 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)
- 85.8%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 12
- Defaults
- 19
- Typical loan rate
- 7.3%
- avg rate to borrowers
- vs industry
- 11.3%
- brand is above its industry ↑
- Jobs supported
- 95
- 1.9 per loan
- Lender concentration
- 20%
- top lender's share
Borrower mix: 47% went to startups / new businesses, 53% to established operators
Top lenders financing HobbyTown franchisees
Showing 3 of 12 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.
Premium insight
SBA Lending Report
Deep-dive into HobbyTown'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
- 6-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 14.2% — 11% 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
HobbyTown presents cautionary-to-high risk due to contracting unit base, negligible franchisee profitability, lack of earnings disclosure, and headwinds in hobby retail—suitable only for operators with deep category expertise and strong local market positioning.
Litigation (Item 3)
No litigation is required to be disclosed in Item 3.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · K Coe Isom, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
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: Yes
Score breakdown · what drove the 73 / 100 verdict
- 01MINORUnit count declining 6.0% YoY (94 units) indicates system contraction and potential market saturation or performance issues
- 02MINORNet income of only $84,160 on $1.46M average revenue (5.8% net margin) is extremely thin after accounting for 4.75% royalties, rent, labor, and inventory
- 03MINORHobby retail sector faces structural headwinds from e-commerce competition and shifting consumer spending toward experiences
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.8% 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 | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | exclusive |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory radius | 5 mi |
| Territory population | 250,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 16 |
| Curable defaultsℹ | 7 |
| Mandatory arbitration | Yes |
| Arbitration location | Lancaster County, Nebraska |
| Jury trial waiver | No |
| Governing law | NE |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation is required to be disclosed in Item 3.
Items 10, 11
Training & Operations
- Classroom training
- 18 hrs
- On-the-job training
- 11 hrs
- Training location
- Corporate office in Lincoln, NE and a franchised retail store in Lincoln, NE
- Ongoing training
- Required
- Field support
- 131 hrs/yr
- On-site visits per year
- Time to open
- 4 mo
- From signing to launch
- Site selection
- Franchisor-assisted: Company provides a referral (ESR Commercial) to assist in site analysis/lease negotiation, and must approve or disapprove the franchisee's proposed site within 21 days (failure to respond = deemed approval)
- Franchisor financing
- Not offered
- Item 10
- POS system
- SmartSuite POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: SmartSuite POS
Item 20 · call current owners
Franchisee Contacts
95 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
HobbyTown · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a HobbyTown franchise?
The total investment to open a HobbyTown franchise ranges from $327K – $458K, 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 HobbyTown franchise owners earn?
According to Item 19 of the HobbyTown FDD, the average gross sales per unit is $1.6M. The median is $1.4M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the HobbyTown 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 HobbyTown FDD and qualifies whose outlets they describe.
What is HobbyTown's franchise failure rate?
Based on SBA 7(a) loan data, HobbyTown has a charge-off rate of 14.2% across 165 loans, meaning 14.2% 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 HobbyTown franchise locations are there?
As of their most recent FDD filing, HobbyTown has 94 total units in the United States, including 94 franchised units and 0 company-owned units. 2 new units were opened in the latest reporting year.
Is HobbyTown a good franchise to buy?
FranchiseVerdict rates HobbyTown as a A-grade franchise with a verdict score of 73 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.