House of BreadFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A House of Bread franchise requires a total initial investment of $198K – $584K, including a $35K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $699K[2]. Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $198K – $584K
- 30th pct Service Resta…
- Avg gross sales
- $699K
- 21st pct Service Resta…
- Royalty
- 6.0%
- 44th pct Service Resta…
- Units
- 6
- 25th pct Service Resta…
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-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 1999. Systems this mature have refined operations and brand recognition.
The system contracted 20% year-over-year. Investigate why units are closing.
20% cash-on-cash return (based on P&L Bottom Line). Within the 15-30% range most franchise investors consider acceptable.
Bottom line
- Total investment $198K – $584K including a $35K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $699K/year (median $667K), with an estimated 20% cash-on-cash return (based on P&L Bottom Line).
- Verdict F (Bottom Quintile) with a risk score of 88/100.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- House of Bread Franchising Inc.
- Ultimate parent
- None
- CEO title
- President
- Sheila McCann
- CEO experience
- 28 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- CA
- HQ
- 299 Marsh St. San Luis Obispo, Ca 93401
- Auditor
- Kezos & Dunlavy
- Audited financials
- Franchisor revenue
- $295K
- vs $241K prior year
Overview
About
House of Bread franchisees operate neighborhood bakery retail locations, likely producing and selling fresh baked goods (breads, pastries, etc.) to walk-in customers. Daily operations involve inventory management, production scheduling, customer service, and staff management in a food service environment with seasonal demand volatility.
- CEO
- Sheila McCann
- Headquarters
- CA
- Founded
- 1998
- FDD year
- 2025
- States available
- 3
FDD Item 7 · 2025 filing · 19 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee (Senior Bakery)not refundable | $35K | $35K | |
| Travel and Living Expense While Training (Senior Bakery) | $1K | $5K | |
| Equipment (Senior Bakery) | $45K | $170K | |
| Build Out and Lease (Senior Bakery) | $74K | $326K | |
| Pre-opening and First Year Advertising (Senior Bakery) | $15K | $15K | |
| Marketing Materials (Senior Bakery) | $5K | $5K | |
| Miscellaneous Opening Expense (Senior Bakery) | $5K | $8K | |
| Informational System (Senior Bakery) | $8K | $8K | |
| Legal, Accounting, Professional Fees (Senior Bakery) | $1K | $3K | |
| Food Supplies (Senior Bakery) | $9K | $9K | |
| Initial Franchise Fee (Junior)not refundable | $10K | $10K | |
| Travel and Living Expense While Training (Junior) | $1K | $3K | |
| Equipment (Junior) | $2K | $6K | |
| Build Out and Lease (Junior) | $7K | $47K | |
| Pre-opening Advertising (Junior) | $5K | $5K | |
| Marketing Materials (Junior) | $5K | $5K | |
| Miscellaneous Opening Expense (Junior) | $1K | $3K | |
| Information System (Junior) | $8K | $8K | |
| Food Supplies (Junior) | $3K | $3K | |
| Total initial investment | $240K | $674K |
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
$98K
14.0% margin
Unlevered ROIC
21%
EBITDA / total invested capital
Payback
4.7 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $198K – $584K
- Better than avg vs category
- Liquid capital req'd
- N/A
- Below avg, review vs category
- Franchise fee
- $10K – $35K
- Near category avg vs category
- Royalty
- 6.0%
- Gross Revenue · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
- Payback period
- 5.1 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Transfer fee | $10K |
| Renewal fee | $5K |
| Total fee load | 8.0% of rev |
Financial Performance
- Avg gross sales
- $699K
- Per unit, per year
- Median gross sales
- $667K
- Avg p&l bottom line
- $77K
- Reported as P&L Bottom Line in FDD Item 19
- Cash-on-cash
- 19.6%
- Based on P&L Bottom Line / investment midpoint
- Item 19 type
- Historical
- Sample size
- 7 units
- vs category median 28 · small
- Range (low → high)
- $249K→$1.1M
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How House of Bread Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 6
- Opened
- 0
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 16.7%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 67%
- vs corporate-owned
- Net growth (yr3)
- -20.0%
- Net unit change last year
- 3-yr CAGR
- -33.3%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 0
- Projected new
- 2
- Franchisor's next-year forecast
- Continuity rate
- 80.0%
- Units that stayed open
- Ceased ops
- 16.7%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 31 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 loan disclosures. This brand has only 5 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 5
- Loan volume
- $1.5M
- Median loan
- $315K
- 50th percentile
- Charge-off rate
- 0.0%
- 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)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 3
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into House of Bread's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 3 lenders with concentration factor
- Per-state charge-off rates across 3 states
- Startup risk premium and job creation velocity
- 4-year lending trend
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
House of Bread presents HIGH RISK due to rapid unit contraction, going concern status, marginal unit profitability, and system too small to provide reliable data or franchisee support infrastructure.
Litigation (Item 3)
No litigation required to be disclosed
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Kezos & Dunlavy
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 88 / 100 rating
- 01MEDSystem contraction: 20% unit decline YoY (6 units) signals franchisee dissatisfaction or system failure
- 02HIGHGoing Concern warning: Financial viability of franchisor is questioned, increasing operational support risk
- 03MINORThin unit margins: Net income of only $76,767 on $699,495 revenue (11% net margin) leaves little buffer for cost increases or underperformance
- 04MINORSmall system size: Only 6 units makes system-wide data unreliable and limits peer support/learning network
- 05MINORHigh investment-to-earnings ratio: $198k-$584k investment against $76k average net income yields 2.6-7.6 year simple payback with zero growth trajectory
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 | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | Zip Codes |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory population | 20,000 |
| Online sales rightsℹ | Granted |
| 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 | Yes |
| Jury trial waiver | No |
| Governing law | California |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed
Items 10, 11
Training & Operations
- Classroom training
- 56 hrs
- On-the-job training
- 218 hrs
- Training location
- franchisee's community
- Time to open
- 12 mo
- From signing to launch
- POS system
- Toast
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast
Item 20 · call current owners
Franchisee Contacts
33 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
House of Bread · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a House of Bread franchise?
The total investment to open a House of Bread franchise ranges from $198K – $584K, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do House of Bread franchise owners earn?
According to Item 19 of the House of Bread FDD, the average gross sales per unit is $699K. The median is $667K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is House of Bread's franchise failure rate?
SBA 7(a) loan charge-off data is not available for House of Bread (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 House of Bread franchise locations are there?
As of their most recent FDD filing, House of Bread has 6 total units in the United States, including 4 franchised units and 2 company-owned units.
Is House of Bread a good franchise to buy?
FranchiseVerdict rates House of Bread as a F-grade franchise with a risk score of 88 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.