House of Bread Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
House of Bread is a bakery franchise serving fresh-baked breads, pastries, and baked goods. Franchisees run the bakeries, managing baking, retail sales, and customer service.
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]. The 2025 FDD does not disclose unit-level revenue (no Item 19). FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $198K – $584K
- 23rd pct Service Resta…
- Avg gross sales
- N/A
- Incl. company outlets
- Royalty
- 6.0%
- 46th pct Service Resta…
- Units
- 6
- 27th 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 $198K – $584K including a $35K franchise fee, 6.0% ongoing royalty.
- RETURNSFY2024 total operating revenue: Royalties $239,798 + Other operating revenue $785 (no initial franchise fees in 2024). FY2023 total operating revenue $294,738. Audited by independent auditor (report dated April 5, 2025, St. George, Utah); audit firm name not present in extracted text. Going concern language is standard.
- RISKVerdict B (Above average), verdict score 48/100 (higher is better).
- DATAItem 19 reports historical financial performance rather than annual gross sales, so unit revenue is not directly comparable. Ask franchisees directly for full unit-level revenue.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- 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
- $241K
- vs $295K prior year
Overview
About
- CEO
- Sheila McCann
- Headquarters
- CA
- Founded
- 1996
- FDD year
- 2025
- States available
- 5
Can you afford it, and what does the money buy?
Entry cost runs 41% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown19 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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $198K – $584K
- Top 40% of category vs category
- Liquid capital req'd
- N/A
- Cash you must have on hand
- Franchise fee
- $35K – $35K
- Middle of category vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
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 |
| Inventory (initial) | $9K – $9K |
| Total fee load | 8.0% of rev |
What do units actually make?
Source: FDD 2025 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
House of Bread did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one House of Bread 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
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
FY2024 total operating revenue: Royalties $239,798 + Other operating revenue $785 (no initial franchise fees in 2024). FY2023 total operating revenue $294,738. Audited by independent auditor (report dated April 5, 2025, St. George, Utah); audit firm name not present in extracted text. Going concern language is standard.
Includes company-owned outlets
- Item 19 type
- historical financial performance
- Sample size
- 7
- vs category median 20 · small
- Range (low → high)
- $249K→$1.1M
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 6 / 10
- vs category median 4 / 10 · above
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.
Fee burden
Total ongoing fee load of 8.0% (near the Quick-Service Restaurants average).
Disclosure
Item 19 reports historical financial performance rather than annual gross sales, so unit revenue is not directly comparable.
Operator retention
System shrank 33.3% over 3 years — 1 closures. Ask existing franchisees about local market conditions.
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 House of Bread Compares
Is the system healthy?
Source: FDD 2025 · Item 20
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
- 25.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 67%
- vs corporate-owned
- Net growth (3-yr)
- -33.3%
- Net unit change over 3 years
- 3-yr CAGR
- -33.3%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 1
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- 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 · 4 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
- N/A
- limited sample (5 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
- 3
- 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
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: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 48 / 100 verdict
- 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
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% 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 | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | exclusive |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory population | 80,000 |
| Online sales rightsℹ | Granted |
| Franchisor can compete | No |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 50 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | Yes |
| Arbitration location | California |
| Jury trial waiver | No |
| Governing law | CA |
| 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
- San Luis Obispo, CA (franchisor HQ) and franchisee's community
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- Franchisee selects site subject to franchisor approval; HOB assists with real estate guide, population density, traffic patterns
- Franchisor financing
- Not offered
- Item 10
- POS system
- Toast
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast
Item 20 · call current owners
Franchisee Contacts
4 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?
House of Bread does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Item 19 in the House of Bread 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 House of Bread FDD and qualifies whose outlets they describe.
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 B-grade franchise with a verdict score of 48 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
Are you the franchisor?
If you represent House of Bread, you can request corrections or provide updated information.
Other Quick-Service Restaurants franchises
Compare similar franchise opportunities in the Quick-Service Restaurants category
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.