Johnny Rockets
Formerly known as JRL Group
Bottom line
- Total investment $517K – $2.7M including a $50K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $1.6M/year (median $1.1M).
- Rated MODERATE with a risk score of 57/100. SBA loan default rate of 0.0% across 53 loans (below the industry average).
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Johnny Rockets unit return on the cash you put in?
Unlevered ROIC · per unit
15%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Johnny Rockets units return on equity?
Equity IRR · 5-yr
37.6%
4.93× MOIC
Year-1 DSCR
2.21×
EBITDA ÷ debt service
Equity required
$4.2M
on $13.1M purchase
Total debt
$8.9M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate casual dining restaurants serving American comfort food (burgers, milkshakes, hot dogs) with retro 1950s-themed environments. Day-to-day operations involve managing kitchen and front-of-house staff, inventory procurement, customer service, food preparation oversight, and local marketing to drive traffic and manage P&L across multiple revenue streams (food, beverages, merchandise).
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 22 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Johnny Rockets operates in a contracting system with undisclosed profitability, active litigation against parent company, and going concern issues, making this a high-risk investment requiring extensive validation.
Score breakdown · what drove the 57 / 100 rating
- 01MINORUnit count declining 2.0% YoY with only 100 locations suggests system contraction and potential saturation or performance issues
- 02HIGHMultiple active litigation matters including putative investor class action against parent company FAT Brands raises governance and transparency concerns
- 03MEDNet income not disclosed in FDD Item 19 prevents accurate ROI assessment despite $1.64M average revenue
- 04HIGHGoing concern notation indicates FAT Brands has substantial doubt about continuity, signaling financial distress at corporate level
- 05MINORHigh initial investment range ($517K-$2.67M) combined with 6% royalty creates significant breakeven burden on $1.64M average sales
- 06HIGHSecurities litigation history and franchise registration disputes in Virginia suggest regulatory compliance and disclosure problems
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
92 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Johnny Rockets · FDD (2025) PDF