Johnny Rockets Franchise Cost, Revenue & Review 2026
- Investment
- $517K – $2.7M
- Disclosed sales
- $1.6M
- gross sales, not profit
- SBA charge-off
- 41.2%
- on 39 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Johnny Rockets is a casual-dining franchise serving classic American burgers, fries, and hand-spun shakes in a retro 1950s diner setting. Franchisees run restaurants managing kitchen and service staff.
FranchiseVerdict summary · 2026
A Johnny Rockets franchise requires a total initial investment of $517K – $2.7M, including a $50K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.6M[2]. SBA 7(a) loans show a 41.2% charge-off rate across 39 loans[1]. FranchiseVerdict grade: D (Below average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2025 filing · Data extracted: · Last cited check: · Staleness risk: medium - a newer filing may exist
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $517K – $2.7M
- 24th pct Service Resta…
- Avg gross sales
- $1.6M
- Net sales8th pct Service Resta…
- Royalty
- 6.0%
- 25th pct Service Resta…
- Units
- 100
- 31st pct Service Resta…
- SBA charge-off
- 41.2%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-Service Restaurants median · 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 $517K – $2.7M including a $50K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.6M/year (median $1.1M).
- RISKVerdict D (Below average), verdict score 31/100 (higher is better). SBA loan charge-off rate of 41.2% across 39 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -2 franchised outlets in the latest year (2 opened, 4 closed) (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Johnny Rockets Licensing, LLC
- Parent company
- FAT Brands Royalty I, LLC
- FDD Item 1, page 9 of the 2025 FDD
- Ultimate parent
- FAT Brands, Inc.
- FDD Item 1, page 9 of the 2025 FDD
- Predecessor
- and Affiliates
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 9720 Wilshire Blvd. Suite 500, Beverly Hills, California 90212
- Auditor
- Macias Gini & O'Connell LLP
- Audited financials
- Franchisor revenue
- $9.4M
- vs $12.7M prior year
Same owner · FDD Item 1, page 9
12 other brands on this site name FAT Brands, Inc. as parent or ultimate parent in their own FDD.
- Buffalo’s CafeB
- Elevation BurgerC
- FatburgerD
- Fazoli'sC
- GREAT AMERICAN COOKIESA
- HOT DOG ON A STICKB
- Hurricane Grill & Wings / Hurricane Burgers Tacos WingsB
- Marble Slab CreameryC
- Native Grill and WingsB
- PretzelmakerB
- Round Table PizzaB
- Twin PeaksA
Portfolio: FAT Brands
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Taylor Wiederhorn
- Headquarters
- CA
- Founded
- 1986
- FDD year
- 2025
- States available
- 24
Can you afford it, and what does the money buy?
Entry cost runs 135% above the typical full-service restaurants franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $25K | $40K |
| Equipment, build-out, other | $442K | $2.6M |
| Total initial investment | $517K | $2.7M |
Source: Johnny Rockets 2025 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
- $517K – $2.7M
- Top 40% of category vs category
- Liquid capital req'd
- $25K – $40K
- Top 40% of category vs category
- Franchise fee
- $50K – $50K
- Top 40% of category vs category
- Royalty
- 6.0%
- 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 net sales |
| Marketing / ad fund | 2.0% |
| Technology fee | $840 |
| Transfer fee | $15K |
| Renewal fee | $0 |
| Inventory (initial) | $7K – $10K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales land near the full-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Johnny Rockets until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$1.6M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Johnny Rockets unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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
Reported as net sales, not gross sales
- Avg gross sales
- $1.6M
- Per unit, per year
- Median gross sales
- $1.1M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- net sales and cost percentages
- Sample size
- 58 outlets
- vs category median 18 · large
- Range (low → high)
- $348K→$6.9MCited, not corroborated — printed on page 69 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 7 / 10
- vs category median 3 / 10 · above
Compared against 801 Full-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 $1.6M/year in gross sales. Median is $1.1M — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 1.0x.
Fee burden
Total ongoing fee load of 8.0% (near the Full-Service Restaurants median).
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -7.5% 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 Full-Service Restaurants medians
How Johnny Rockets Compares
Category median of published Full-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 100
- Opened
- 2
- Last reporting year
- Closed
- 4
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 98%
- vs corporate-owned
- Net growth (3-yr)
- -7.5%
- Net unit change over 3 years
- 3-yr CAGR
- -7.5%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 3
- Reacquired
- 0
- Franchisor bought back
- Projected new
- 4
- Franchisor's next-year forecast
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 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.
Available to sell in · Item 12
- Hawaii
- Michigan
- Minnesota
- South Dakota
States where the franchisor is registered to sell new franchises (FDD registration filings).
Where the owners are · Item 20 owner list
92 current owners across 22 states.
- CA 14
- FL 9
- AZ 7
- NV 7
- TX 7
- CT 5
- NJ 5
- UT 5
- GA 4
- MA 4
- PA 4
- HI 3
- +10 more states
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 39
- Loan volume
- $20.7M
- Median loan
- $500K
- 50th percentile
- Charge-off rate
- 41.2%
- on 39 loans · 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)
- 58.8%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 24
- Defaults
- 14
- Typical loan rate
- 5.8%
- avg rate to borrowers
- Franchised industry avg
- 21.6%
- brand above franchise avg ↑
- Jobs supported
- 1,093
- 5.3 per loan
- Lender concentration
- 10%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Franchise vs independent — in full-service restaurants, franchised businesses charge off at 21.6% vs 22.5% for independents — franchising is associated with 4% lower SBA default risk in this category.
Vintage analysis
Johnny Rockets charge-off rate by loan vintage
Top lenders financing Johnny Rockets franchisees
Showing 3 of 24 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.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Johnny Rockets from SBA 7(a) FOIA data.
- Principal loss rate
- 19.7%
- Avg SBA guarantee
- 75%
- Avg interest rate
- 5.76%
- Avg chargeoff amount
- $291K
- Lender concentration
- 10.3%
- Job velocity
- 5.3 per $100K
- NAICS benchmark
- 24.7%
- NAICS 722110
- Jobs supported
- 1,093
Top SBA lendersTop lender holds 10% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Banc of California | 4 | $2.9M | 50.0% |
| 2 | Wells Fargo Bank National Association | 3 | $872K | 66.7% |
| 3 | PNC Bank, National Association | 3 | $1.4M | 0.0% |
| 4 | KeyBank National Association | 3 | $1.4M | 50.0% |
| 5 | United Business Bank | 3 | $1.8M | 66.7% |
| 6 | First Mid Bank & Trust, National Association | 2 | $271K | 100.0% |
| 7 | NewBank | 2 | $1.8M | 0.0% |
| 8 | Readycap Lending, LLC | 2 | $1.4M | 50.0% |
| 9 | Bath Savings Institution | 2 | $350K | 0.0% |
| 10 | Columbia Bank | 1 | $400K | 100.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| CACalifornia | 11 | 5 | 55.6% |
| NYNew York | 7 | 1 | 16.7% |
| GAGeorgia | 5 | 2 | 40.0% |
| FLFlorida | 4 | 2 | 66.7% |
| ILIllinois | 2 | 2 | 100.0% |
| MEMaine | 2 | 0 | 0.0% |
| MIMichigan | 2 | 1 | 50.0% |
| COColorado | 1 | 1 | 100.0% |
| MDMaryland | 1 | 0 | -- |
| NCNorth Carolina | 1 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
A 41.2% charge-off rate means roughly 1 in 2 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 41.2% — 157% above the 16.0% national norm, i.e. higher 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
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
8 cases disclosed: 1 pending class action (Kates v. FAT Brands 2024); 7 concluded including Matthews/Chipman securities class action (settled $3M), two Virginia state regulatory actions against Fatburger, Shahi v. FBNA (dismissed 2021), P&K v. Buffalo's (dismissed 2019), Rojany/Alden consolidated (settled $50K), Vignola (settled $75K)
Largest disclosed settlement: $2,500,000
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
FAT Brands, Inc. (parent) and subsidiary entities including Johnny Rockets Licensing, LLC filed voluntary Chapter 11 petitions on January 25, 2026 in U.S. Bankruptcy Court for the Southern District of Texas (Case No. 26-90126 ARP) to restructure corporate debt
Audited financials (Item 21)
Yes · Macias Gini & O'Connell LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Figures taken from the only numeric financial statement present in the extracted text: the UNAUDITED interim Johnny Rockets balance sheet as of Sept 28, 2025 and consolidated statement of operations for the period ended Sept 28, 2025. Revenue components: Royalties 7,922,041; Franchise fees 272,862; Advertising fees 1,164,011; Other revenue 7,375. Franchisor (Johnny Rockets Licensing, LLC) carries a member's DEFICIT of 28,319,449 (negative net worth). The audited FY2024 (Dec 29, 2024) / FY2023 (Dec 31, 2023) figures referenced by the auditor's report (Macias Gini & O'Connell LLP, dated April 16, 2025; FY2022 audited by other auditors) were not captured as numeric tables in the extracted text. Parent FAT Brands filed bankruptcy Jan 25, 2026.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 31 / 100 verdict
- 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
- 04MINORHigh initial investment range ($517K-$2.67M) combined with 6% royalty creates significant breakeven burden on $1.64M average sales
- 05HIGHSecurities litigation history and franchise registration disputes in Virginia suggest regulatory compliance and disclosure problems
Severity inferred from the FDD text · not a regulatory classification
Litigation case detail8 matters · Item 3
Litigation cases
Parent, affiliates and predecessor
Pending (1)
Mitchell Kates v. FAT Brands, Inc., Andrew Wiederhorn, Kenneth J. Kuick and Robert G. Rosen
pendingThird-party plaintiff · FAT Brands, Inc. (FAT) · filed 2024-06-07 · United States District Court for the Central District of California · 2:24-cv-04775-MWF-MAA
“Case No. 2:24-cv-04775-MWF-MAA) On June 7, 2024, plaintiff Mitchell Kates, a putative investor in FAT, filed a putative class action lawsuit against FAT, Andrew Wiederhorn, Kenneth J. Kuick and Robert G. Rosen, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934”Page 17 of the 2025 FDD, Item 3
Concluded (7)
Robert J. Matthews, et al., v. FAT Brands, Inc., Andrew Wiederhorn, Ron Roe, Rebecca Hershinger and Ken Kuick
settledThird-party plaintiff · FAT Brands, Inc. · filed 2022-03-18 · United States District Court for the Central District of California · 2:22-cv-01820
“Case No. 2:22-cv-01820). On March 18, 2022, plaintiff Robert J. Matthews, a putative investor in the Company, filed a putative class action lawsuit against the Company, Andrew Wiederhorn, Ron Roe, Rebecca Hershinger and Ken Kuick, asserting claims under Sections 10(b) and 20(a) of the”Page 17 of the 2025 FDD, Item 3
Outcome:“In August 2022, after mediation the parties agreed to settle the litigation. Pursuant to the settlement, FAT agreed to pay on behalf of the defendants $2,500,000 in cash and $500,000 in Class A common stock of FAT to the class plaintiffs, the plaintiffs released all claims against the defendants, and the case was dismissed with prejudice in February 2023.” (page 18)
Ieman Shahi vs. Fatburger North America, Inc., Andrew Alan Wiederhorn, Taylor Andrew Wiederhorn, et al
dismissedBrought by a franchisee · Fatburger North America, Inc. (FBNA) · filed 2019-07-08 · Superior Court for the State of California for the County of Los Angeles · 19STCV23772
“Case No. 19STCV23772 (July 8, 2019). On July 8, 2019, Ieman Shahi (“Shahi”) filed a complaint against FBNA as well as Andrew A. Wiederhorn and Taylor A. Wiederhorn. The Court dismissed Andrew and Taylor Wiederhorn from the lawsuit on January 27, 2021. Shahi sought rescission of an international Multi- Unit Restaurant Agreement entered into by Shahi and FBNA in October 2015”Page 18 of the 2025 FDD, Item 3
Outcome:“FBNA filed a cross complaint on April 13, 2020 asserting that Shahi breached the international Multi-Unit Restaurant Agreement. The case was dismissed on October 21, 2021.” (page 19)
Adam Vignola, et al. v. FAT Brands Inc., et al.
settledThird-party plaintiff · FAT Brands, Inc., its officers, directors and affiliates · filed 2018-08-24 · United States District Court for the Central District of California · 2:18-cv-07469 (also printed as 2:18-cv-07469-PSG-PLA)
“Adam Vignola, et al. v. FAT Brands Inc., et al., United States District Court for the Central District of California, Case No. 2:18-cv-07469. On August 24, 2018, the Original Defendants were named as defendants in a putative securities class action lawsuit entitled”Page 19 of the 2025 FDD, Item 3
Outcome:“On September 25, 2020, the parties executed a Settlement Agreement and Mutual Release pursuant to which lead plaintiffs agreed to dismiss their individual claims against defendants with prejudice in exchange for a payment by or on behalf of defendants of $75,000.”
Eric Rojany, et al. v. FAT Brands Inc., et al.
settledThird-party plaintiff · FAT Brands, Inc., its officers, directors and affiliates · filed 2018-06-07 · Superior Court of California for the County of Los Angeles · BC708539
“In 2018, FAT Brands, its officers, directors and affiliates were named in various putative securities class action lawsuits relating to a decline in the price of FAT’s common stock following its initial public offering in October 2017: Eric Rojany, et al. v. FAT Brands Inc., et al., Superior Court of California for the County of Los Angeles,”Page 19 of the 2025 FDD, Item 3
Outcome:“On January 6, 2021, the parties executed a Settlement Agreement and Mutual Release pursuant to which plaintiff agreed to dismiss his individual claims against defendants with prejudice in exchange for a payment by or on behalf of defendants of $50,000.”
P&K Food Market, Inc. vs. Buffalo's Franchise Concepts, Inc., Fog Cutter Capital Group, Shaun Curtis, Andy Wiederhorn et al.
dismissedBrought by a franchisee · Buffalo's Franchise Concepts, Inc. and Fog Cutter Capital Group · filed 2018-07-13 · Superior Court of California for the County of Los Angeles · 18STLC09534
“18STLC09534 (July 13, 2018). On July 13, 2018, P&K Food Market, Inc. (“P&K”) filed a complaint against Buffalo’s Franchise Concepts, Inc., Fog Cutter Capital Group, Shaun Curtis, and Andy Wiederhorn for Breach of Contract, Fraudulent Misrepresentation and Unlawful Offer and Sale of Franchise By Means of Untrue Statements or Omissions of Material Fact”Page 19 of the 2025 FDD, Item 3
Outcome:“The lawsuit seeks general damages, special damages, punitive damages, restitution, interest, costs and attorneys’ fees and costs related to the alleged unlawful sale of the Palmdale restaurant. The case was dismissed on February 13, 2019.”
Commonwealth of Virginia ex rel. State Corporation Commission v. Fatburger North America, Inc.
settledGovernment or regulatory action · Fatburger North America, Inc. (FBNA) · Virginia State Corporation Commission · SEC-2022-00034
“(Case No. SEC-2022-00034, Settlement Order entered Jul. 12, 2023, Final Order entered Oct. 23, 2023). This matter involves allegations by the Virginia State Corporation Commission’s Division of Securities and Retail Franchising that Fatburger North America, Inc., offered and sold 3 Virginia franchises at a time”Page 18 of the 2025 FDD, Item 3
Outcome:“FBNA reached a settlement in principle in May 2023, without admitting or denying the allegations, and agreed: (a) to offer the affected franchisees an opportunity to rescind their franchises; (b) to pay $27,000 to the Commonwealth of Virginia”
Commonwealth of Virginia ex rel. State Corporation Commission v. Fatburger North America, Inc. (No. SEC-2022-0042)
settledGovernment or regulatory action · Fatburger North America, Inc. (FBNA) · Virginia State Corporation Commission · SEC-2022-0042
“This matter involves allegations by the Virginia State Corporation Commission’s Division of Securities and Retail Franchising (the “Division”) that Fatburger North America, Inc., when seeking an exemption from the registration requirements of the Virginia Retail Franchising Act, incorrectly stated its total stockholder”Page 18 of the 2025 FDD, Item 3
Outcome:“Without admitting or denying the allegations, FBNA made an offer of settlement in the amount of Five thousand Dollars ($5,000) in civil penalty and Five Hundred Dollars ($500) to defray the costs of investigation.”
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
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 | 15 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles, California |
| Governing law | CA |
| Litigation count | 8 |
View Item 3 litigation summary
8 cases disclosed: 1 pending class action (Kates v. FAT Brands 2024); 7 concluded including Matthews/Chipman securities class action (settled $3M), two Virginia state regulatory actions against Fatburger, Shahi v. FBNA (dismissed 2021), P&K v. Buffalo's (dismissed 2019), Rojany/Alden consolidated (settled $50K), Vignola (settled $75K)
Items 10, 11
Training & Operations
- Classroom training
- 44 hrs
- On-the-job training
- 256 hrs
- Training location
- Corporate offices in Beverly Hills, CA or certified training restaurants
- Ongoing training
- Required
- Time to open
- 8 mo
- From signing to launch
- Site selection
- Franchisor must approve; franchisee must use franchisor-designated real estate broker
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
92 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Johnny Rockets franchise?
The total investment to open a Johnny Rockets franchise ranges from $517K – $2.7M, 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 Johnny Rockets franchise owners earn?
According to Item 19 of the Johnny Rockets FDD, the average gross sales per unit is $1.6M. The median is $1.1M. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Johnny Rockets?
Johnny Rockets is franchised by Johnny Rockets Licensing, LLC. Its parent company is FAT Brands Royalty I, LLC. The ultimate parent named in the FDD is FAT Brands, Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Johnny Rockets 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 Johnny Rockets FDD and qualifies whose outlets they describe.
What is Johnny Rockets's franchise failure rate?
Based on SBA 7(a) loan data, Johnny Rockets has a charge-off rate of 41.2% across 39 loans, meaning 41.2% 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 Johnny Rockets franchise locations are there?
As of their most recent FDD filing, Johnny Rockets has 100 total units in the United States, including 98 franchised units and 2 company-owned units. 2 new units were opened in the latest reporting year.
Is Johnny Rockets a good franchise to buy?
FranchiseVerdict rates Johnny Rockets as a D-grade franchise with a verdict score of 31 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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.