Kolache FactoryFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Kolache Factory franchise requires a total initial investment of $642K – $937K, including a $45K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $908K[2]. SBA 7(a) loans show a 13.0% charge-off rate across 31 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $642K – $937K
- 89th pct Service Resta…
- Avg gross sales
- $908K
- 30th pct Service Resta…
- Royalty
- 6.0%
- 44th pct Service Resta…
- Units
- 60
- 65th pct Service Resta…
- SBA default
- 13.0%
- 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 2000. Systems this mature have refined operations and brand recognition.
The system contracted 7% year-over-year. Investigate why units are closing.
16% cash-on-cash return (based on EBITDA). Within the 15-30% range most franchise investors consider acceptable.
Bottom line
- Total investment $642K – $937K including a $45K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $908K/year (median $906K), with an estimated 16% cash-on-cash return (based on EBITDA).
- Verdict A (Top Quintile) with a risk score of 34/100. SBA loan charge-off rate of 13.0% across 31 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System contracting at -12.5% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- KF FRANCHISING, LTD.
- Ultimate parent
- Kolache Factory, Inc.
- CEO title
- Managing Partner
- John H. Banks
- CEO experience
- 2000 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- TX
- HQ
- 23240 Westheimer Parkway, Suite A, Katy, Texas 77494
- Auditor
- Lawrence, Blackburn, Meek, Maxey & Co., P.C.
- Audited financials
- Franchisor revenue
- $5.2M
- vs $5.1M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
Kolache Factory franchisees operate quick-service bakery/café units specializing in Czech-style pastries (kolaches), coffee, and light breakfast/lunch items. Day-to-day operations include pre-dawn baking or receiving par-baked products, point-of-sale management, inventory control, and staffing in high-traffic locations (typically 1,500–2,500 sq ft retail spaces).
- CEO
- John H. Banks
- Headquarters
- TX
- Founded
- 2000
- FDD year
- 2025
- States available
- 6
FDD Item 7 · 2025 filing · 17 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $45K | $45K | |
| Real Estate Acquisition and/or Lease Costs | $45K | $120K | |
| Rent, Security and Utility Deposits | $7K | $20K | |
| Architectural, Engineering, Permitting and Legal Fees | $18K | $23K | |
| Leasehold Improvements, Construction | $270K | $360K | |
| Cabinetry & Millwork | $28K | $35K | |
| Equipment, Furniture, & POS System | $175K | $198K | |
| Initial Marketing Expenses | $3K | $5K | |
| Grand Opening Expense | $3K | $10K | |
| Signage | $5K | $15K | |
| Manager and Personnel Training | $3K | $22K | |
| Initial Inventory (Food & Paper Goods) | $10K | $20K | |
| Office Supplies, Uniforms, Freight, Miscellaneous Expenses & Gift Cards | $5K | $15K | |
| Additional Funds/Working Capital - 3 months | $25K | $50K | |
| Development Fee | $20K | $60K | |
| Development Agreement Training | $0 | $3K | |
| Additional Funds - 3 months (Development Agreement) | $4K | $5K | |
| Total initial investment | $665K | $1.0M |
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
$118K
13.0% margin
Unlevered ROIC
14%
EBITDA / total invested capital
Payback
7.0 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $642K – $937K
- Below avg, review vs category
- Liquid capital req'd
- $25K – $50K
- Near category avg vs category
- Franchise fee
- $45K – $45K
- Below avg, review vs category
- Royalty
- 6.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
- Payback period
- 6.2 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $3K |
| Training fee | $350 |
| Transfer fee | $6K |
| Total fee load | 9.0% of rev |
Financial Performance
- Avg gross sales
- $908K
- Per unit, per year
- Median gross sales
- $906K
- Avg ebitda
- $127K
- Reported as EBITDA in FDD Item 19
- Cash-on-cash
- 16.1%
- Based on EBITDA / investment midpoint
- Item 19 type
- gross_sales
- Sample size
- 28 units
- vs category median 28
- Range (low → high)
- $524K→$1.9M
- Cohort dispersion (min → max)
- Quartile band
- $691K→$1.2M
- Bottom 25% → top 25%
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How Kolache Factory Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 60
- Opened
- 0
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 32
- Corporate units in the system
- % franchised
- 47%
- vs corporate-owned
- Multi-unit owners
- 17.6%
- Net growth (yr3)
- -6.7%
- Net unit change last year
- 3-yr CAGR
- -12.5%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 0
- Projected new
- 4
- Franchisor's next-year forecast
- Continuity rate
- 93.3%
- Units that stayed open
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 7 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 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 31
- Loan volume
- $10.2M
- Median loan
- $315K
- 50th percentile
- Charge-off rate
- 13.0%
- 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)
- 87.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 17
- Defaults
- 3
Vintage analysis
Kolache Factory charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Kolache Factory'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 9 states
- Startup risk premium and job creation velocity
- 16-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Contracting franchise system with high capital requirements, undisclosed financial performance standards, and modest profit margins relative to investment creates meaningful risk despite clean litigation history.
Litigation (Item 3)
No litigation required to be disclosed
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Lawrence, Blackburn, Meek, Maxey & Co., P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- 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 34 / 100 rating
- 01MINORUnit count declining 6.7% YoY indicates system contraction and potential franchisee dissatisfaction
- 02MEDNo Item 19 financial performance representation disclosed—actual franchisee earnings may differ significantly from $127k average net income
- 03MINORHigh initial investment ($641k–$937k) relative to modest average net income ($127k) yields 5-7 year payback with no guarantee of achieving averages
- 04MINOR6% royalty on $908k average revenue equals ~$54.5k annual fee, consuming 43% of average net income
- 05MINORDeclining unit base suggests difficulty recruiting and retaining franchisees; may indicate operational or market challenges not yet public
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 | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Radius/Geographic boundaries |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Texas |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed
Items 10, 11
Training & Operations
- Classroom training
- 7 hrs
- On-the-job training
- 220 hrs
- Training location
- Our corporate office in Katy, Texas and Our company Store in the Houston, Texas area
- Ongoing training
- Required
- Field support
- 220 hrs/yr
- On-site visits per year
- POS system
- PAR POS from Partech Systems
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: PAR POS from Partech Systems
Item 20 · call current owners
Franchisee Contacts
30 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Kolache Factory · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Kolache Factory franchise?
The total investment to open a Kolache Factory franchise ranges from $642K – $937K, with an initial franchise fee of $45K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Kolache Factory franchise owners earn?
According to Item 19 of the Kolache Factory FDD, the average gross sales per unit is $908K. The median is $906K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Kolache Factory's franchise failure rate?
Based on SBA 7(a) loan data, Kolache Factory has a charge-off rate of 13.0% across 31 loans, meaning 13.0% 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 Kolache Factory franchise locations are there?
As of their most recent FDD filing, Kolache Factory has 60 total units in the United States, including 28 franchised units and 32 company-owned units.
Is Kolache Factory a good franchise to buy?
FranchiseVerdict rates Kolache Factory as a A-grade franchise with a risk score of 34 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.
For franchisors
Are you the franchisor?
If you represent Kolache Factory, you can request corrections or provide updated information.
Claim this brandOther 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.