Kolache Factory Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Kolache Factory is a quick-service bakery-cafe franchise specializing in Czech-style kolaches with sweet and savory fillings. Franchisees run the shops, managing in-house baking, coffee service, and counter operations.
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]. The 2025 FDD does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 13.0% charge-off rate across 31 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $642K – $937K
- 85th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 6.0%
- 46th pct Service Resta…
- Units
- 60
- 69th pct Service Resta…
- SBA charge-off
- 13.0%
- % of SBA 7(a) loans not repaid · median varies by category
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 $642K – $937K including a $45K franchise fee, 6.0% ongoing royalty.
- RETURNSItem 19 reports franchised Store Sales (all revenues incl. catering, excl. sales tax/coupons/employee discounts). Most recent FY2024: 28 franchised stores, tiered High/Medium/Low groups of ~10/10/8 stores. avg/median shown here are the mid 'Medium' tier; top/bottom quartile = High-tier and Low-tier averages. Highest single store $1,919,284, lowest $524,001. Franchisor's own audited financials (KF Franchising, Ltd., Texas LP) are in Exhibit A but the statement figures are not present in this text extract.
- RISKVerdict A (Strongest tier), verdict score 68/100 (higher is better). SBA loan charge-off rate of 13.0% across 31 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- DECLINESystem 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
Corporate structure & franchisor financials
- Legal entity
- KF Franchising, Ltd.
- Parent company
- Kolache Factory Management, L.L.C. (general partner)
- Ultimate parent
- Kolache Factory, Inc.
- Predecessor
- Kolache Factory, Inc.
- Prior franchisor entity
- 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
- $5.1M
- vs $5.2M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- John H. Banks
- Headquarters
- TX
- Founded
- 1982
- FDD year
- 2025
- States available
- 6
Can you afford it, and what does the money buy?
Entry cost runs 20% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown17 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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $642K – $937K
- Bottom third — review vs category
- Liquid capital req'd
- $25K – $50K
- Middle of category vs category
- Franchise fee
- $45K – $45K
- Bottom third — review vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
- Payback period
- 11.3 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 | $640 |
| Training fee | $3K |
| Transfer fee | $6K |
| Inventory (initial) | $10K – $20K |
| Total fee load | 9.0% of rev |
What do units actually make?
Source: FDD 2025 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
FDD-reported earnings vs. model
The FDD reports $127K as ESTIMATED Average/Median Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA).
Kolache Factory 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 Kolache Factory unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
12%
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
Item 19 reports franchised Store Sales (all revenues incl. catering, excl. sales tax/coupons/employee discounts). Most recent FY2024: 28 franchised stores, tiered High/Medium/Low groups of ~10/10/8 stores. avg/median shown here are the mid 'Medium' tier; top/bottom quartile = High-tier and Low-tier averages. Highest single store $1,919,284, lowest $524,001. Franchisor's own audited financials (KF Franchising, Ltd., Texas LP) are in Exhibit A but the statement figures are not present in this text extract.
- Item 19 type
- gross sales tiered
- Sample size
- 28 outlets
- vs category median 20
- Range (low → high)
- $524K→$1.9M
- Cohort dispersion (min → max)
- Quartile band
- $691K→$1.2M
- Bottom 25% → top 25%
- 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 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 9.0% (near the Quick-Service Restaurants average).
Disclosure
Item 19 reports gross sales tiered rather than annual gross sales, so unit revenue is not directly comparable.
Operator retention
System contracting at -12.5% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Multi-unit rate
Only 18% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
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 Kolache Factory Compares
Is the system healthy?
Source: FDD 2025 · Item 20
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
- 3.6%
- Company-owned
- 32
- Corporate units in the system
- % franchised
- 47%
- vs corporate-owned
- Multi-unit owners
- 17.6%
- Net growth (3-yr)
- +3.3%
- Net unit change over 3 years
- 3-yr CAGR
- -12.5%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 2
- Closed (3yr)
- 1
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 3
- Franchisor bought back
- 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
- Typical loan rate
- 6.2%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand above franchise avg ↑
- Jobs supported
- 224
- 2.2 per loan
- Lender concentration
- 19%
- top lender's share
Borrower mix: 75% went to startups / new businesses, 25% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Vintage analysis
Kolache Factory charge-off rate by loan vintage
Top lenders financing Kolache Factory franchisees
Showing 3 of 17 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.
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.
What could kill this investment?
SBA loans charge off at 13.0% — 19% below the 16.0% national norm, i.e. lower 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
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 in Item 3.
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: 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 68 / 100 verdict
- 01MINORUnit count declining 6.7% YoY indicates system contraction and potential franchisee dissatisfaction
- 02MINORHigh initial investment ($641k–$937k) relative to modest average net income ($127k) yields 5-7 year payback with no guarantee of achieving averages
- 03MINOR6% royalty on $908k average revenue equals ~$54.5k annual fee, consuming 43% of average net income
- 04MINORDeclining 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
What are you signing up for?
Ongoing fees run about 9.0% 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 | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | none |
| Protected territory | No |
| 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 |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | No |
| Governing law | TX |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed in Item 3.
Items 10, 11
Training & Operations
- Classroom training
- 7 hrs
- On-the-job training
- 220 hrs
- Training location
- Houston, Texas area / Katy, Texas corporate office
- Ongoing training
- Required
- Field support
- 220 hrs/yr
- On-site visits per year
- Time to open
- 9 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- PAR POS (Partech Systems)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: PAR POS (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?
Kolache Factory 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 Kolache Factory 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 Kolache Factory FDD and qualifies whose outlets they describe.
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 verdict score of 68 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?
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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.