Magnolia Bakery Franchise Cost, Revenue & Review 2026
- Investment
- $594K – $1.2M
- Disclosed sales
- $4.5M
- gross sales, not profit
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Magnolia Bakery is a bakery franchise famous for its banana pudding, cupcakes, and classic American baked goods. Franchisees run the bakeries, managing baking, retail sales, and customer service.
FranchiseVerdict summary · 2026
A Magnolia Bakery franchise requires a total initial investment of $594K – $1.2M, including a $49K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $4.5M[2]. FranchiseVerdict grade: B (Above 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 scored7 of 7 headline figures on this page cite a page of the filing.
Overview
- Investment
- $594K – $1.2M
- 82nd pct Service Resta…
- Avg gross sales
- $4.5M
- Company-owned only
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 11
- 39th 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 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 $594K – $1.2M including a $49K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $4.5M/year (company-owned outlets only - not franchisee performance).
- RISKVerdict B (Above average), verdict score 55/100 (higher is better).
- GROWTHPositive: net +1 franchised outlets in the latest year (1 opened, 0 closed) (Item 20).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Magnolia Bakery International, LLC
- Parent company
- Magnolia Group Holdings, Inc.
- FDD Item 1, page 6 of the 2025 FDD
- CEO title
- Chief Executive Officer and Chief Baking Officer
- Barbara Petracca
- Incorporated in
- DE
- HQ
- 244 West 54th Street, Suite 501, New York, NY 10019
- Auditor
- CohnReznick LLP
- Audited financials
- Franchisor revenue
- $1.8M
- vs $1.5M prior year
Overview
About
- CEO
- Barbara Petracca
- Headquarters
- NY
- Founded
- 2011
- FDD year
- 2025
- States available
- 3
Can you afford it, and what does the money buy?
Entry cost runs 83% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $49K | $49K |
| Working capital (3–6 mo) | $53K | $123K |
| Equipment, build-out, other | $493K | $1.0M |
| Total initial investment | $594K | $1.2M |
Source: Magnolia Bakery 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
- $594K – $1.2M
- Bottom third — review vs category
- Liquid capital req'd
- $53K – $123K
- Bottom third — review vs category
- Franchise fee
- $49K – $49K
- Bottom third — review 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 gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $99 |
| Transfer fee | $25K |
| Renewal fee | $50 |
| Inventory (initial) | $12K – $16K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 357% above the quick-service restaurants norm.
Company-owned outlets only - not franchisee performance
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 Magnolia Bakery 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
$978K
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 Magnolia Bakery 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
Company-owned outlets only - not franchisee performance
- Avg gross sales
- $4.5M
- Per unit, per year
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross revenues and ebitda
- Sample size
- 10 outlets
- vs category median 19
- Range (low → high)
- $2.0M→$8.0MCited, not corroborated — printed on page 46 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
- 6 / 10
- vs category median 4 / 10 · above
Compared against 781 Quick-Service Restaurants brands
Revenue is 5.0x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
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 $4.5M/year in gross sales. Revenue-to-investment ratio: 5.0x. Company-owned outlets only - not franchisee performance.
Fee burden
Total ongoing fee load of 8.0% (near the Quick-Service Restaurants median).
Disclosure
Transparency score 6/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
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 medians
How Magnolia Bakery Compares
Category median of published Quick-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
- 11
- Opened
- 1
- Last reporting year
- Closed
- 0
- Turnover rate
- N/A
- Company-owned
- 10
- Corporate units in the system
- % franchised
- 9%
- vs corporate-owned
Last fiscal year · Item 20 exits and transfers
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 0
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 3 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
3
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
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
Magnolia Bakery presents cautionary risk due to a micro-sized system with no published financials, prior international disputes, and limited growth visibility despite attractive per-unit economics.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
One concluded matter: Eaternity s.a.l. (Off-Shore) v. Magnolia Bakery International LLC (ICC arbitration, filed January 2017). Area representative sued for breach of area representative agreement following termination notice. Settled December 2017 for $349,000 aggregate payable over 48 months.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · CohnReznick LLP
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 55 / 100 verdict
- 01MINOROnly 11 units system-wide with unknown/stagnant growth trajectory raises scalability and viability concerns
- 02MINOR2017 international arbitration settlement ($349K over 48 months) indicates management/execution challenges and operational disputes
- 03MINORHigh initial investment ($594K-$1.19M) relative to small franchise system size creates heightened franchisee risk
- 04MINOR6% royalty on $4.46M average revenue ($267K annually) is substantial margin erosion with unproven unit economics transparency
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 | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| 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 | 6 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | NY |
| Litigation count | 1 |
View Item 3 litigation summary
One concluded matter: Eaternity s.a.l. (Off-Shore) v. Magnolia Bakery International LLC (ICC arbitration, filed January 2017). Area representative sued for breach of area representative agreement following termination notice. Settled December 2017 for $349,000 aggregate payable over 48 months.
Items 10, 11
Training & Operations
- Classroom training
- 38 hrs
- On-the-job training
- 288 hrs
- Training location
- New York, NY (Home Office and Training Bakeries)
- Ongoing training
- Required
- Time to open
- 13 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Toast POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast POS
Item 20 · call current owners
Franchisee Contacts
14 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 Magnolia Bakery franchise?
The total investment to open a Magnolia Bakery franchise ranges from $594K – $1.2M, with an initial franchise fee of $49K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Magnolia Bakery franchise owners earn?
According to Item 19 of the Magnolia Bakery FDD, the average gross sales per unit is $4.5M. Important context: Company-owned outlets only - not franchisee performance. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Magnolia Bakery?
Magnolia Bakery is franchised by Magnolia Bakery International, LLC. Its parent company is Magnolia Group Holdings, Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Magnolia Bakery 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 Magnolia Bakery FDD and qualifies whose outlets they describe.
What is Magnolia Bakery's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Magnolia Bakery (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 Magnolia Bakery franchise locations are there?
As of their most recent FDD filing, Magnolia Bakery has 11 total units in the United States, including 1 franchised units and 10 company-owned units. 1 new units were opened in the latest reporting year.
Is Magnolia Bakery a good franchise to buy?
FranchiseVerdict rates Magnolia Bakery as a B-grade franchise with a verdict score of 55 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.
For franchisors
Are you the franchisor?
If you represent Magnolia Bakery, you can request corrections or provide updated information.
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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.