Mellow MushroomFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Mellow Mushroom franchise requires a total initial investment of $1.3M – $4.8M, including a $50K franchise fee and an ongoing 5.0% royalty[2]. Per the 2026 FDD, average unit revenue was $2.7M[2]. SBA 7(a) loans show a 15.0% charge-off rate across 142 loans[1]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $1.3M – $4.8M
- 45th pct Service Resta…
- Avg gross sales
- $2.7M
- 24th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 161
- 44th pct Service Resta…
- SBA default
- 15.0%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-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 1987. Systems this mature have refined operations and brand recognition.
Franchised units fell from 158 to 156 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $1.3M – $4.8M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.7M/year (median $2.6M).
- Verdict B (Above Average) with a risk score of 61/100. SBA loan charge-off rate of 15.0% across 142 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Home-Grown Industries of Georgia, Inc.
- Incorporated in
- GA
- HQ
- 150 Great Southwest Parkway, Atlanta, Georgia 30336
- Auditor
- Bennett Thrasher LLP
- Audited financials
- Franchisor revenue
- $62.7M
- vs $63.6M prior year
Overview
About
Franchisees operate fast-casual pizzerias serving specialty pies, craft beer, and casual dining. Day-to-day responsibilities include managing kitchen and front-of-house staff, managing inventory/food costs, executing brand recipes and quality standards, and driving local marketing and customer acquisition.
- CEO
- Richard A. Brasch
- Headquarters
- GA
- Founded
- 1975
- FDD year
- 2026
- States available
- 15
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $25K | $60K |
| Equipment, build-out, other | $1.3M | $4.7M |
| Total initial investment | $1.3M | $4.8M |
Source: Mellow Mushroom 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
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
$268K
10.0% margin
Unlevered ROIC
9%
EBITDA / total invested capital
Payback
11.7 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.3M – $4.8M
- Near category avg vs category
- Liquid capital req'd
- $25K – $60K
- Better than avg vs category
- Franchise fee
- $50K – $50K
- Better than avg vs category
- Royalty
- 5.0%
- Weekly Gross Sales · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $700 |
| Transfer fee | $10K |
| Renewal fee | $10K |
| Inventory (initial) | $51K – $75K |
| Total fee load | 8.0% of rev |
Financial Performance
- Avg gross sales
- $2.7M
- Per unit, per year
- Median gross sales
- $2.6M
- Item 19 type
- gross_sales
- Sample size
- 154 units
- vs category median 13 · large
- Range (low → high)
- $991K→$6.1M
- Cohort dispersion (min → max)
- Quartile band
- $1.7M→$3.8M
- Bottom 25% → top 25%
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Reporting year
- 2025
- Fiscal year the figures cover
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 1264 Full-Service Restaurants brands
Revenue is only 0.9x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
vs Full-Service Restaurants averages
How Mellow Mushroom Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 161
- Opened
- 0
- Last reporting year
- Closed
- 4
- Turnover rate
- 2.5%
- Company-owned
- 5
- Corporate units in the system
- % franchised
- 97%
- vs corporate-owned
- Net growth (yr3)
- -3.1%
- Net unit change last year
- 3-yr CAGR
- -1.3%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 5
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 2
- Transfers (3yr)
- 1
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 50.0%
- Franchisor-initiated terminations
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 13 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
- Indiana
- Michigan
- South Dakota
- Wisconsin
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 142
- Loan volume
- $143.5M
- Median loan
- $756K
- 50th percentile
- Charge-off rate
- 15.0%
- 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)
- 85.0%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 40
- Defaults
- 18
Vintage analysis
Mellow Mushroom 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 Mellow Mushroom'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 15 states
- Startup risk premium and job creation velocity
- 28-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
Mellow Mushroom presents meaningful caution due to declining unit count, missing profitability data, and high capital requirements relative to system contraction.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Largest disclosed settlement: $50,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Bennett Thrasher LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 61 / 100 rating
- 01MEDUnit count declined 3.1% YoY (161 units) indicating system contraction and potential market saturation or franchisee struggles
- 02MEDNet income not disclosed in Item 19 — impossible to assess actual profitability despite $2.68M average revenue; royalty burden at 5% unclear without expense breakdown
- 03MINORHigh investment range ($1.33M-$4.84M) with wide variance suggests inconsistent unit economics or significant location-dependent costs
- 04MINOR15-year term locks franchisee into long commitment with shrinking support network and declining peer learning community
- 05HIGHNo litigation disclosed but declining units may mask underlying franchisee disputes, quality issues, or brand weakness
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 | 15 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 15 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 7 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Georgia |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 115 hrs
- On-the-job training
- 152 hrs
- Training location
- On-site and off-site
- Site selection
- joint
- POS system
- Aloha Table Service Point-of-Sale
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Aloha Table Service Point-of-Sale
Item 20 · call current owners
Franchisee Contacts
134 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Mellow Mushroom · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Mellow Mushroom franchise?
The total investment to open a Mellow Mushroom franchise ranges from $1.3M – $4.8M, 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 Mellow Mushroom franchise owners earn?
According to Item 19 of the Mellow Mushroom FDD, the average gross sales per unit is $2.7M. The median is $2.6M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Mellow Mushroom's franchise failure rate?
Based on SBA 7(a) loan data, Mellow Mushroom has a charge-off rate of 15.0% across 142 loans, meaning 15.0% 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 Mellow Mushroom franchise locations are there?
As of their most recent FDD filing, Mellow Mushroom has 161 total units in the United States, including 158 franchised units and 5 company-owned units.
Is Mellow Mushroom a good franchise to buy?
FranchiseVerdict rates Mellow Mushroom as a B-grade franchise with a risk score of 61 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.
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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.