Mr. Gatti's Franchise Cost, Revenue & Review 2026
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Mr. Gatti's franchise requires a total initial investment of $195K – $604K, including a $25K franchise fee and an ongoing 5.0% royalty[2]. Per the latest FDD, average unit revenue was $716K[2]. SBA 7(a) loans show a 34.8% charge-off rate across 23 loans[1]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified
Overview
- Investment
- $195K – $604K
- 9th pct Service Resta…
- Avg gross sales
- $716K
- 5th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 98
- 43rd pct Service Resta…
- SBA charge-off
- 34.8%
- % 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 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
- Total investment $195K – $604K including a $25K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $716K/year (median $739K).
- Verdict C (Average), verdict score 40/100 (higher is better). SBA loan charge-off rate of 34.8% across 23 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Mr. Gatti's Operating, LLC
- Parent company
- Mr. Gatti's Pizza, LLC
- Predecessor
- Mr. Gatti's Pizza, LLC (MGPLLC); Mr. Gatti's, LP (MGLP)
- Prior franchisor entity
- CEO title
- Manager, President and Chief Executive Officer
- R.J. Phillips, Jr.
- Incorporated in
- Delaware
- HQ
- 550 Bailey Ave., Suite 650, Fort Worth, Texas 76107
- Franchisor revenue
- $10.5M
- Most recent fiscal year
Overview
About
Mr. Gatti's Delivery and Carry-out Pizza Facility (DELCO), a +/- 1,200 sq ft format offering pizza, pasta, wings and salad for online, phone or in-store ordering, delivered or carried out, with some formats offering limited dine-in seating.
- CEO
- R.J. Phillips, Jr.
- Headquarters
- TX
- Founded
- 1969
- States available
- 1
Can you afford it, and what does the money buy?
Entry cost runs 58% below the typical full-service restaurants franchise.
Source: FDD · Items 5–7
FDD Item 7
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $25K | $25K |
| Working capital (3–6 mo) | $10K | $20K |
| Equipment, build-out, other | $160K | $559K |
| Total initial investment | $195K | $604K |
Source: Mr. Gatti's 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
- $195K – $604K
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $20K
- Top 40% of category vs category
- Franchise fee
- $25K
- Top 40% of category vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $25 |
| Inventory (initial) | $14K – $15K |
What do units actually make?
Average unit sales run 53% below the full-service restaurants norm.
Source: FDD · Item 19
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
$79K
11.0% margin
Unlevered ROIC
19%
EBITDA / total invested capital
Payback
5.3 yrs
cash-on-cash, unlevered
Financial Performance
- Avg gross sales
- $716K
- Per unit, per year
- Median gross sales
- $739K
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_sales_only
- Sample size
- 18 units
- vs category median 16
- Range (low → high)
- $173K→$1.3M
- Cohort dispersion (min → max)
- Quartile band
- $297K→$1.1M
- Bottom 25% → top 25%
Compared against 1273 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 $716K/year in gross sales. Revenue-to-investment ratio: 1.8x.
Fee burden
5.0% royalty + 2.0% ad fund.
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 averages
How Mr. Gatti's Compares
Is the system healthy?
Source: FDD · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 98
- 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
- 1
- Corporate units in the system
- % franchised
- 96%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 6
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 4
- Reacquired (3yr)
- 0
- Franchisor bought back
No multi-year history disclosed and no opening/closing activity in the last reporting year.
Item 12 · 1 state 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.
1
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.
- Total loans
- 23
- Loan volume
- $8.0M
- Median loan
- $270K
- 50th percentile
- Charge-off rate
- 34.8%
- 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)
- 65.2%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 16
- Defaults
- 8
- Typical loan rate
- 6.0%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7222
- Jobs supported
- 179
- 2.3 per loan
- Lender concentration
- 22%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Vintage analysis
Mr. Gatti's charge-off rate by loan vintage
Top lenders financing Mr. Gatti's franchisees
Showing 3 of 16 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.
A 34.8% charge-off rate means roughly 1 in 3 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 34.8% — 117% 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)
One settled action (2019) by a franchisee against predecessor Gatti's Great Pizza, Inc. and its owners (Phillips, Mann) alleging breach of contract related to purchase of 13 former company-affiliated facilities; settled for $200,000 in rent subsidies without admission of liability. No pending or concluded matters against the franchisor directly, and no litigation against franchisees in the last fiscal year.
Largest disclosed settlement: $200,000
Bankruptcy (Item 4)
Disclosed in last 7 years
Predecessor MGLP and affiliates (Sovrano LLC, Gatti's Great Pizza, Inc., Gigi's Cupcakes entities, KeyCorp LLC) filed Chapter 11 on January 4, 2019 in N.D. Texas; plan confirmed October 17, 2019, effective November 19, 2019; individual cases closed September 30, 2021. Two related affiliates (Allorco LLC, GGP Mississippi LLC) filed Chapter 7 in 2019, both discharged same year. Current managers Phillips and Mann were officers/managers of the debtor entities.
Audited financials (Item 21)
Yes
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Restricted to system-approved products: Yes
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Curable defaultsℹ | 6 |
| Mandatory arbitration | No |
| Arbitration location | Tarrant County, Texas (non-binding mediation before litigation) |
| Governing law | Texas |
| Litigation count | 1 |
View Item 3 litigation summary
One settled action (2019) by a franchisee against predecessor Gatti's Great Pizza, Inc. and its owners (Phillips, Mann) alleging breach of contract related to purchase of 13 former company-affiliated facilities; settled for $200,000 in rent subsidies without admission of liability. No pending or concluded matters against the franchisor directly, and no litigation against franchisees in the last fiscal year.
Items 10, 11
Training & Operations
- Classroom training
- 14 hrs
- On-the-job training
- 186 hrs
- Training location
- Mr. Gatti's support center in Fort Worth, Texas or other designated facility
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- Franchisor reviews proposed sites; provides site selection guidelines
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Mr. Gatti's franchise?
The total investment to open a Mr. Gatti's franchise ranges from $195K – $604K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Mr. Gatti's franchise owners earn?
According to Item 19 of the Mr. Gatti's FDD, the average gross sales per unit is $716K. The median is $739K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Mr. Gatti's's franchise failure rate?
Based on SBA 7(a) loan data, Mr. Gatti's has a charge-off rate of 34.8% across 23 loans, meaning 34.8% 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 Mr. Gatti's franchise locations are there?
As of their most recent FDD filing, Mr. Gatti's has 98 total units in the United States, including 97 franchised units and 1 company-owned units.
Is Mr. Gatti's a good franchise to buy?
FranchiseVerdict rates Mr. Gatti's as a C-grade franchise with a verdict score of 40 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?
If you represent Mr. Gatti's, you can request corrections or provide updated information.
Other Full-Service Restaurants franchises
Compare similar franchise opportunities in the Full-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.