Mr. Gatti’s FECFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Mr. Gatti’s FEC franchise requires a total initial investment of $2.1M – $3.8M, including a $50K franchise fee and an ongoing 5.0% royalty[2]. Per the 2025 FDD, average unit revenue was $2.6M[2]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $2.1M – $3.8M
- 100th pct Service Resta…
- Avg gross sales
- $2.6M
- 56th pct Service Resta…
- Royalty
- 5.0%
- 13th pct Service Resta…
- Units
- 89
- 73rd pct Service Resta…
- SBA default
- N/A
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
Bottom line
- Total investment $2.1M – $3.8M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.6M/year (median $2.6M).
- Verdict A (Top Quintile) with a risk score of 5/100.
- System growing at 29.9% CAGR over 3 years with 89 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- MR. GATTI’S OPERATING, LLC
- Parent company
- Mr. Gatti’s Pizza, LLC
- Incorporated in
- DE
- HQ
- 550 Bailey Ave., Suite 650, Fort Worth, Texas 76107
- Auditor
- whitleypenn
- Audited financials
- Franchisor revenue
- $9.7M
- vs $11.0M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
Mr. Gatti's FEC (Family Entertainment Center) franchisees operate pizza restaurants combined with arcade games, redemption games, and entertainment activities. Day-to-day operations include food preparation and service, customer management across dining and gaming areas, maintenance of entertainment equipment, and supervision of staff across both revenue streams.
- CEO
- R.J. Phillips, Jr.
- Headquarters
- TX
- Founded
- 1969
- FDD year
- 2025
- States available
- 8
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $50K | $390K |
| Equipment, build-out, other | $2.0M | $3.4M |
| Total initial investment | $2.1M | $3.8M |
Source: Mr. Gatti’s FEC 2025 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
$385K
15.0% margin
Unlevered ROIC
12%
EBITDA / total invested capital
Payback
8.3 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $2.1M – $3.8M
- Below avg, review vs category
- Liquid capital req'd
- $50K – $390K
- Below avg, review vs category
- Franchise fee
- $50K – $50K
- Below avg, review vs category
- Royalty
- 5.0%
- Gross Sales · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 32.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $25 |
| Transfer fee | $13K |
| Renewal fee | $13K |
| Total fee load | 32.0% of rev |
At 32.0% total fee load, roughly $822K per year goes to the franchisor before you pay a single operating expense.
Financial Performance
- Avg gross sales
- $2.6M
- Per unit, per year
- Median gross sales
- $2.6M
- Item 19 type
- gross_sales
- Sample size
- 48 units
- vs category median 28
- Range (low → high)
- $794K→$5.5M
- Cohort dispersion (min → max)
- Transparency
- 7 / 5
- vs category median 4 / 5 · above
Compared against 453 Quick-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 Quick-Service Restaurants averages
How Mr. Gatti’s FEC Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 89
- Opened
- 14
- Last reporting year
- Closed
- 3
- Turnover rate
- 3.4%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 98%
- vs corporate-owned
- Net growth (yr3)
- +14.5%
- Net unit change last year
- 3-yr CAGR
- +29.9%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 1
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 8 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
- Minnesota
- Rhode Island
- South Dakota
- Virginia
- 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
- 24
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Moderate-to-caution risk: substantial capital requirement and litigation history offset by reasonable growth and protected territory, but lack of profitability disclosure and settlement context warrant deep due diligence.
Litigation (Item 3)
Item 3 (Litigation) section is empty - no litigation information provided
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · whitleypenn
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 5 / 100 rating
- 01MEDNet income not disclosed in Item 19 — unable to verify profitability claims against $2.57M average revenue
- 02HIGH2019 litigation with $200k settlement suggests contract/operational disputes; lack of admission complicates future risk assessment
- 03MEDHigh initial investment ($2.14M–$3.84M) combined with undisclosed net income creates difficulty calculating ROI and payback period
- 04HIGHGoing Concern status = False is ambiguous; clarify whether this applies to franchisor or means non-disclosure of going concern issues
- 05MEDModest growth rate of 14.5% YoY with only 89 units suggests limited system maturation and economies of scale
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 | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rights | 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 | 10 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Texas |
| Litigation count | 1 |
View Item 3 litigation summary
Item 3 (Litigation) section is empty - no litigation information provided
Items 10, 11
Training & Operations
- Classroom training
- 68 hrs
- On-the-job training
- 276 hrs
- Training location
- On-site and corporate
- POS system
- Revention, HungerRush, Embed, Amusement Connect, Partywirks and QSR Online
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Revention, HungerRush, Embed, Amusement Connect, Partywirks and QSR Online
Item 20 · call current owners
Franchisee Contacts
80 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Mr. Gatti’s FEC · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Mr. Gatti’s FEC franchise?
The total investment to open a Mr. Gatti’s FEC franchise ranges from $2.1M – $3.8M, 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 Mr. Gatti’s FEC franchise owners earn?
According to Item 19 of the Mr. Gatti’s FEC FDD, the average gross sales per unit is $2.6M. 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 Mr. Gatti’s FEC's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Mr. Gatti’s FEC (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 Mr. Gatti’s FEC franchise locations are there?
As of their most recent FDD filing, Mr. Gatti’s FEC has 89 total units in the United States, including 67 franchised units and 2 company-owned units. 14 new units were opened in the latest reporting year.
Is Mr. Gatti’s FEC a good franchise to buy?
FranchiseVerdict rates Mr. Gatti’s FEC as a A-grade franchise with a risk score of 5 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.