Mr. Gatti’s FEC Franchise Cost, Revenue & Review 2026
- Investment
- $2.1M – $3.8M
- Disclosed sales
- $2.6M
- gross sales, not profit
- SBA charge-off
- Not SBA-matched
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Mr. Gatti's Family Entertainment Center is a franchise pairing pizza and a buffet with arcade games, rides, and attractions. Franchisees run a combined restaurant-and-entertainment venue managing food, games, and staff.
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]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
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 8 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $2.1M – $3.8M
- 99th pct Service Resta…
- Avg gross sales
- $2.6M
- Incl. company outlets35th pct Service Resta…
- Royalty
- 5.0%
- 12th pct Service Resta…
- Units
- 53
- 66th 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 $2.1M – $3.8M including a $50K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $2.6M/year (median $2.6M) (includes company-owned outlets).
- RISKVerdict B (Above average), verdict score 64/100 (higher is better).
- GROWTHNegative: net -1 franchised outlets in the latest year (2 opened, 1 closed); 6 signed but not yet open (Item 20).
- FLAGItem 4 discloses a bankruptcy of an officer or of a company an officer ran, not of the franchisor. Review Item 4 for details.
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
- FDD Item 1, page 6 of the 2025 FDD
- Predecessor
- Mr. Gatti's, LP (MGLP); Mr. Gatti's Pizza, LLC (MGPLLC)
- Prior franchisor entity
- CEO title
- Manager / Chief Officer (kc.mann listed as contact)
- Kyle C. Mann
- Incorporated in
- Delaware
- HQ
- 550 Bailey Ave., Suite 650, Fort Worth, Texas 76107
- Auditor
- Whitley Penn LLP
- Audited financials
- Franchisor revenue
- $12.0M
- vs $11.0M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Same owner · FDD Item 1, page 6
1 other brand on this site name Mr. Gatti's Pizza, LLC as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Kyle C. Mann
- Headquarters
- TX
- Founded
- 1969
- FDD year
- 2025
- States available
- 8
Can you afford it, and what does the money buy?
Entry cost runs 516% 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 | $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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $2.1M – $3.8M
- Bottom third — review vs category
- Liquid capital req'd
- $50K – $390K
- Bottom third — review vs category
- Franchise fee
- $50K – $50K
- Bottom third — review vs category
- Royalty
- 5.0%
- 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 | $1K |
| Transfer fee | $13K |
| Renewal fee | $13K |
| Inventory (initial) | $50K – $60K |
| 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.
What do units actually make?
Average unit sales run 164% above the quick-service restaurants norm.
Includes company-owned outlets
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 Mr. Gatti’s FEC 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
$3.2M
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 Mr. Gatti’s FEC 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
Includes company-owned outlets
- Avg gross sales
- $2.6M
- Per unit, per year
- Median gross sales
- $2.6M
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 by size segment and quartile
- Sample size
- 25 outlets
- vs category median 19
- Range (low → high)
- $794K→$5.5MCited, not corroborated — printed on page 58 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
- 7 / 10
- vs category median 4 / 10 · above
Compared against 781 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.
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 $2.6M/year in gross sales. Revenue-to-investment ratio: 0.9x. Includes company-owned outlets.
Fee burden
Total ongoing fee load of 32.0% — above the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (+4.1% 3-year CAGR) with 53 units.
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 Mr. Gatti’s FEC 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
- 53
- Opened
- 2
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 3.9%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 96%
- vs corporate-owned
- Net growth (3-yr)
- +4.1%
- Net unit change over 3 years
- 3-yr CAGR
- +4.1%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 1
- Transferred
- 1
- Reacquired
- 1
- Franchisor bought back
- Signed, not yet open
- 6
- 0.11 per open outlet · Item 20 Table 5
- Projected new
- 32
- Franchisor's next-year forecast
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).
Where the owners are · Item 20 owner list
80 current owners across 8 states.
- TX 50
- KY 14
- LA 7
- IN 3
- AL 2
- TN 2
- OH 1
- OK 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
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
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)
Subject: the franchisor is a named party (defendant).
One concluded case against predecessor Gatti's Great Pizza and officers (R.J. Phillips, Kyle Mann) filed July 2019 in US Bankruptcy Court for Northern District of Texas. Franchisee alleged breach of contract re: purchase of 13 facilities. Settled Sept 2019 for $200,000 in rent subsidies; no admission of liability. No pending matters against MGOLLC directly.
Bankruptcy (Item 4)
Subject: an officer. An officer’s own bankruptcy or a company an officer ran, not the franchisor’s
Predecessor MGLP and affiliates (Sovrano LLC, Gatti's Great Pizza Inc., Gigi's Cupcakes LLC, others) filed Chapter 11 January 4, 2019. Plan confirmed October 2019, effective November 2019. Bankruptcy closed September 30, 2021. Officers Mann and Phillips were members/officers of Debtors. Two additional Chapter 7 filings: Allorco LLC (closed June 2019) and GGP Mississippi LLC (closed October 2019).
Audited financials (Item 21)
Yes · Whitley Penn LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Consolidated total revenues, net of Mr. Gatti's Operating, LLC and subsidiaries for fiscal year ended December 29, 2024: food and beverage revenue 2,018,839; amusements and other revenue 1,975,427; franchise royalties and fees 8,001,175.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- 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 64 / 100 verdict
- 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
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 32.0% 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 | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 5 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Curable defaultsℹ | 6 |
| Mandatory arbitration | No |
| Arbitration location | Fort Worth, Texas (non-binding mediation required first; litigation venue is Tarrant County, Texas) |
| Jury trial waiver | Yes |
| Governing law | TX |
| Litigation count | 1 |
View Item 3 litigation summary
One concluded case against predecessor Gatti's Great Pizza and officers (R.J. Phillips, Kyle Mann) filed July 2019 in US Bankruptcy Court for Northern District of Texas. Franchisee alleged breach of contract re: purchase of 13 facilities. Settled Sept 2019 for $200,000 in rent subsidies; no admission of liability. No pending matters against MGOLLC directly.
Items 10, 11
Training & Operations
- Classroom training
- 14 hrs
- On-the-job training
- 186 hrs
- Training location
- Fort Worth, Texas (support center) or designated training facility
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Revention, HungerRush, Embed, Amusement Connect, Partywirks, QSR Online (all leased)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Revention, HungerRush, Embed, Amusement Connect, Partywirks, QSR Online (all leased)
Item 20 · call current owners
Franchisee Contacts
80 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 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. Important context: Includes company-owned outlets. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Mr. Gatti’s FEC?
Mr. Gatti’s FEC is franchised by Mr. Gatti's Operating, LLC. Its parent company is Mr. Gatti's Pizza, LLC. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Mr. Gatti’s FEC 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 Mr. Gatti’s FEC FDD and qualifies whose outlets they describe.
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 53 total units in the United States, including 51 franchised units and 2 company-owned units. 2 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 B-grade franchise with a verdict score of 64 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?
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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.