Music Go RoundFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Music Go Round franchise requires a total initial investment of $335K – $444K, including a $25K franchise fee and an ongoing 4.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.6M[2]. SBA 7(a) loans show a 23.3% charge-off rate across 49 loans[1]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $335K – $444K
- 33rd pct Retail
- Avg gross sales
- $1.6M
- 17th pct Retail
- Royalty
- 4.0%
- 3rd pct Retail
- Units
- 35
- 15th pct Retail
- SBA default
- 23.3%
- system-wide median varies by category
Quick verdict · Retail · color = vs category peers
Green = >15% above Retail 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
Each dollar invested generates 4.1x in gross revenue, well above the typical 1.5-2.5x range.
23.3% of SBA loans charged off across 49 loans, above the 16% franchise average.
Franchising since 1994. Systems this mature have refined operations and brand recognition.
Franchised units fell from 37 to 35 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $335K – $444K including a $25K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.6M/year (median $1.4M), with an estimated 38% cash-on-cash return (based on Gross Margin). Note: this is gross profit, not take-home income.
- Verdict B (Above Average) with a risk score of 55/100. SBA loan charge-off rate of 23.3% across 49 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System contracting at -5.4% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Winmark Corporation
- Incorporated in
- MN
- HQ
- 605 Highway 169 N, Suite 400, Minneapolis, Minnesota 55441
- Auditor
- Grant Thornton LLP
- Audited financials
- Franchisor revenue
- $81.3M
- vs $86.1M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
Franchisees operate retail locations specializing in buying, selling, and trading new and used musical instruments and equipment. Day-to-day operations include inventory management, customer service, instrument appraisal and repair coordination, and leveraging the brand's online presence to reach both local and remote customers.
- CEO
- Brett D. Heffes
- Headquarters
- MN
- Founded
- 1988
- FDD year
- 2026
- States available
- 19
FDD Item 7 · 2026 filing · 12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $25K | $25K | |
| Fixtures and Supplies | $25K | $35K | |
| Signs | $11K | $16K | |
| Security System and/or Cameras | $2K | $4K | |
| Point-of-Sale (POS) Systemnot refundable | $19K | $23K | |
| Leasehold Improvements | $9K | $11K | |
| Build-Out | $35K | $55K | |
| Deposits and Business Licenses | $5K | $15K | |
| Opening Inventory | $110K | $130K | |
| Miscellaneous Pre-Opening Expenses | $35K | $50K | |
| Rent - First 3 Months | $20K | $30K | |
| Additional Funds - 3 Months | $40K | $50K | |
| Total initial investment | $335K | $444K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
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
$126K
8.0% margin
Unlevered ROIC
29%
EBITDA / total invested capital
Payback
3.4 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $335K – $444K
- Better than avg vs category
- Liquid capital req'd
- $40K – $50K
- Better than avg vs category
- Franchise fee
- $15K – $25K
- Better than avg vs category
- Royalty
- 4.0%
- Gross Sales · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
- Payback period
- 2.7 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $3K |
| Transfer fee | $10K |
| Renewal fee | $10K |
| Inventory (initial) | $110K – $130K |
| Total fee load | 7.0% of rev |
Financial Performance
- Avg gross sales
- $1.6M
- Per unit, per year
- Median gross sales
- $1.4M
- Avg gross margin
- $147K
- Reported as Gross Margin in FDD Item 19
- Cash-on-cash
- 37.7%
- Based on Gross Margin / investment midpoint
- Item 19 type
- Actual
- Sample size
- 31 units
- vs category median 49
- Range (low → high)
- $260K→$3.7M
- Cohort dispersion (min → max)
- Quartile band
- $645K→$2.9M
- Bottom 25% → top 25%
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Reporting year
- 2025
- Fiscal year the figures cover
- Transparency
- 10 / 5
- vs category median 2 / 5 · above
Compared against 304 Retail brands
Revenue is 4.1x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
vs Retail averages
How Music Go Round Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 35
- Opened
- 3
- Last reporting year
- Closed
- 2
- Turnover rate
- 5.7%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- +2.9%
- Net unit change last year
- 3-yr CAGR
- -5.4%
- 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 · 20 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.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 49
- Loan volume
- $10.7M
- Median loan
- $140K
- 50th percentile
- Charge-off rate
- 23.3%
- 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)
- 76.7%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 32
- Defaults
- 10
Vintage analysis
Music Go Round 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 Music Go Round'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
- 16-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
A 23.3% charge-off rate means roughly 1 in 4 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Music Go Round presents caution-level risk due to minimal system growth, undisclosed Item 19 financials, thin profit margins, and no going concern issues but questionable franchisee ROI clarity.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Grant Thornton 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 55 / 100 rating
- 01MINORStagnant unit growth of only 2.9% YoY with only 35 locations suggests mature/declining system
- 02MINORNo Item 19 financial performance disclosure despite $1.58M average revenue — opacity around actual franchisee profitability
- 03MINORNet income margin of only 9.3% ($146,957 on $1.58M sales) is thin and leaves little room for error or unexpected costs
- 04MINORHigh initial investment ($335K-$443K) combined with slow growth indicates recovering or struggling system
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 |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Minnesota |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 20 hrs
- Training location
- On-site and off-site
- Franchisor financing
- Offered
- Item 10
- POS system
- Winmark Proprietary Software
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Winmark Proprietary Software
Item 20 · call current owners
Franchisee Contacts
43 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Music Go Round · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Music Go Round franchise?
The total investment to open a Music Go Round franchise ranges from $335K – $444K, 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 Music Go Round franchise owners earn?
According to Item 19 of the Music Go Round FDD, the average gross sales per unit is $1.6M. The median is $1.4M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Music Go Round's franchise failure rate?
Based on SBA 7(a) loan data, Music Go Round has a charge-off rate of 23.3% across 49 loans, meaning 23.3% 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 Music Go Round franchise locations are there?
As of their most recent FDD filing, Music Go Round has 35 total units in the United States, including 37 franchised units and 0 company-owned units. 3 new units were opened in the latest reporting year.
Is Music Go Round a good franchise to buy?
FranchiseVerdict rates Music Go Round as a B-grade franchise with a risk score of 55 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.