Nathan's Famous Franchise Cost, Revenue & Review 2026
- Investment
- $554K – $2.0M
- Disclosed sales
- not disclosed
- SBA charge-off
- 35.3%
- on 20 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Nathan's Famous is a franchise that licenses its iconic hot dogs, crinkle-cut fries, and menu as a branded program added to existing foodservice locations, rather than standalone restaurants. Operators add the Nathan's menu to their venue, managing prep and service.
FranchiseVerdict summary · 2026
A Nathan's Famous franchise requires a total initial investment of $554K – $2.0M, including a $15K – $30K franchise fee and an ongoing 5.5% royalty[2]. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. SBA 7(a) loans show a 35.3% charge-off rate across 20 loans[1]. FranchiseVerdict grade: D (Below average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2024 filing · Data extracted: · Last cited check: · Staleness risk: high - figures are from a filing two or more years old
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 scored5 of 5 headline figures on this page cite a page of the filing.
Overview
- Investment
- $554K – $2.0M
- 25th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 5.5%
- 23rd pct Service Resta…
- Units
- 75
- 29th pct Service Resta…
- SBA charge-off
- 35.3%
- % 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 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 $554K – $2.0M including a $30K franchise fee, 5.5% ongoing royalty.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict D (Below average), verdict score 35/100 (higher is better). SBA loan charge-off rate of 35.3% across 20 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHFlat: no net change in franchised outlets in the latest year (3 opened, 3 closed); 1 signed but not yet open (Item 20).
- DECLINESystem contracting at -13.8% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Nathan's Famous Systems, Inc.
- Parent company
- Nathan's Famous Operating Corp. (NFOC)
- FDD Item 1, page 6 of the 2024 FDD
- Ultimate parent
- Nathan's Famous, Inc. (NFI, NASDAQ: NATH)
- FDD Item 1, page 6 of the 2024 FDD
- Predecessor
- Nathan's Famous Operating Corp. (NFOC)
- Prior franchisor entity
- CEO title
- Director, Chief Executive Officer
- Eric Gatoff
- Incorporated in
- Delaware
- HQ
- One Jericho Plaza - Wing A, 2nd Floor, Jericho, New York 11753
- Auditor
- CBIZ CPAs P.C.
- Audited financials
- Franchisor revenue
- $126.9M
- vs $136.0M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Eric Gatoff
- Headquarters
- New York
- Founded
- 1993
- FDD year
- 2024
- States available
- 15
Can you afford it, and what does the money buy?
Entry cost runs 91% above the typical full-service restaurants franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $30K | $30K | |
| Real Estate Rent | $60K | $195K | |
| Restaurant Construction | $250K | $1.3M | |
| Site Preparation | $25K | $170K | |
| Furniture, Fixtures, and Equipment | $145K | $245K | |
| Pre-Opening and Inventory Expenses | $10K | $15K | |
| Training Expenses | $2K | $10K | |
| Insurance | $5K | $8K | |
| Security Deposits | — | — | |
| Utility Deposits | $3K | $7K | |
| Professional Fees | $12K | $25K | |
| Business Licenses | $100 | $750 | |
| Additional Funds (for first three months) | $10K | $25K | |
| Grand Opening Advertising | $3K | $3K | |
| Additional Furnishings, Fixtures and Equipment for Arthur Treacher's | — | — | |
| Arthur Treacher's Initial Inventory and Supplies | — | — | |
| Additional Signage for Arthur Treacher's | — | — | |
| Arthur Treacher's Initial Fee | — | — | |
| Total initial investment | $554K | $2.0M |
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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $554K – $2.0M
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $25K
- Top 40% of category vs category
- Franchise fee
- $15K – $30K
- Top 40% of category vs category
- Royalty
- 5.5%
- typical 6–8%
- Ad fund
- 2.5%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.5% of gross sales |
| Marketing / ad fund | 2.5% of gross sales |
| Technology fee | $7K |
| Training fee | $2K |
| Transfer fee | $1K |
| Renewal fee | $4K |
| Inventory (initial) | $2K – $5K |
| Total fee load | 8.0% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Nathan's Famous makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Nathan's Famous 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 annual revenue, 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.
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: 2024 FDD
Financial Performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 8.0% (near the Full-Service Restaurants median).
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System contracting at -13.8% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
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 medians
How Nathan's Famous Compares
Category median of published Full-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 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 75
- Opened
- 3
- Last reporting year
- Closed
- 3
- Terminated
- 3
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.0%
- Company-owned
- 4
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -13.8%
- Net unit change over 3 years
- 3-yr CAGR
- -13.8%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 3
- Not renewed
- 0
- Transferred
- 0
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 1
- 0.01 per open outlet · Item 20 Table 5
- Projected new
- 4
- Franchisor's next-year forecast
- Termination rate
- 6.7%
- Franchisor-initiated terminations
- Ceased ops
- 6.7%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 15 states 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.
15
states with franchisees (per FDD Item 12)
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 20
- Loan volume
- $5.4M
- Median loan
- $200K
- 50th percentile
- Charge-off rate
- 35.3%
- on 20 loans · 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)
- 64.7%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 15
- Defaults
- 6
- Typical loan rate
- 6.6%
- avg rate to borrowers
- Franchised industry avg
- 21.5%
- brand above franchise avg ↑
- Jobs supported
- 188
- 3.5 per loan
- Lender concentration
- 20%
- top lender's share
Borrower mix: 100% went to startups / new businesses, 0% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 21.5% vs 25.0% for independents — franchising is associated with 14% lower SBA default risk in this category.
Top lenders financing Nathan's Famous franchisees
Showing 3 of 15 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.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Nathan's Famous from SBA 7(a) FOIA data.
- Principal loss rate
- 20.7%
- Avg SBA guarantee
- 68%
- Avg interest rate
- 6.58%
- Avg chargeoff amount
- $188K
- Lender concentration
- 20.0%
- Job velocity
- 3.5 per $100K
- NAICS benchmark
- 15.7%
- NAICS 722211
- Jobs supported
- 188
Top SBA lendersTop lender holds 20% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 4 | $274K | 33.3% |
| 2 | Bank of Hope | 2 | $220K | 0.0% |
| 3 | Popular Bank | 2 | $512K | 100.0% |
| 4 | Readycap Lending, LLC | 1 | $418K | 0.0% |
| 5 | FirstBank Puerto Rico | 1 | $200K | 0.0% |
| 6 | Wells Fargo Bank National Association | 1 | $397K | 0.0% |
| 7 | Hana Bank USA National Association | 1 | $200K | 0.0% |
| 8 | Bank of America, National Association | 1 | $50K | 100.0% |
| 9 | Regions Bank | 1 | $150K | 0.0% |
| 10 | PNC Bank, National Association | 1 | $629K | 100.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| NYNew York | 8 | 4 | 50.0% |
| OHOhio | 4 | 1 | 33.3% |
| CACalifornia | 2 | 0 | 0.0% |
| NJNew Jersey | 2 | 1 | 50.0% |
| AZArizona | 1 | 0 | -- |
| FLFlorida | 1 | 0 | 0.0% |
| NVNevada | 1 | 0 | 0.0% |
| PRPuerto Rico | 1 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
A 35.3% 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 35.3% — 120% 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
Nathan's Famous presents moderate-to-cautious risk with a contracting system, absent financial transparency, unprotected territories, and regulatory history that limit franchisee upside potential.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
In October 2006, the franchisor entered into a Consent Order with the Minnesota Department of Commerce after inadvertently entering into a franchise agreement in Minnesota while not registered there; paid a $1,000 civil penalty and agreed not to violate the Minnesota Franchises Law in the future. No other litigation required to be disclosed.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · CBIZ CPAs P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Total revenues of Nathan's Famous Systems, Inc. for the 53 weeks ended March 31, 2024 (audited, Marcum LLP). Comprises Branded Products sales $86,489,134, license royalties $33,580,751, franchise fees and royalties $4,208,269, royalties from affiliate $484,105, and advertising fund revenue $2,141,680.
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 35 / 100 verdict
- 01MINORDeclining unit count (-1.4% YoY) indicates shrinking franchise system with potential saturation or franchisee exits
- 02MINORNo average revenue or net income disclosure (Item 19) prevents realistic ROI modeling and obscures financial performance
- 03MINORUnprotected territory creates direct competition risk from other Nathan's franchisees and company-owned locations
- 04MINOR2006 Minnesota regulatory violation shows compliance lapses, though civil penalty was minor
- 05MEDHigh royalty rate (5.5%) combined with no disclosed profitability metrics raises sustainability concerns for marginal operators
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 3 mi |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Arbitration location | New York |
| Jury trial waiver | Yes |
| Governing law | NY |
| Litigation count | 1 |
View Item 3 litigation summary
In October 2006, the franchisor entered into a Consent Order with the Minnesota Department of Commerce after inadvertently entering into a franchise agreement in Minnesota while not registered there; paid a $1,000 civil penalty and agreed not to violate the Minnesota Franchises Law in the future. No other litigation required to be disclosed.
Items 10, 11
Training & Operations
- Classroom training
- 10 hrs
- On-the-job training
- 39 hrs
- Training location
- One of NFOC's company-owned Restaurants in the New York metropolitan area, or corporate headquarters in Jericho, NY
- Ongoing training
- Optional
- Time to open
- 2 mo
- From signing to launch
- Site selection
- franchisor must approve
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
127 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 Nathan's Famous franchise?
The total investment to open a Nathan's Famous franchise ranges from $554K – $2.0M, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Nathan's Famous franchise owners earn?
Nathan's Famous makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Nathan's Famous?
Nathan's Famous is franchised by Nathan's Famous Systems, Inc.. Its parent company is Nathan's Famous Operating Corp. (NFOC). The ultimate parent named in the FDD is Nathan's Famous, Inc. (NFI, NASDAQ: NATH). Source: FDD Item 1, 2024 filing.
What is Item 19 in the Nathan's Famous 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 Nathan's Famous FDD and qualifies whose outlets they describe.
What is Nathan's Famous's franchise failure rate?
Based on SBA 7(a) loan data, Nathan's Famous has a charge-off rate of 35.3% across 20 loans, meaning 35.3% 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 Nathan's Famous franchise locations are there?
As of their most recent FDD filing, Nathan's Famous has 75 total units in the United States, including 71 franchised units and 4 company-owned units. 3 new units were opened in the latest reporting year.
Is Nathan's Famous a good franchise to buy?
FranchiseVerdict rates Nathan's Famous as a D-grade franchise with a verdict score of 35 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
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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.