Nathan's FamousFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Nathan's Famous franchise requires a total initial investment of $82K – $2.1M, including a $30K franchise fee and an ongoing 5.5% royalty[2]. The 2024 FDD does not disclose unit-level revenue (no Item 19). SBA 7(a) loans show a 30.0% charge-off rate across 20 loans[1]. Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $82K – $2.1M
- 2nd pct Service Resta…
- Avg gross sales
- N/A
- 28th pct Service Resta…
- Royalty
- 5.5%
- 24th pct Service Resta…
- Units
- 75
- 39th pct Service Resta…
- SBA default
- 30.0%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-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
30.0% of SBA loans charged off across 20 loans, above the 16% franchise average.
Franchising since 1993. Systems this mature have refined operations and brand recognition.
Bottom line
- Total investment $82K – $2.1M including a $30K franchise fee, 5.5% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict F (Bottom Quintile) with a risk score of 88/100. SBA loan charge-off rate of 30.0% across 20 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 5 units terminated last reporting year (6.7% of the system). Ask existing franchisees why.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Nathan's Famous Systems, Inc.
- Parent company
- Nathan's Famous Operating Corp.
- Ultimate parent
- Nathan's Famous, Inc.
- CEO title
- Chief Executive Officer
- Eric Gatoff
- Incorporated in
- DE
- HQ
- One Jericho Plaza - Wing A, 2nd Floor, Jericho, New York 11753
- Auditor
- Marcum LLP
- Audited financials
- Franchisor revenue
- $104.4M
- vs $119.1M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
Nathan's Famous franchisees operate quick-service restaurants and kiosks specializing in hot dogs, chicken, and classic American fast-food items. Daily operations include food preparation, customer service, inventory management, and point-of-sale transactions, typically in high-traffic locations such as malls, amusement parks, or street-front venues. Franchisees must maintain brand standards, comply with the 5.5% royalty requirement, and manage staffing and local marketing within their unprotected territory.
- CEO
- Eric Gatoff
- Headquarters
- NY
- Founded
- 1916
- FDD year
- 2024
- States available
- 15
FDD Item 7 · 2024 filing · 19 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Restaurant Construction | $250K | $1.3M | |
| Site Preparation | $25K | $170K | |
| Arthur Treacher's Initial Inventory and Supplies | $3K | $5K | |
| Additional Signage for Arthur Treacher's | $3K | $8K | |
| Arthur Treacher's Initial Fee | $5K | $8K | |
| Initial Franchise Fee | $30K | $30K | |
| Real Estate Rent | $45K | $225K | |
| Leasehold Improvements | $155K | $613K | |
| Furniture, Fixtures, and Equipment | $90K | $205K | |
| Pre-Opening and Inventory Expenses | $10K | $15K | |
| Training Expenses | $2K | $10K | |
| Insurance | $3K | $4K | |
| Security Deposits | — | — | |
| Utility Deposits | $2K | $4K | |
| Professional Fees | $12K | $20K | |
| Business Licenses | $100 | $750 | |
| Additional Funds (first three months) | $8K | $18K | |
| Grand Opening Advertising | $3K | $3K | |
| Additional Furnishings, Fixtures and Equipment for Arthur Treacher's | $9K | $18K | |
| Total initial investment | $654K | $2.7M |
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
- $82K – $2.1M
- Better than avg vs category
- Liquid capital req'd
- $10K – $25K
- Better than avg vs category
- Franchise fee
- $15K – $30K
- Better than avg vs category
- Royalty
- 5.5%
- Gross Sales · 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 |
| Transfer fee | $5K |
| Renewal fee | $15K |
| Inventory (initial) | $10K – $15K |
| Total fee load | 8.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Full-Service Restaurants averages
How Nathan's Famous Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 75
- Opened
- 3
- Last reporting year
- Closed
- 5
- Terminated
- 5
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 6.7%
- Company-owned
- 4
- Corporate units in the system
- % franchised
- 95%
- vs corporate-owned
- Net growth (yr3)
- -1.4%
- Net unit change last year
- 3-yr CAGR
- -10.1%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 0
- 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 20 · 15 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
- 20
- Loan volume
- $5.4M
- Median loan
- $200K
- 50th percentile
- Charge-off rate
- 30.0%
- 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
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Nathan's Famous'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 8 states
- Startup risk premium and job creation velocity
- 14-year lending trend
Instant access. No subscription.
A 30.0% charge-off rate means roughly 1 in 3 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
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)
October 2006 Consent Order with Minnesota Department of Commerce. Franchisor inadvertently entered into a franchise agreement in Minnesota while not registered with the state. Settlement: $1,000 civil penalty and agreement to comply with Minnesota Franchises Law.
Largest disclosed settlement: $1,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Marcum LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- 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 88 / 100 rating
- 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
- 04MINORWide investment range ($82K–$2M+) suggests inconsistent franchise models or hidden costs not clearly delineated
- 05MINOR2006 Minnesota regulatory violation shows compliance lapses, though civil penalty was minor
- 06MEDHigh 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Protected territory | No |
| Exclusive territoryℹ | No |
| 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 | 3 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | New York |
| Litigation count | 1 |
View Item 3 litigation summary
October 2006 Consent Order with Minnesota Department of Commerce. Franchisor inadvertently entered into a franchise agreement in Minnesota while not registered with the state. Settlement: $1,000 civil penalty and agreement to comply with Minnesota Franchises Law.
Items 10, 11
Training & Operations
- Classroom training
- 10 hrs
- On-the-job training
- 39 hrs
- Training location
- On-site
- Ongoing training
- Required
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
80 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Nathan's Famous · FDD (2024) PDF
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 $82K – $2.1M, 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 does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
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 30.0% across 20 loans, meaning 30.0% 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 F-grade franchise with a risk score of 88 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.