Nathan's Famous
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.
- Rated STRONG with a risk score of 53/100. SBA loan default rate of 0.0% across 26 loans (below the industry average).
- System contracting at -10.1% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Nathan's Famous unit return on the cash you put in?
Unlevered ROIC · per unit
10%
Below typical band (30–60%)
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.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
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.
Score breakdown · what drove the 53 / 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
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
80 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Nathan's Famous · FDD (2024) PDF