Nathan's Famous Franchise Cost, Revenue & Review 2026
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]. 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]. FranchiseVerdict grade: D (Below average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $554K – $2.0M
- 25th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 5.5%
- 22nd pct Service Resta…
- Units
- 75
- 29th pct Service Resta…
- SBA charge-off
- 30.0%
- % 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 avg · 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.
- RETURNSTotal 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.
- RISKVerdict D (Below average), verdict score 36/100 (higher is better). 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, 2010–2025).
- FLAG11 units terminated last reporting year (14.7% of the system). Ask existing franchisees why.
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)
- Ultimate parent
- Nathan's Famous, Inc. (NFI, NASDAQ: NATH)
- 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 11% above the typical full-service restaurants franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown19 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
- $554K – $2.0M
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $20K
- Top 40% of category vs category
- Franchise fee
- $15K – $30K
- Top 40% of category vs category
- Royalty
- 5.5%
- Percentage of 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 |
| 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 did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one Nathan's Famous unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
6%
Below the 30–60% attractive-franchise band
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
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.
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 average).
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
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 averages
How Nathan's Famous Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 75
- Opened
- 5
- Last reporting year
- Closed
- 0
- Terminated
- 11
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 5.3%
- Company-owned
- 0
- 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
3-year detail · Item 20
- Opened (3yr)
- 3
- Closed (3yr)
- 0
- Terminated (3yr)
- 4
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 1
- Reacquired (3yr)
- 0
- Franchisor bought back
- 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
- 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)
- 70.0%
- 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.
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.
What could kill this investment?
SBA loans charge off at 30.0% — 87% 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)
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.
Largest disclosed settlement: $1,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · CBIZ CPAs P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
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 36 / 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 | none |
| 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
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 $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 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 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 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 75 franchised units and 0 company-owned units. 5 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 36 out of 100 (higher is better), 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.
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.