Pepper PalaceFranchise Cost, Revenue & Review 2026
Data from FDD filing
FranchiseVerdict summary · 2026
A Pepper Palace franchise requires a total initial investment of $211K – $288K, including a $50K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $349K[2]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $211K – $288K
- 11th pct Service Resta…
- Avg gross sales
- $349K
- 1st pct Service Resta…
- Royalty
- 6.0%
- 26th pct Service Resta…
- Units
- 81
- 40th pct Service Resta…
- SBA default
- N/A
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
Started franchising in 2025. Newer systems carry more uncertainty but may offer better territories.
Bottom line
- Total investment $211K – $288K including a $50K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $349K/year (median $323K).
- Verdict A (Top Quintile) with a risk score of 32/100.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- PP FRANCHISE LLC
- Incorporated in
- TN
- HQ
- 3275 Newport Hwy Ste 5, Sevierville, TN 37876
- Auditor
- Smith, Buzzi & Associates, LLC
- Audited financials
Overview
About
Franchisees operate small retail specialty stores selling premium spices, seasonings, pepper blends, and related culinary products. Day-to-day operations include customer service, inventory management, point-of-sale transactions, product sampling/demonstrations, and local marketing to drive foot traffic in mall or street-front locations.
- CEO
- Morten Steen-Jorgensen
- Headquarters
- TN
- Founded
- 2025
- FDD year
- 2025
- States available
- 0
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $25K | $35K |
| Equipment, build-out, other | $136K | $203K |
| Total initial investment | $211K | $288K |
Source: Pepper Palace 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
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
$31K
9.0% margin
Unlevered ROIC
11%
EBITDA / total invested capital
Payback
8.9 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $211K – $288K
- Better than avg vs category
- Liquid capital req'd
- $25K – $35K
- Better than avg vs category
- Franchise fee
- $50K – $50K
- Better than avg vs category
- Royalty
- 6.0%
- Gross Revenue · typical 6–8%
- Ad fund
- -n/d
- Total fee load
- 6.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Technology fee | $400 |
| Transfer fee | $10K |
| Renewal fee | $5K |
| Total fee load | 6.0% of rev |
A 6.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
Financial Performance
- Avg gross sales
- $349K
- Per unit, per year
- Median gross sales
- $323K
- Item 19 type
- Affiliate-owned outlets
- Sample size
- 81 units
- vs category median 13 · large
- Range (low → high)
- $157K→$915K
- Cohort dispersion (min → max)
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Pepper Palace Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 81
- Opened
- 0
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 81
- Corporate units in the system
- % franchised
- 0%
- vs corporate-owned
3-year detail · Item 20
- Transfers (3yr)
- 0
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 16 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.
No SBA loan data available for this brand.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Pepper Palace presents elevated risk due to non-disclosure of profitability data, unclear franchisor financial health, small undocumented unit base, and inability to independently verify claimed $349k average revenue.
Audited financials (Item 21)
Yes · Smith, Buzzi & Associates, LLC
Score breakdown · what drove the 32 / 100 rating
- 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot validate $349k avg revenue claim or actual profitability
- 02HIGHGoing Concern = False indicates potential financial instability or uncertain future viability of franchisor
- 03MEDOnly 81 units system-wide suggests limited scale, unproven model, and higher failure risk vs. established chains
- 04MEDNet income not disclosed — franchisees cannot assess true earning potential after 6% royalties + operating costs
- 05MINORUnit growth trajectory unknown — cannot determine if system is expanding, stagnant, or contracting
- 06MEDHigh initial investment ($211k-$288k) relative to small system size and undisclosed profitability
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 | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Tennessee |
| Litigation count | 0 |
Items 10, 11
Training & Operations
- Classroom training
- 7 hrs
- On-the-job training
- 22 hrs
- POS system
- Shopify POS System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Shopify POS System
Item 20 · call current owners
Franchisee Contacts
17 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Pepper Palace · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Pepper Palace franchise?
The total investment to open a Pepper Palace franchise ranges from $211K – $288K, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Pepper Palace franchise owners earn?
According to Item 19 of the Pepper Palace FDD, the average gross sales per unit is $349K. The median is $323K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Pepper Palace's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Pepper Palace (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Pepper Palace franchise locations are there?
As of their most recent FDD filing, Pepper Palace has 81 total units in the United States, including 0 franchised units and 81 company-owned units.
Is Pepper Palace a good franchise to buy?
FranchiseVerdict rates Pepper Palace as a A-grade franchise with a risk score of 32 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.
For franchisors
Are you the franchisor?
If you represent Pepper Palace, you can request corrections or provide updated information.
Claim this brandOther Full-Service Restaurants franchises
Compare similar franchise opportunities in the Full-Service Restaurants category
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.