Philly Pretzel FactoryFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Philly Pretzel Factory franchise requires a total initial investment of $150K – $496K, including a $40K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $612K[2]. SBA 7(a) loans show a 24.5% charge-off rate across 123 loans[1]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $150K – $496K
- 18th pct Service Resta…
- Avg gross sales
- $612K
- 14th pct Service Resta…
- Royalty
- 6.0%
- 44th pct Service Resta…
- Units
- 162
- 79th pct Service Resta…
- SBA default
- 24.5%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-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
24.5% of SBA loans charged off across 123 loans, above the 16% franchise average.
190% cash-on-cash return (based on P&L Bottom Line). Above the 20% threshold most investors target.
Bottom line
- Total investment $150K – $496K including a $40K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $612K/year (median $513K), with an estimated 190% cash-on-cash return (based on P&L Bottom Line).
- Verdict B (Above Average) with a risk score of 62/100. SBA loan charge-off rate of 24.5% across 123 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Soft Pretzel Franchise Systems, Inc.
- CEO title
- Chief Executive Officer
- Daniel Dizio
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- PA
- HQ
- 1525 Ford Road, Bensalem, Pennsylvania 19020
- Auditor
- Herbein + Company Inc.
- Audited financials
- Franchisor revenue
- $7.3M
- vs $7.5M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
Franchisees operate quick-service pretzel shops, typically in high-traffic retail locations (malls, street-front, transit hubs) and kiosks. Daily operations include preparing and baking soft pretzels, managing inventory, staffing, customer service, and managing point-of-sale systems. The model emphasizes impulse-purchase food items with relatively simple preparation, allowing for smaller footprint locations.
- CEO
- Daniel Dizio
- Headquarters
- PA
- Founded
- 2004
- FDD year
- 2025
- States available
- 12
FDD Item 7 · 2025 filing · 18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $40K | $40K | |
| Rentnot refundable | $1K | $8K | |
| Lease Depositnot refundable | $1K | $15K | |
| Architect Feesnot refundable | $5K | $16K | |
| Construction/Leasehold Improvementsnot refundable | $51K | $150K | |
| Equipmentnot refundable | $48K | $200K | |
| Computer System, Office Supplies & Miscellaneous Equipmentnot refundable | $2K | $2K | |
| Promotional Materialsnot refundable | $500 | $3K | |
| Grand Opening Advertising Requirementnot refundable | $5K | $5K | |
| Permits and Licensesnot refundable | $400 | $4K | |
| Training Expensesnot refundable | $100 | $2K | |
| Signagenot refundable | $3K | $10K | |
| In-Store Camera Surveillance Systemnot refundable | $500 | $1K | |
| Prepaid Insurance Premiumnot refundable | $3K | $5K | |
| Utility and Telephone Depositsnot refundable | $500 | $2K | |
| Legal Costsnot refundable | $500 | $2K | |
| Initial Inventorynot refundable | $4K | $8K | |
| Additional Fundsnot refundable | $10K | $25K | |
| Total initial investment | $175K | $496K |
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.
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
$86K
14.0% margin
Unlevered ROIC
25%
EBITDA / total invested capital
Payback
3.9 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $150K – $496K
- Better than avg vs category
- Liquid capital req'd
- $5K – $25K
- Better than avg vs category
- Franchise fee
- $25K – $40K
- Below avg, review vs category
- Royalty
- 6.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
- Payback period
- 0.5 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $0 |
| Transfer fee | $20K |
| Renewal fee | $20K |
| Total fee load | 8.0% of rev |
Financial Performance
- Avg gross sales
- $612K
- Per unit, per year
- Median gross sales
- $513K
- Avg p&l bottom line
- $611K
- Reported as P&L Bottom Line in FDD Item 19
- Cash-on-cash
- 189.5%
- Based on P&L Bottom Line / investment midpoint
- Item 19 type
- Historical Performance
- Sample size
- 111 units
- vs category median 28 · large
- Range (low → high)
- $136K→$1.9M
- Cohort dispersion (min → max)
- Quartile band
- $336K→$961K
- Bottom 25% → top 25%
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How Philly Pretzel Factory Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 162
- Opened
- 14
- Last reporting year
- Closed
- 4
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 2.5%
- Company-owned
- 7
- Corporate units in the system
- % franchised
- 96%
- vs corporate-owned
- Net growth (yr3)
- +6.2%
- Net unit change last year
- 3-yr CAGR
- +8.4%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 11
- Projected new
- 22
- Franchisor's next-year forecast
- Transfer rate
- 6.8%
- Owners selling to other franchisees
- Termination rate
- 0.6%
- Franchisor-initiated terminations
- Ceased ops
- 3.1%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 4 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
- 123
- Loan volume
- $21.6M
- Median loan
- $222K
- 50th percentile
- Charge-off rate
- 24.5%
- 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)
- 90.0%
- 5-yr charge-off
- 10.0%
- Loans approved 2021+
- Active lenders
- 34
- Defaults
- 23
Vintage analysis
Philly Pretzel Factory charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Philly Pretzel Factory'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
- 10-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
A 24.5% charge-off rate means roughly 1 in 4 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Philly Pretzel Factory presents moderate-to-cautious risk due to unverified financial claims, past litigation involving the founder, modest unit growth, and lack of disclosed Item 19 data to validate franchisee profitability.
Litigation (Item 3)
UC Twister, LLC v. Soft Pretzel Franchise Systems, Inc. and Ron Heil (Court of Common Pleas of Philadelphia County, Pennsylvania, Case No. 170703995). Filed August 4, 2017, amended September 26, 2017. Claims included conversion of funds held as escrow agent, breach of fiduciary duty, fraud, fraudulent inducement, unjust enrichment, detrimental reliance, constructive trust, tortious interference, breach of oral and quasi-contracts, and conspiracy. Plaintiff sought $2,000,000 in damages. Settled November 15, 2018 with Soft Pretzel purchasing certain assets for $97,000 and mutual releases. Dismissed with prejudice.
Largest disclosed settlement: $97,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Herbein + Company Inc.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 62 / 100 rating
- 01HIGHPast litigation involving founder Ron Heil for conversion of funds, breach of fiduciary duty, and fraud — even though settled, raises governance concerns about corporate oversight and financial controls
- 02MEDNo Item 19 (Financial Performance Representations) disclosed — the claimed $611k average net income cannot be independently verified and may not be representative of typical franchisee experience
- 03MINORModest unit growth of 6.2% YoY in a mature 162-unit system suggests market saturation or execution challenges; unclear if growth is accelerating or decelerating
- 04MINORWide investment range ($149.5k–$495.7k) indicates highly variable unit economics depending on location, format, or build-out scope — suggests inconsistent support or unclear path to profitability
- 05MINORSuspiciously high claimed net income ($611k) nearly equals average revenue ($612k), implying ~99% net margins — mathematically implausible and a red flag for data accuracy or cherry-picked locations
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 |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Pennsylvania |
| Litigation count | 1 |
View Item 3 litigation summary
UC Twister, LLC v. Soft Pretzel Franchise Systems, Inc. and Ron Heil (Court of Common Pleas of Philadelphia County, Pennsylvania, Case No. 170703995). Filed August 4, 2017, amended September 26, 2017. Claims included conversion of funds held as escrow agent, breach of fiduciary duty, fraud, fraudulent inducement, unjust enrichment, detrimental reliance, constructive trust, tortious interference, breach of oral and quasi-contracts, and conspiracy. Plaintiff sought $2,000,000 in damages. Settled November 15, 2018 with Soft Pretzel purchasing certain assets for $97,000 and mutual releases. Dismissed with prejudice.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 45 hrs
- Training location
- 1525 Ford Road, Bensalem, PA or another location designated by franchisor
- Ongoing training
- Required
- Field support
- 55 hrs/yr
- On-site visits per year
- Time to open
- 12 mo
- From signing to launch
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
63 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Philly Pretzel Factory · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Philly Pretzel Factory franchise?
The total investment to open a Philly Pretzel Factory franchise ranges from $150K – $496K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Philly Pretzel Factory franchise owners earn?
According to Item 19 of the Philly Pretzel Factory FDD, the average gross sales per unit is $612K. The median is $513K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Philly Pretzel Factory's franchise failure rate?
Based on SBA 7(a) loan data, Philly Pretzel Factory has a charge-off rate of 24.5% across 123 loans, meaning 24.5% 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 Philly Pretzel Factory franchise locations are there?
As of their most recent FDD filing, Philly Pretzel Factory has 162 total units in the United States, including 143 franchised units and 7 company-owned units. 14 new units were opened in the latest reporting year.
Is Philly Pretzel Factory a good franchise to buy?
FranchiseVerdict rates Philly Pretzel Factory as a B-grade franchise with a risk score of 62 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.