PretzelmakerFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Pretzelmaker franchise requires a total initial investment of $392K – $573K, including a $25K franchise fee and an ongoing 7.0% royalty[2]. Per the 2025 FDD, average unit revenue was $559K[2]. SBA 7(a) loans show a 10.3% charge-off rate across 30 loans[1]. Verdict grade: C. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $392K – $573K
- 27th pct Service Resta…
- Avg gross sales
- $559K
- 3rd pct Service Resta…
- Royalty
- 7.0%
- 42nd pct Service Resta…
- Units
- 129
- 43rd pct Service Resta…
- SBA default
- 10.3%
- 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
The system contracted 5% year-over-year. Investigate why units are closing.
Bottom line
- Total investment $392K – $573K including a $25K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $559K/year (median $484K).
- Verdict C (Average) with a risk score of 66/100. SBA loan charge-off rate of 10.3% across 30 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System contracting at -12.2% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- PM Franchising, LLC
- Parent company
- FAT Brands, Inc.
- Incorporated in
- DE
- HQ
- 9720 Wilshire Boulevard Suite 500, Beverly Hills, California, 90212
- Auditor
- Macias Gini & O’Connell LLP
- Audited financials
- Franchisor revenue
- $4.7M
- vs $5.4M prior year
Overview
About
Pretzelmaker franchisees operate kiosk-based or small-footprint retail locations selling handmade pretzels and pretzel-based snacks, typically in malls, airports, or high-traffic venues. Daily operations include product preparation, inventory management, customer service, and food safety compliance. Franchisees are responsible for staff hiring/training, local marketing, and meeting corporate brand standards while paying 7% of net sales in royalties to FAT Brands.
- CEO
- Taylor Wiederhorn
- Founded
- 2007
- FDD year
- 2025
- States available
- 31
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $25K | $25K |
| Working capital (3–6 mo) | $8K | $12K |
| Equipment, build-out, other | $359K | $536K |
| Total initial investment | $392K | $573K |
Source: Pretzelmaker 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
$50K
9.0% margin
Unlevered ROIC
10%
EBITDA / total invested capital
Payback
9.8 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $392K – $573K
- Better than avg vs category
- Liquid capital req'd
- $8K – $12K
- Better than avg vs category
- Franchise fee
- $25K – $25K
- Better than avg vs category
- Royalty
- 7.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 7.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $2K |
| Transfer fee | $15K |
| Renewal fee | $10K |
| Total fee load | 9.0% of rev |
Financial Performance
- Avg gross sales
- $559K
- Per unit, per year
- Median gross sales
- $484K
- Item 19 type
- Historical financial and operating data
- Sample size
- 103 units
- vs category median 13 · large
- Range (low → high)
- $102K→$1.4M
- Cohort dispersion (min → max)
- Transparency
- 7 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Pretzelmaker Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 129
- Opened
- 5
- Last reporting year
- Closed
- 12
- Turnover rate
- 9.3%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -5.1%
- Net unit change last year
- 3-yr CAGR
- -12.2%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 9
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 26 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
- 30
- Loan volume
- $4.0M
- Median loan
- $95K
- 50th percentile
- Charge-off rate
- 10.3%
- 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)
- 89.7%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 22
- Defaults
- 3
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Pretzelmaker'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 15 states
- Startup risk premium and job creation velocity
- 18-year lending trend
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Pretzelmaker presents HIGH RISK due to a contracting franchise system (-5.1% YoY), non-disclosed profitability, parent company SEC violations and fraud allegations, regulatory action, and unprotected territories—creating poor unit economics on a declining brand.
Audited financials (Item 21)
Yes · Macias Gini & O’Connell LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 66 / 100 rating
- 01MINORParent company (FAT Brands) under SEC investigation with pending putative class action and prior securities settlement indicating financial reporting credibility issues
- 02MINORSystem declining 5.1% YoY with only 129 units remaining, suggesting deteriorating franchise viability and market saturation
- 03MEDNo Item 19 (Average Net Income) disclosed despite $559K average revenue, preventing accurate ROI calculation and raising transparency concerns
- 04MINORVirginia state regulatory action against franchisor for franchise registration and reporting inaccuracies demonstrating compliance failures
- 05MINORUnprotected territory creates direct competition risk from other Pretzelmaker franchisees in same market
- 06MINORHigh initial investment ($391.5K-$573K) paired with 7% royalty burden on declining average revenue of $559K yields marginal unit economics
- 07MINOR15-year term lock-in with shrinking system reduces exit liquidity and resale value
- 08HIGHMultiple litigations involving alleged fraud against affiliate entities signal corporate governance and ethical concerns within parent company structure
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 | 15 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | none |
| Protected territory | No |
| 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 | 10 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | California |
| Litigation count | 8 |
Items 10, 11
Training & Operations
- Classroom training
- 0 hrs
- On-the-job training
- 23 hrs
- POS system
- Brand Technology System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Brand Technology System
Item 20 · call current owners
Franchisee Contacts
93 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Pretzelmaker · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Pretzelmaker franchise?
The total investment to open a Pretzelmaker franchise ranges from $392K – $573K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Pretzelmaker franchise owners earn?
According to Item 19 of the Pretzelmaker FDD, the average gross sales per unit is $559K. The median is $484K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Pretzelmaker's franchise failure rate?
Based on SBA 7(a) loan data, Pretzelmaker has a charge-off rate of 10.3% across 30 loans, meaning 10.3% 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 Pretzelmaker franchise locations are there?
As of their most recent FDD filing, Pretzelmaker has 129 total units in the United States, including 129 franchised units and 0 company-owned units. 5 new units were opened in the latest reporting year.
Is Pretzelmaker a good franchise to buy?
FranchiseVerdict rates Pretzelmaker as a C-grade franchise with a risk score of 66 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 Pretzelmaker, 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.