Pretzelmaker Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Pretzelmaker is a snack franchise serving fresh-baked soft pretzels, bites, dogs, and dips from kiosks and small stores. Franchisees run mall and high-traffic locations managing baking, counter service, and staffing.
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]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $392K – $573K
- 19th pct Service Resta…
- Avg gross sales
- $559K
- Net sales1st pct Service Resta…
- Royalty
- 7.0%
- 34th pct Service Resta…
- Units
- 129
- 33rd pct Service Resta…
- SBA charge-off
- 10.3%
- % 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 $392K – $573K including a $25K franchise fee, 7.0% ongoing royalty.
- RETURNSAverage unit revenue of $559K/year (median $484K).
- RISKVerdict C (Average), verdict score 40/100 (higher is better). SBA loan charge-off rate of 10.3% across 30 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- DECLINESystem 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
Corporate structure & franchisor financials
- Legal entity
- PM Franchising, LLC
- Parent company
- PM Franchise Brands, LLC
- Ultimate parent
- FAT Brands Inc.
- Predecessor
- LS GFG Holdings Inc.
- Prior franchisor entity
- CEO title
- President and Chief Executive Officer
- Taylor Wiederhorn
- Incorporated in
- Delaware
- 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
- CEO
- Taylor Wiederhorn
- Founded
- 2007
- FDD year
- 2025
- States available
- 31
Can you afford it, and what does the money buy?
Entry cost runs 59% below the typical full-service restaurants franchise.
Source: FDD 2025 · Items 5–7
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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $392K – $573K
- Top 40% of category vs category
- Liquid capital req'd
- $8K – $12K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category 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 |
What do units actually make?
Average unit sales run 68% below the full-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · Item 19
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
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Pretzelmaker unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
10%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Pretzelmaker units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$224K
on $1.1M purchase
Total debt
$895K
SBA $0.6M + senior + seller note
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: 2025 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $559K
- Per unit, per year
- Median gross sales
- $484K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- historical operating data (net sales, food cost %, labor cost %) by segment
- Sample size
- 103 outlets
- vs category median 18 · large
- Range (low → high)
- $102K→$1.4M
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 7 / 10
- vs category median 3 / 10 · above
Compared against 805 Full-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $559K/year in gross sales. Revenue-to-investment ratio: 1.2x.
Fee burden
Total ongoing fee load of 9.0% — above the Full-Service Restaurants average of 7.6%.
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -12.2% 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 Pretzelmaker Compares
Is the system healthy?
Source: FDD 2025 · Item 20
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 (3-yr)
- -12.2%
- Net unit change over 3 years
- 3-yr CAGR
- -12.2%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 5
- Closed (3yr)
- 12
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 9
- Reacquired (3yr)
- 0
- Franchisor bought back
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.
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
- 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
- Typical loan rate
- 6.6%
- avg rate to borrowers
- Franchised industry avg
- 31.2%
- brand beats franchise avg ↓
- Jobs supported
- 302
- 7.5 per loan
- Lender concentration
- 13%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Franchise vs independent — in snack and nonalcoholic beverage bars, franchised businesses charge off at 31.2% vs 27.4% for independents — franchising is associated with 14% higher SBA default risk in this category.
Top lenders financing Pretzelmaker franchisees
Showing 3 of 22 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 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.
What could kill this investment?
SBA loans charge off at 10.3% — 35% below the 16.0% national norm, i.e. lower 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
7 litigation matters but nearly all are securities class actions/regulatory settlements against parent FAT Brands, not Pretzelmaker directly, mostly settled or dismissed, across a 129-unit system. Only one franchisee-side dispute. No bankruptcy or going-concern; audited with Item 19. Negative net growth -12.2% is a mild concern.
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 40 / 100 verdict
- 01HIGH7 litigation matters, mostly parent-level (FAT Brands) not brand-level
- 02MINORNegative net growth -12.2%
- 03MED129 units, audited financials, Item 19 disclosed
- 04MINORNo bankruptcy or going-concern
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 9.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 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 Item 19 in the Pretzelmaker 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 Pretzelmaker FDD and qualifies whose outlets they describe.
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 verdict score of 40 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.