Schlotzsky’sFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Schlotzsky’s franchise requires a total initial investment of $648K – $2.0M, including a $36K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.1M[2]. SBA 7(a) loans show a 20.6% charge-off rate across 533 loans[1]. Verdict grade: B. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $648K – $2.0M
- 38th pct Service Resta…
- Avg gross sales
- $1.1M
- 12th pct Service Resta…
- Royalty
- 6.0%
- 26th pct Service Resta…
- Units
- 308
- 46th pct Service Resta…
- SBA default
- 20.6%
- 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
20.6% of SBA loans charged off across 533 loans, above the 16% franchise average.
The system contracted 5% year-over-year. Investigate why units are closing.
Bottom line
- Total investment $648K – $2.0M including a $36K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $1.1M).
- Verdict B (Above Average) with a risk score of 56/100. SBA loan charge-off rate of 20.6% across 533 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System contracting at -6.4% 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
- SCHLOTZSKY’S FRANCHISOR SPV LLC
- Parent company
- GoTo Foods LLC
- Incorporated in
- DE
- HQ
- 5620 Glenridge Drive NE, Atlanta, Georgia 30342
- Auditor
- Grant Thornton LLP
- Audited financials
- Franchisor revenue
- $299.2M
- vs $308.9M prior year
Overview
About
Franchisees operate fast-casual sandwich and pizza restaurants serving made-to-order specialty items. Day-to-day responsibilities include managing kitchen and front-of-house staff, food preparation oversight, inventory control, marketing execution within brand guidelines, and royalty/rent payment obligations on a typical $1.11M annual revenue base.
- CEO
- James (Jim) E. Holthouser
- Headquarters
- GA
- Founded
- 2017
- FDD year
- 2025
- States available
- 25
FDD Item 7 · 2025 filing · 68 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee (Small Format) | $36K | $36K | |
| Construction and Build Out Costs (Small Format) | $288K | $360K | |
| Permitting (Small Format) | $2K | $11K | |
| Equipment Package (Small Format) | $134K | $153K | |
| Millwork (Small Format) | $20K | $22K | |
| Furniture (Small Format) | $3K | $7K | |
| Menu Board, Graphics and Interior Signage (Small Format) | $7K | $8K | |
| Exterior Signage (Small Format) | $15K | $19K | |
| Computer System (Small Format) | $23K | $27K | |
| Smallwares (Small Format) | $7K | $8K | |
| TV/Music (Small Format) | $0 | $3K | |
| Architect/Engineer (Small Format) | $5K | $30K | |
| Rent (Small Format) | $3K | $8K | |
| Grand Opening Marketing (Small Format) | $15K | $25K | |
| Legal and Accounting Fees (Small Format) | $3K | $12K | |
| Insurance (Small Format) | $2K | $9K | |
| Misc. Opening Costs/Office Supplies (Small Format) | $500 | $5K | |
| Security Deposits (Small Format) | $7K | $10K | |
| Management Training Program Fee (Small Format) | $0 | $10K | |
| Travel and Living Expenses during Training (Small Format) | $10K | $40K | |
| Total initial investment | $2.8M | $4.2M |
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
$89K
8.0% margin
Unlevered ROIC
7%
EBITDA / total invested capital
Payback
15.2 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $648K – $2.0M
- Better than avg vs category
- Liquid capital req'd
- $39K – $71K
- Better than avg vs category
- Franchise fee
- $36K – $36K
- Better than avg vs category
- Royalty
- 6.0%
- Net Sales · typical 6–8%
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 10.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 4.0% of gross sales |
| Technology fee | $230 |
| Transfer fee | $18K |
| Renewal fee | $7K |
| Total fee load | 10.0% of rev |
Financial Performance
- Avg gross sales
- $1.1M
- Per unit, per year
- Median gross sales
- $1.1M
- Item 19 type
- net_sales
- Sample size
- 238 units
- vs category median 13 · large
- Range (low → high)
- $245K→$2.8M
- Cohort dispersion (min → max)
- Quartile band
- $606K→$1.7M
- Bottom 25% → top 25%
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 1264 Full-Service Restaurants brands
Revenue is only 0.9x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
vs Full-Service Restaurants averages
How Schlotzsky’s Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 308
- Opened
- 4
- Last reporting year
- Closed
- 13
- Terminated
- 12
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.2%
- Company-owned
- 28
- Corporate units in the system
- % franchised
- 91%
- vs corporate-owned
- Net growth (yr3)
- -5.1%
- Net unit change last year
- 3-yr CAGR
- -6.4%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 42
- Transfer rate
- 13.6%
- Owners selling to other franchisees
- Termination rate
- 4.2%
- Franchisor-initiated terminations
- Ceased ops
- 6.2%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 7 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
- 533
- Loan volume
- $217.0M
- Median loan
- $407K
- average
- Charge-off rate
- 20.6%
- 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)
- N/A
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 103
- Defaults
- 89
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Schlotzsky’s's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 5 lenders with concentration factor
- Per-state charge-off rates across 10 states
- Startup risk premium and job creation velocity
- 15-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
A 20.6% charge-off rate means roughly 1 in 5 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Schlotzsky's presents moderate-to-high risk due to shrinking unit base, undisclosed profitability metrics, legacy litigation, and long franchise commitment relative to declining system momentum.
Litigation (Item 3)
FYA Project, LLC and Fernando Lara-Celis v. Schlotzsky's entities and employees. Claims: tortious interference with prospective business relationship, tortious interference with existing contract, negligent misrepresentation, breach of contract, deceptive conduct under Texas Deceptive Trade Practices Act, fraud, and breach of fiduciary duty. Original demand: $3 million plus multiple damages, exemplary/punitive damages and attorneys' fees. Case referred to binding arbitration on August 28, 2014. Settled on March 8, 2016.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Grant Thornton LLP
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 56 / 100 rating
- 01MINORDeclining unit count (-5.1% YoY) suggests system contraction and potential market saturation or franchisee dissatisfaction
- 02MINORNo Item 19 (Average Unit Volume) disclosure limits ability to validate $1.11M avg revenue claim against actual profitability
- 03MINORHigh initial investment range ($647K-$1.95M) with 6% royalty creates significant break-even burden; unclear if avg revenue supports ROI
- 04HIGHLitigation history: predecessor interference claim ($250K settlement) plus parent company affiliate settlements (Arby's/Dunkin') on labor practices raise operational/reputational concerns
- 05MINOR20-year term is longer than industry standard (10-15 years typical), reducing franchisee flexibility and increasing long-term capital risk
- 06MEDProtected territory provides competitive advantage but doesn't offset unit decline and profitability uncertainty
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 | 20 years |
|---|---|
| Renewal term | 20 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Georgia |
| Litigation count | 4 |
View Item 3 litigation summary
FYA Project, LLC and Fernando Lara-Celis v. Schlotzsky's entities and employees. Claims: tortious interference with prospective business relationship, tortious interference with existing contract, negligent misrepresentation, breach of contract, deceptive conduct under Texas Deceptive Trade Practices Act, fraud, and breach of fiduciary duty. Original demand: $3 million plus multiple damages, exemplary/punitive damages and attorneys' fees. Case referred to binding arbitration on August 28, 2014. Settled on March 8, 2016.
Items 10, 11
Training & Operations
- Classroom training
- 50 hrs
- On-the-job training
- 200 hrs
- Training location
- On-site at Restaurant
- POS system
- POS System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: POS System
Item 20 · call current owners
Franchisee Contacts
94 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Schlotzsky’s · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Schlotzsky’s franchise?
The total investment to open a Schlotzsky’s franchise ranges from $648K – $2.0M, with an initial franchise fee of $36K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Schlotzsky’s franchise owners earn?
According to Item 19 of the Schlotzsky’s FDD, the average gross sales per unit is $1.1M. The median is $1.1M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Schlotzsky’s's franchise failure rate?
Based on SBA 7(a) loan data, Schlotzsky’s has a charge-off rate of 20.6% across 533 loans, meaning 20.6% 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 Schlotzsky’s franchise locations are there?
As of their most recent FDD filing, Schlotzsky’s has 308 total units in the United States, including 267 franchised units and 28 company-owned units. 4 new units were opened in the latest reporting year.
Is Schlotzsky’s a good franchise to buy?
FranchiseVerdict rates Schlotzsky’s as a B-grade franchise with a risk score of 56 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.