Schlotzsky’s Franchise Cost, Revenue & Review 2026
- Investment
- $658K – $934K
- Disclosed sales
- $1.1M
- gross sales, not profit
- SBA charge-off
- 20.6%
- on 533 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Schlotzsky's is a fast-casual franchise known for its toasted sourdough-bun sandwiches, plus pizzas, salads, and soups. Franchisees run restaurants managing food prep, counter service, and staffing.
FranchiseVerdict summary · 2026
A Schlotzsky’s franchise requires a total initial investment of $658K – $934K, 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]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $658K – $934K
- 84th pct Service Resta…
- Avg gross sales
- $1.1M
- Net sales22nd pct Service Resta…
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 308
- 86th pct Service Resta…
- SBA charge-off
- 20.6%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants median · 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 $658K – $934K including a $36K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.1M/year (median $1.1M).
- RISKVerdict B (Above average), verdict score 51/100 (higher is better). 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, 2010–2025).
- GROWTHNegative: net -15 franchised outlets in the latest year (4 opened, 19 closed); 64 signed but not yet open (Item 20).
- DECLINESystem 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
Corporate structure & franchisor financials
- Legal entity
- Schlotzsky's Franchisor SPV LLC
- Parent company
- GoTo Foods Systems LLC
- FDD Item 1, page 10 of the 2025 FDD
- Ultimate parent
- GoTo Foods LLC (formerly Focus Brands LLC)
- FDD Item 1, page 10 of the 2025 FDD
- Predecessor
- Schlotzsky's Franchise LLC (SFL)
- Prior franchisor entity
- Incorporated in
- Delaware
- HQ
- 5620 Glenridge Drive NE, Atlanta, Georgia 30342
- Auditor
- Grant Thornton LLP
- Audited financials
- Franchisor revenue
- $308.9M
- vs $299.2M prior year
Same owner · FDD Item 1, page 10
6 other brands on this site name GoTo Foods LLC (formerly Focus Brands LLC) as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- James (Jim) E. Holthouser
- Headquarters
- GA
- Founded
- 1971
- FDD year
- 2025
- States available
- 25
Can you afford it, and what does the money buy?
Entry cost runs 64% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown25 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $36K | $36K | |
| Construction and Build Out Costs | $288K | $360K | |
| Permitting | $2K | $11K | |
| Equipment Package | $134K | $153K | |
| Millwork | $20K | $22K | |
| Furniture | $3K | $7K | |
| Menu Board, Graphics and Interior Signage | $7K | $8K | |
| Exterior Signage | $15K | $19K | |
| Computer System | $23K | $27K | |
| Smallwares | $7K | $8K | |
| TV/Music | $0 | $3K | |
| Architect/Engineer | $5K | $30K | |
| Rent | $3K | $8K | |
| Grand Opening Marketing | $15K | $25K | |
| Legal and Accounting Fees | $3K | $12K | |
| Insurance | $2K | $9K | |
| Misc. Opening Costs/Office Supplies | $500 | $5K | |
| Security Deposits | $7K | $10K | |
| Management Training Program Fee | $0 | $10K | |
| Travel and Living Expenses during Training | $10K | $40K | |
| Total initial investment | $658K | $934K |
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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $658K – $934K
- Bottom third — review vs category
- Liquid capital req'd
- $39K – $51K
- Bottom third — review vs category
- Franchise fee
- $36K – $36K
- Middle of category vs category
- Royalty
- 6.0%
- 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 net sales |
| Technology fee | $230 |
| Transfer fee | $18K |
| Renewal fee | $7K |
| Inventory (initial) | $8K – $25K |
| Total fee load | 10.0% of rev |
What do units actually make?
Average unit sales run 16% above the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Schlotzsky’s until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$841K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Schlotzsky’s unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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
- $1.1M
- Per unit, per year
- Median gross sales
- $1.1M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Average Net Sales by Quartile for Traditional Franchises, split by drive-thru vs. non-drive-thru, Fiscal Year 2024
- Sample size
- 204 outlets
- vs category median 19 · large
- Range (low → high)
- $397K→$2.8MCited, not corroborated — printed on page 88 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $674K→$1.7M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 781 Quick-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 $1.1M/year in gross sales. Revenue-to-investment ratio: 1.4x.
Fee burden
Total ongoing fee load of 10.0% — above the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -6.4% 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 Quick-Service Restaurants medians
How Schlotzsky’s Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 308
- Opened
- 4
- Last reporting year
- Closed
- 19
- Terminated
- 12
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 6.2%
- Company-owned
- 28
- Corporate units in the system
- % franchised
- 91%
- vs corporate-owned
- Net growth (3-yr)
- -6.4%
- Net unit change over 3 years
- 3-yr CAGR
- -6.4%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 12
- Not renewed
- 1
- Reacquired
- 6
- Franchisor bought back
- Signed, not yet open
- 64
- 0.21 per open outlet · Item 20 Table 5
- Projected new
- 6
- Franchisor's next-year forecast
- 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 · 24 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.
Where the owners are · Item 20 owner list
402 current owners across 37 states.
- TE 181
- AR 32
- OK 23
- MI 16
- AL 13
- GE 12
- CO 10
- GA 10
- KA 10
- KS 10
- NE 10
- AZ 8
- +25 more states
Counts only, from the list the franchisor prints in Item 20; 19 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
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%
- on 533 loans · 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
- Typical loan rate
- 6.4%
- avg rate to borrowers
- vs industry
- N/A
- Jobs supported
- 2,232
- Lender concentration
- N/A
Borrower mix: 47% went to startups / new businesses, 53% to established operators
Top lenders financing Schlotzsky’s franchisees
Showing 3 of 103 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.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Schlotzsky’s from SBA 7(a) FOIA data.
- Avg interest rate
- 6.39%
- Avg chargeoff amount
- $284K
- Jobs supported
- 2,232
Top SBA lenders
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | BancFirst | 7 | N/A | N/A |
| 2 | JPMorgan Chase Bank, National Association | 7 | N/A | N/A |
| 3 | United Community Bank | 4 | N/A | N/A |
| 4 | Community National Bank & Trust | 3 | N/A | N/A |
| 5 | Cadence Bank | 3 | N/A | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 25 | 0 | -- |
| OKOklahoma | 9 | 0 | -- |
| SCSouth Carolina | 5 | 0 | -- |
| ALAlabama | 3 | 0 | -- |
| KSKansas | 3 | 0 | -- |
| LALouisiana | 3 | 0 | -- |
| FLFlorida | 2 | 0 | -- |
| ILIllinois | 2 | 0 | -- |
| NMNew Mexico | 2 | 0 | -- |
| WIWisconsin | 2 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
A 20.6% charge-off rate means roughly 1 in 5 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 20.6% — 29% above the 16.0% national norm, i.e. higher 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
Parent-level (GoTo Foods) financials strong: net worth $285.6M, net income $254M. One old franchisee suit settled for $250,000 in 2016; other disclosures are affiliate regulatory settlements. 308 units, audited, Item 19 disclosed, but -6.4% contraction. Judged on operations.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
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)
Financial statements are of GoTo Foods Systems LLC and Subsidiaries (parent/guarantor), consolidated across the GoTo Foods Portfolio franchise systems, not Schlotzsky's alone
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
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 51 / 100 verdict
- 01MINOROne settled 2016 franchisee suit ($250K) plus affiliate settlements
- 02MINORParent-level financials strong ($285.6M net worth)
- 03MED-6.4% unit contraction; audited, Item 19 disclosed
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 10.0% 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 | 20 years |
|---|---|
| Renewal term | 20 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory sizeℹ | Radius |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Non-compete (miles)ℹ | 3 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 12 |
| Curable defaultsℹ | 10 |
| Mandatory arbitration | Yes |
| Arbitration location | Metropolitan area of district court where franchisor's principal place of business is located (currently Georgia) |
| 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
- Ongoing training
- Required
- Site selection
- Franchisee selects, franchisor reviews and accepts based on minimum site criteria
- Franchisor financing
- Not offered
- Item 10
- POS system
- POS System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: POS System
Item 20 · call current owners
Franchisee Contacts
421 owners to call
Name · phone · city · state. Extracted from FDD Item 20
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 $658K – $934K, 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. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Schlotzsky’s?
Schlotzsky’s is franchised by Schlotzsky's Franchisor SPV LLC. Its parent company is GoTo Foods Systems LLC. The ultimate parent named in the FDD is GoTo Foods LLC (formerly Focus Brands LLC). Source: FDD Item 1, 2025 filing.
What is Item 19 in the Schlotzsky’s 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 Schlotzsky’s FDD and qualifies whose outlets they describe.
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 280 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 verdict score of 51 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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
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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.