Schlotzsky’s DeliFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Schlotzsky’s Deli franchise requires a total initial investment of $675K – $2.3M, including a $36K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.2M[2]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $675K – $2.3M
- 39th pct Service Resta…
- Avg gross sales
- $1.2M
- 12th pct Service Resta…
- Royalty
- 6.0%
- 26th pct Service Resta…
- Units
- 294
- 46th pct Service Resta…
- SBA default
- N/A
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
At 0.8x revenue per dollar invested, this system underperforms the typical 1.5-2.5x range.
Franchised units fell from 295 to 267 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $675K – $2.3M including a $36K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $1.2M/year (median $1.1M).
- Verdict A (Top Quintile) with a risk score of 20/100.
- System contracting at -9.5% 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
- Predecessor
- and offered
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 5620 Glenridge Drive NE, Atlanta, Georgia 30342
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $308.9M
- vs $321.4M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
Franchisees operate casual-service deli restaurants serving made-to-order sandwiches, salads, and soups. Daily operations include food preparation, inventory management, staffing, customer service, and maintaining brand standards. The model requires active management of labor costs, food waste, and peak-hour coordination in a competitive quick-service market.
- CEO
- Omer Gajial
- Headquarters
- GA
- Founded
- 2006
- FDD year
- 2026
- States available
- 24
FDD Item 7 · 2026 filing · 72 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee (Endcap or Inline Restaurant) | $36K | $36K | |
| Construction and Build Out Costs (Endcap or Inline) | $305K | $876K | |
| Permitting (Endcap or Inline) | $2K | $11K | |
| Equipment Package (Endcap or Inline) | $134K | $153K | |
| Millwork (Endcap or Inline) | $20K | $22K | |
| Furniture (Endcap or Inline) | $3K | $7K | |
| Menu Board, Graphics and Interior Signage (Endcap or Inline) | $7K | $8K | |
| Exterior Signage (Endcap or Inline) | $15K | $19K | |
| Computer System (Endcap or Inline) | $23K | $27K | |
| Smallwares (Endcap or Inline) | $7K | $8K | |
| TV/Music (Endcap or Inline) | $0 | $3K | |
| Architect/Engineer (Endcap or Inline) | $5K | $30K | |
| Rent (Endcap or Inline) | $3K | $16K | |
| Grand Opening Marketing (Endcap or Inline) | $15K | $25K | |
| Legal and Accounting Fees (Endcap or Inline) | $3K | $12K | |
| Insurance (Endcap or Inline) | $2K | $9K | |
| Misc. Opening Costs/Office Supplies (Endcap or Inline) | $500 | $5K | |
| Security Deposits (Endcap or Inline) | $7K | $10K | |
| Management Training Program Fee (Endcap or Inline) | $0 | $10K | |
| Travel and Living Expenses during Training (Endcap or Inline) | $10K | $40K | |
| Total initial investment | $2.7M | $4.6M |
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
$93K
8.0% margin
Unlevered ROIC
6%
EBITDA / total invested capital
Payback
16.5 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $675K – $2.3M
- Better than avg vs category
- Liquid capital req'd
- $39K – $71K
- Better than avg vs category
- Franchise fee
- $10K – $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 | $395 |
| Transfer fee | $18K |
| Renewal fee | $7K |
| Total fee load | 10.0% of rev |
Financial Performance
- Avg gross sales
- $1.2M
- Per unit, per year
- Median gross sales
- $1.1M
- Item 19 type
- net_sales
- Sample size
- 235 units
- vs category median 13 · large
- Range (low → high)
- $287K→$2.9M
- Cohort dispersion (min → max)
- Quartile band
- $620K→$1.8M
- Bottom 25% → top 25%
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 1264 Full-Service Restaurants brands
Revenue is only 0.8x 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 Deli Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 294
- Opened
- 4
- Last reporting year
- Closed
- 17
- Terminated
- 14
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 3
- Term expired, not renewed (per Item 20)
- Turnover rate
- 5.8%
- Company-owned
- 27
- Corporate units in the system
- % franchised
- 91%
- vs corporate-owned
- Net growth (yr3)
- -4.6%
- Net unit change last year
- 3-yr CAGR
- -9.5%
- Compounded over last 3 years
3-year detail · Item 20
- Terminated (3yr)
- 7
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 12
- Reacquired (3yr)
- 2
- Franchisor bought back
- Transfer rate
- 4.1%
- Owners selling to other franchisees
- Termination rate
- 5.8%
- Franchisor-initiated terminations
- Ceased ops
- 5.8%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 18 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.
Available to sell in · Item 12
- Michigan
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 516
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
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
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Schlotzsky's presents elevated risk due to shrinking unit count, withheld profitability data, affiliate litigation, and unclear return potential in a consolidating deli category.
Litigation (Item 3)
Three settled matters involving affiliates (Arby's Restaurant Group, Inc. and Dunkin' Brands, Inc.): (1) ARG - Multi-state settlement with 11 state AGs regarding 'no-poaching' provisions in franchise agreements, settled March 11, 2019, no monetary payment required; (2) DBI - Multi-state settlement with 13 state AGs regarding no-poaching provisions in franchise agreements, settled March 14, 2019; (3) DBI - New York AG lawsuit regarding credential-stuffing cyberattacks in 2015 and 2018, data privacy violations alleged, settled September 21, 2020 via consent agreement. FDD states these matters have no impact on franchisor or its brand and allege no unlawful conduct by franchisor.
Largest disclosed settlement: $3
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers 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 20 / 100 rating
- 01MINORUnit count declining 4.6% YoY (294 units) indicates contracting franchise system
- 02MINORNo Item 19 (Net Income) disclosure prevents validation of $1.16M average revenue profitability
- 03HIGHParent company litigation involving no-poaching, data privacy, and disclosure omissions suggests governance and transparency issues
- 04MEDHigh investment range ($675K-$2.26M) paired with declining unit count and undisclosed profitability creates ROI uncertainty
- 05MINOR6% royalty on net sales is standard but unprofitable locations compound the burden
- 06MINOR20-year term locks franchisees into long commitment during brand contraction
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 | Area of Protection |
| 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 | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Georgia |
| Litigation count | 4 |
View Item 3 litigation summary
Three settled matters involving affiliates (Arby's Restaurant Group, Inc. and Dunkin' Brands, Inc.): (1) ARG - Multi-state settlement with 11 state AGs regarding 'no-poaching' provisions in franchise agreements, settled March 11, 2019, no monetary payment required; (2) DBI - Multi-state settlement with 13 state AGs regarding no-poaching provisions in franchise agreements, settled March 14, 2019; (3) DBI - New York AG lawsuit regarding credential-stuffing cyberattacks in 2015 and 2018, data privacy violations alleged, settled September 21, 2020 via consent agreement. FDD states these matters have no impact on franchisor or its brand and allege no unlawful conduct by franchisor.
Items 10, 11
Training & Operations
- Classroom training
- 50 hrs
- On-the-job training
- 200 hrs
- Training location
- On-site and corporate
- Franchisor financing
- 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
97 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Schlotzsky’s Deli · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Schlotzsky’s Deli franchise?
The total investment to open a Schlotzsky’s Deli franchise ranges from $675K – $2.3M, 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 Deli franchise owners earn?
According to Item 19 of the Schlotzsky’s Deli FDD, the average gross sales per unit is $1.2M. 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 Deli's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Schlotzsky’s Deli (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Schlotzsky’s Deli franchise locations are there?
As of their most recent FDD filing, Schlotzsky’s Deli has 294 total units in the United States, including 295 franchised units and 27 company-owned units. 4 new units were opened in the latest reporting year.
Is Schlotzsky’s Deli a good franchise to buy?
FranchiseVerdict rates Schlotzsky’s Deli as a A-grade franchise with a risk score of 20 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.