The Red Chickz Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
The Red Chickz is a fast-casual franchise serving Nashville-style hot chicken sandwiches and tenders. Franchisees run the restaurants, managing food prep, staffing, and counter service.
FranchiseVerdict summary · 2026
A The Red Chickz franchise requires a total initial investment of $425K – $883K, including a $40K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.5M[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $425K – $883K
- 69th pct Service Resta…
- Avg gross sales
- $1.5M
- n=125th pct Service Resta…
- Royalty
- 6.0%
- 46th pct Service Resta…
- Units
- 5
- 24th pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-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 $425K – $883K including a $40K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.5M/year (median $1.5M).
- RISKVerdict B (Above average), verdict score 55/100 (higher is better).
- FLAGRevenue data based on only 1 reporting unit. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Red Dot Restaurant Group, Inc.
- Parent company
- Seven Dots, LLC (owns Marks/IP); GSN Distribution, Inc. (system supplier affiliate)
- CEO title
- Founder & CEO
- Shahram (Shawn) Lalehzarian
- Incorporated in
- Nevada
- HQ
- 107 East Charleston, 242, Clark County, Nevada 89104
- Auditor
- Golbar & Associates
- Audited financials
- Franchisor revenue
- $7K
- vs $45K prior year
Overview
About
- CEO
- Shahram (Shawn) Lalehzarian
- Headquarters
- NV
- Founded
- 2020
- FDD year
- 2026
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost is about average for a quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $40K | $40K |
| Working capital (3–6 mo) | $19K | $57K |
| Equipment, build-out, other | $366K | $786K |
| Total initial investment | $425K | $883K |
Source: The Red Chickz 2026 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
- $425K – $883K
- Bottom third — review vs category
- Liquid capital req'd
- $19K – $57K
- Top 40% of category vs category
- Franchise fee
- $40K – $40K
- Middle of category vs category
- Royalty
- 6.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $60 |
| Transfer fee | $30K |
| Renewal fee | $20K |
| Total fee load | 7.0% of rev |
What do units actually make?
Average unit sales run 21% above the quick-service restaurants norm.
Based on a single reporting unit - not a system average
Source: FDD 2026 · 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
$219K
15.0% margin
Unlevered ROIC
32%
EBITDA / total invested capital
Payback
3.2 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 The Red Chickz unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
32%
Within 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 The Red Chickz units return on equity?
Equity IRR · 5-yr
41.7%
5.71× MOIC
Year-1 DSCR
2.06×
EBITDA ÷ debt service
Equity required
$3.2M
on $11.7M purchase
Total debt
$8.5M
SBA $5.0M + 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: 2026 FDD
Financial Performance
Based on a single reporting unit - not a system average
- Avg gross sales
- $1.5M
- Per unit, per year
- Median gross sales
- $1.5M
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
- Sample size
- 1
- vs category median 20 · small
- Reported figure
- $1.5M
- A single outlet — not a range
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2024
- Transparency
- 3 / 10
- vs category median 4 / 10 · below
Compared against 782 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 $1.5M/year in gross sales. Revenue-to-investment ratio: 2.2x.
Fee burden
Total ongoing fee load of 7.0% (near the Quick-Service Restaurants average).
Disclosure
Transparency score 3/10 — moderate disclosure depth. Average and range data are available but detailed cohort breakdowns may be limited. Sample size of 1 unit — treat as directional only.
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 averages
How The Red Chickz Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 5
- Opened
- 1
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 60%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 2
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
Last reporting year only, multi-year history not disclosed in this brand's FDD.
Item 20 · 4 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 loan disclosures. This brand has only 3 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 3
- Loan volume
- $1.1M
- Median loan
- $336K
- 50th percentile
- Charge-off rate
- N/A
- limited sample (3 loans) — rate not shown below 10
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
- 3
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Audited financials (Item 21)
Yes · Golbar & Associates
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 55 / 100 verdict
- 01MINORNegative net worth -$381,992, net loss -$161,962 (early-stage)
- 02MINORNo going-concern note
- 03MEDItem 19 disclosed, avg gross sales $1,457,743
- 04MINORTiny system (5 units)
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius or Zip Code |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Nevada |
| Litigation count | 0 |
Items 10, 11
Training & Operations
- Classroom training
- 16 hrs
- On-the-job training
- 62 hrs
- POS system
- Toast
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast
Item 20 · call current owners
Franchisee Contacts
4 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
The Red Chickz · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a The Red Chickz franchise?
The total investment to open a The Red Chickz franchise ranges from $425K – $883K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do The Red Chickz franchise owners earn?
According to Item 19 of the The Red Chickz FDD, the average gross sales per unit is $1.5M. The median is $1.5M. Important context: Based on a single reporting unit - not a system average. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the The Red Chickz 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 The Red Chickz FDD and qualifies whose outlets they describe.
What is The Red Chickz's franchise failure rate?
SBA 7(a) loan charge-off data is not available for The Red Chickz (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 The Red Chickz franchise locations are there?
As of their most recent FDD filing, The Red Chickz has 5 total units in the United States, including 3 franchised units and 2 company-owned units. 1 new units were opened in the latest reporting year.
Is The Red Chickz a good franchise to buy?
FranchiseVerdict rates The Red Chickz as a B-grade franchise with a verdict score of 55 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?
If you represent The Red Chickz, you can request corrections or provide updated information.
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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.