Wendy's Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Wendy's is a quick-service burger chain known for fresh, never-frozen beef, sandwiches, and Frostys. Franchisees operate individual restaurants covering food prep, staffing, and drive-thru service within a set territory.
FranchiseVerdict summary · 2026
A Wendy's franchise requires a total initial investment of $1.6M – $3.1M, including a $25K – $50K franchise fee and an ongoing 4.0% royalty[2]. Per the 2026 FDD, average unit revenue was $2.0M[2]. SBA 7(a) loans show a 0.8% charge-off rate across 200 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $1.6M – $3.1M
- 98th pct Service Resta…
- Avg gross sales
- $2.0M
- 31st pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 5,969
- 96th pct Service Resta…
- SBA charge-off
- 0.8%
- % 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 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 $1.6M – $3.1M including a $50K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $2.0M/year (median $1.9M). Note: this is gross profit, not take-home income.
- RISKVerdict A (Strongest tier), verdict score 79/100 (higher is better). SBA loan charge-off rate of 0.8% across 200 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- TERMSNo protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Quality Is Our Recipe, LLC
- Parent company
- Wendy's Restaurants, LLC
- Ultimate parent
- The Wendy's Company
- Predecessor
- Wendy's International, LLC
- Prior franchisor entity
- CEO title
- Interim Chief Executive Officer, Chief Financial Officer, and Manager
- Ken Cook
- Incorporated in
- Delaware
- HQ
- One Dave Thomas Boulevard, Dublin, Ohio 43017
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $562.0M
- vs $587.7M prior year
Independent franchisee associations
- Independent Franchisee Association
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
- CEO
- Ken Cook
- Headquarters
- OH
- Founded
- 1969
- FDD year
- 2026
- States available
- 50
Can you afford it, and what does the money buy?
Entry cost runs 256% above the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown5 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Technical Assistance Fee | $50K | $50K | |
| Building | $1.0M | $2.2M | |
| Equipment | $380K | $650K | |
| Pre-Opening Expenses, Training Expenses, and Additional Operating Funds | $117K | $205K | |
| Real Property | — | — | |
| Total initial investment | $1.6M | $3.1M |
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
- $1.6M – $3.1M
- Bottom third — review vs category
- Liquid capital req'd
- $88K – $163K
- Bottom third — review vs category
- Franchise fee
- $25K – $50K
- Bottom third — review vs category
- Royalty
- 4.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 1.50-4.00% of Gross Sales for national advertising, 0.50%…
- Total fee load
- 10.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Transfer fee | $5K |
| Renewal fee | $25 |
| Inventory (initial) | $25K – $141K |
| Total fee load | 10.0% of rev |
What do units actually make?
Average unit sales run 65% above the quick-service restaurants norm.
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
$299K
15.0% margin
Unlevered ROIC
12%
EBITDA / total invested capital
Payback
8.3 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 Wendy's unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
12%
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 Wendy's units return on equity?
Equity IRR · 5-yr
33.0%
4.16× MOIC
Year-1 DSCR
2.45×
EBITDA ÷ debt service
Equity required
$6.2M
on $15.9M purchase
Total debt
$9.8M
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
- Avg gross sales
- $2.0M
- Per unit, per year
- Median gross sales
- $1.9M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 5,347
- vs category median 20 · large
- Range (low → high)
- $392K→$7.7M
- Cohort dispersion (min → max)
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 0 / 10
- vs category median 4 / 10 · below
Compared against 782 Quick-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.
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 $2.0M/year in gross sales. Revenue-to-investment ratio: 0.9x.
Fee burden
Total ongoing fee load of 10.0% — above the Quick-Service Restaurants average of 7.9%.
Disclosure
Transparency score 0/10 — minimal disclosure beyond the required average. Hard to judge the distribution of outcomes across units.
Operator retention
System roughly stable (-1.4% 3-year CAGR) with 5,969 units.
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 Wendy's Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 5,969
- Opened
- N/A
- Last reporting year
- Closed
- N/A
- Company-owned
- 423
- Corporate units in the system
- % franchised
- 93%
- vs corporate-owned
- Net growth (3-yr)
- -1.4%
- Net unit change over 3 years
- 3-yr CAGR
- -1.4%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 93
- Closed (3yr)
- 4,033
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 32
- Transfers (3yr)
- 113
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 37
- Franchisor's next-year forecast
- Transfer rate
- 75.8%
- Owners selling to other franchisees
- Termination rate
- 21.5%
- Franchisor-initiated terminations
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 50 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
- 200
- Loan volume
- $151.4M
- Median loan
- $536K
- 50th percentile
- Charge-off rate
- 0.8%
- 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)
- 98.7%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 54
- Defaults
- 1
- Typical loan rate
- 6.5%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand beats franchise avg ↓
- Jobs supported
- 3,825
- 4.5 per loan
- Lender concentration
- 12%
- top lender's share
Borrower mix: 70% went to startups / new businesses, 30% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Vintage analysis
Wendy's charge-off rate by loan vintage
Top lenders financing Wendy's franchisees
Showing 3 of 54 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 Wendy's'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
- 28-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 0.8% charge-off rate across 200 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.8% — 95% 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
Litigation (Item 3)
11 case reference(s): 1 pending, 2 settled.
Largest disclosed settlement: $950,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 79 / 100 verdict
- 01MINORStrong financials: $915M net worth, $517M net income
- 02MEDAudited financials, Item 19 disclosed
- 03MEDSlight net unit decline of -1.4%, immaterial
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 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 20 years |
| Territory type | Specific location |
| Protected territory | No |
| Online sales rightsℹ | Granted |
| 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 | 2 |
| Curable defaultsℹ | 5 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Ohio |
| Litigation count | 4 |
View Item 3 litigation summary
11 case reference(s): 1 pending, 2 settled.
Items 10, 11
Training & Operations
- Classroom training
- 20 hrs
- On-the-job training
- 520 hrs
- Training location
- On-site and pre-opening
- Site selection
- franchisor
- Franchisor financing
- Offered
- Item 10
- POS system
- Aloha POS software supplied by NCR
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Aloha POS software supplied by NCR
Item 20 · call current owners
Franchisee Contacts
5,958 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Wendy's · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Wendy's franchise?
The total investment to open a Wendy's franchise ranges from $1.6M – $3.1M, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Wendy's franchise owners earn?
According to Item 19 of the Wendy's FDD, the average gross sales per unit is $2.0M. The median is $1.9M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Wendy'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 Wendy's FDD and qualifies whose outlets they describe.
What is Wendy's's franchise failure rate?
Based on SBA 7(a) loan data, Wendy's has a charge-off rate of 0.8% across 200 loans, meaning 0.8% 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 Wendy's franchise locations are there?
As of their most recent FDD filing, Wendy's has 5,969 total units in the United States, including 5,546 franchised units and 423 company-owned units.
Is Wendy's a good franchise to buy?
FranchiseVerdict rates Wendy's as a A-grade franchise with a verdict score of 79 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 Wendy's, you can request corrections or provide updated information.
Other Quick-Service Restaurants franchises
Compare similar franchise opportunities in the Quick-Service Restaurants category
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.