Bottom line
- Total investment $189K – $725K including a $40K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $813K/year (median $670K). Estimated payback in 2.4 years.
- Rated STRONG with a risk score of 42/100. SBA loan default rate of 0.0% across 144 loans (below the industry average).
- 18 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Wetzel’s Pretzels unit return on the cash you put in?
Unlevered ROIC · per unit
16%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Wetzel’s Pretzels units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$488K
on $2.4M purchase
Total debt
$2.0M
SBA $1.2M + senior + seller note
Overview
About
Wetzel's Pretzels franchisees operate quick-service pretzel shops, typically in high-traffic locations (malls, airports, street-front). Day-to-day operations involve producing hand-rolled pretzels, managing inventory of toppings/dipping sauces, staffing 3-8 employees, handling POS systems, and managing food safety compliance. Most locations are non-traditional (kiosks, carts, co-branded spaces) with minimal seating.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 6 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Caution-level investment with meaningful litigation exposure, undisclosed financial performance data, and modest unit growth offsetting the brand's operational profitability and protected territory protections.
Score breakdown · what drove the 42 / 100 rating
- 01HIGHMultiple litigation disclosures involving franchisor and affiliates across multiple states (Maryland, NY, Virginia) covering contract breaches, misrepresentations, and regulatory violations—suggests systemic compliance issues
- 02MEDNo Item 19 (Financial Performance Representations) disclosed—prevents validation of the $813,125 average revenue and $190,698 net income claims; franchisees cannot independently verify earnings potential
- 03HIGHUnit growth of only 8.5% YoY is modest for a mature brand; combined with litigation history, suggests market saturation or franchisee dissatisfaction limiting expansion
- 04MEDHigh investment ceiling ($725,450) relative to disclosed net income ($190,698) creates extended ROI timeline (3.8+ years) with elevated financial risk if performance underperforms
- 05HIGHFranchisor's affiliate network (Kahala parent company) involved in multiple litigations across Famous Dave's, Papa Murphy's, and other brands—indicates potential systemic management/governance problems at parent level
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
38 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Wetzel’s Pretzels · FDD (2026) PDF