How much does it cost to open a Philly Pretzel Factory franchise?

The total initial investment for a Philly Pretzel Factory franchise ranges from $169,935 to $264,317. This includes the franchise fee of $35,000, buildout costs, equipment, and initial working capital.

What are the ongoing fees for a Philly Pretzel Factory franchise?

Philly Pretzel Factory franchisees pay a 6.0% royalty fee and a 2.0% advertising/marketing fund contribution. These are typically calculated as a percentage of gross revenue.

How much money can you make with a Philly Pretzel Factory franchise?

Based on Item 19 financial performance data, the median Philly Pretzel Factory franchise generates $410,479 in annual revenue. Estimated owner profit is approximately $127,248.

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Bakery

Philly Pretzel Factory Franchise Cost Breakdown

Complete investment analysis based on official FDD data

Total Investment

$169,935 – $264,317

Franchise Fee

$35,000

Royalty Rate

6.0%

Initial Investment Range

Low: $169,935 High: $264,317

The total initial investment to open a Philly Pretzel Factory franchise ranges from $169,935 to $264,317, as disclosed in their Franchise Disclosure Document. This includes the one-time franchise fee of $35,000.

Midpoint estimate: $217,126

Franchise Fee

$35,000

One-time initial fee

The Philly Pretzel Factory franchise fee is a one-time upfront payment made to the franchisor when you sign the franchise agreement. This fee grants you the right to operate under the Philly Pretzel Factory brand and is included in the total initial investment range above.

Ongoing Fees

Royalty Fee

6.0%

of gross revenue

Ad/Marketing Fund

2.0%

of gross revenue

Total Ongoing Fee Burden: 8.0% of gross revenue

Combined royalty and advertising fund contributions before any other fees.

Other Ongoing Fees

Fee Type	Rate	Type	Notes
Royalty	6.0	PCT	Deducted weekly via Electronic Funds Transfer System (EFT).
System Wide Brand Fund	2.0	PCT	Deducted weekly via EFT. Can increase to 4% of Gross Sales.
Local Advertising	3.0	PCT	Minimum monthly expenditure, as incurred. Credit for Cooperative contributions against this requirement.
POS System Fees And transaction fees	109.0	USD	$109 per month for credit/debit card transaction volume of $10,000 or less; fee will not exceed 4.5% of total processing volume if transactions exceed $10,000. Card transaction fee is currently $.10 per transaction. As incurred.
Collection Costs, Attorneys’ Fees and Interest	18.0	PCT	Fees and Costs Incurred/Interest at 18% per annum or Highest Lawful Interest Rate for Commercial Transactions. As incurred.
Audit of Books and Records	2000.0	USD	Ranges from $2,000 to $5,000. As required.
Financial Records and Reports	N/A	OTHER	Annually.
Taxes on Payments to Us	N/A	OTHER	When imposed by taxing authority.
Transfer Fee	0.5	PCT	Upon transfer.
Renewal Fee	0.5	PCT	Upon renewal.
Additional Training	N/A	USD	Currently $0 per additional person. At time of additional training. Franchisor reserves right to increase fee.
Indemnification	N/A	OTHER	When incurred.
Supplier Approval/Testing Costs	3000.0	USD	Ranges from $3,000 to $5,000. When incurred.
Intranet	N/A	USD	Currently $0. When incurred. Franchisor reserves right to charge fees in the future.
Additional Support	1000.0	USD	$1,000 per person per visit up to 5 days, plus any travel or accommodation expenses. When incurred. Franchisor reserves right to increase fee.
Year Seven Remodeling and Refurbishment Expenses	30000.0	USD	Not to exceed $30,000. During the 7th year of the term of the Franchise Agreement.
Rent for Non-Traditional Location	1250.0	USD	Ranges between $1,250 and $3,500 and includes electric, water and trash removal. Monthly.
Failure to Commence Operations Fee – Non-Traditional Location	10000.0	USD	Generally, $10,000 plus an additional $300 a day for each day which the Leased Premises remains unopened. Payable on Demand.
Failure to maintain premises – Non-Traditional Location	N/A	OTHER	Payable on Demand.
Lien Removal – Store-in-Store Location	N/A	OTHER	Payable on Demand.
Interest on Late rent Payments – Non-Traditional Location	5.0	PCT	5% per annum or maximum amount allowed by law on any rent pay unpaid when due. Payable on Demand.
Additional Non-Traditional imposed fees	N/A	OTHER	As incurred, on demand or annually.
Hold Over Rent – Non-Traditional Location	1.5	MULTIPLE	150% of then-current monthly rent. Weekly.
Relocation Fee	N/A	USD	Currently $0. As incurred.
Annual Conference	1500.0	USD	Expenses of you and your employees’ transportation, lodging, meals, and salaries during the Annual Conference. $1,500 if you fail to attend without prior written consent. As incurred.
Fee for an additional location within your Territory	N/A	USD	Currently $0. As incurred.
Technology Fee	N/A	OTHER	As incurred. Franchisor reserves the right to require payment and change the amount.

What You Get

Financial Performance (Item 19)

Median Revenue

$410,479

per year, per location

Mean Revenue

$437,021

per year, per location

Profitability Estimate

Estimated Owner Profit

$127,248

per year

Profit Margin

31.0%

of revenue

Estimation method: disclosed+benchmark

Estimated ROI (Simple Payback): 1.7 years

Based on midpoint investment of $217,126 and estimated annual owner profit of $127,248.

Unit Growth & Failure Rate

Avg. Annual Closure Rate

8.6%

Elevated risk — above industry average

Net Unit Growth

-8 units

From 2019 to 2021

Unit Activity History

Year	Start	Opened	Closed	Transfers	End
2019	159	+14	-21	—	152
2020	152	+10	-12	—	150
2021	150	+8	-7	—	151

Is a Philly Pretzel Factory Franchise Worth It?

Based on the FDD data, here is a data-driven snapshot of the Philly Pretzel Factory franchise opportunity:

Overall Score

55/100

Moderate opportunity

Est. Payback Period

1.7 yrs

Fast payback

Risk Level

High

8.6% annual closure rate

Philly Pretzel Factory shows a moderate score across our evaluation criteria. Careful due diligence is recommended. With median unit revenue of $410,479 and a combined fee burden of 8.0% of gross revenue, prospective franchisees should model their own financial projections carefully. For a complete analysis including risk factors, deal-breaker flags, and detailed financial modeling, see the full report.