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FDD Talk: How Much Does a Pretzelmaker Franchise Make (Average Revenues and/or Profits)?

Last updated on April 27, 2022 by Franchise Chatter Leave a Comment
in FDD Talk: Food Franchises, Franchise Earnings, Pretzel Franchise



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In this FDD Talk post, you’ll learn the following:

  • Section I – Background information on the Pretzelmaker franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Pretzelmaker franchise, based on Item 7 of the company’s 2021 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Pretzelmaker franchise, based on Items 5 and 6 of the company’s 2021 FDD
  • Section IV – Number of franchised and company-owned Pretzelmaker outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
  • Section V – Presentation and analysis of Pretzelmaker’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:
  • 2020 average, median, highest, and lowest net sales by calendar month for the 2 franchised traditional Pretzelmaker stores that were continuously open during the period January 1, 2020 through December 31, 2020
  • 2020 average, median, highest, and lowest net sales by calendar month for the 156 franchised traditional Pretzelmaker stores that were in operation as of December 31, 2020

Section I – Background Information

15 Things You Need to Know About the Pretzelmaker Franchise

Parent Company Acquired by FAT Brands

1.  In late June 2021, FAT Brands, Inc. announced that it has agreed to acquire Global Franchise Group, which franchises and operates a portfolio of five quick service restaurant concepts, Pretzelmaker, Round Table Pizza, Great American Cookies, Hot Dog on a Stick, and Marble Slab Creamery, from Serruya Private Equity, Inc. and Lion Capital LLP, for $442.5 million in cash and stock.


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2.  The cash portion of the purchase price will be funded from the issuance of a new series of notes and cash on hand. FAT Brands will also issue to the sellers $25 million in common stock and $67.5 million in Series B cumulative preferred stock. The transaction was expected to close by the end of July 2021, subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

3.  With the acquisition of GFG, FAT Brands will have more than 2,000 franchised and company-owned restaurants around the world with combined annual system-wide sales of approximately $1.4 billion. Approximately 87% of GFG’s stores are located in the United States.

4.  Based on current projections and assumptions, including realization of expected synergies and return to pre-COVID restaurant sales, the acquisition is expected to eventually increase annual EBITDA by approximately $40 million to approximately $55-$60 million.

5.  Andy Wiederhorn, president and CEO of FAT Brands, said, “This acquisition is a key strategic milestone for FAT Brands. We have been very acquisitive in recent years, seeking to add strong and growing restaurant brands to our portfolio. Now that the economy is emerging from COVID-19 and restaurants are rapidly recovering, we are pleased to have reached this agreement to incorporate a powerhouse restaurant franchising group with the support of Serruya Private Equity and Lion Capital. The five new restaurant concepts have been very resilient coming out of the pandemic and will complement our existing brands. Furthermore, we will acquire GFG’s manufacturing operations, which will provide greater efficiencies and incremental revenue opportunities to our company.”

6.  Michael Serruya, managing director at Serruya Private Equity and chairman of the board of GFG, said, “This is truly a transformative deal for both FAT Brands and GFG. Andy has an exciting vision for FAT Brands and through his recent acquisitions, he has been able to create brand synergies within the portfolio while maintaining an asset-light business model. I look forward to our continued involvement with GFG through our company’s support of FAT Brands from an equity and strategic perspective.”

America's Most Lucrative Franchises of the Year

7.  Lyndon Lea, managing partner of Lion Capital, added, “We are incredibly thankful to the management team of GFG, for their incessant focus on building a great business and culture, while successfully navigating an unprecedented period amidst COVID-19. We wish FAT Brands and GFG the best in the next phase of their journey.”

Celebrates 30th Anniversary with 30 Cent Lemonade

8.  In mid-February 2022, Pretzelmaker celebrated its 30th anniversary with 30 cent lemonade. From February 21 through February 23, customers who purchased an order of regular Pretzel Bites in-store or online with the code 30YEARS could also purchase a 30 cent lemonade. Guests could choose an Original Lemonade, Strawberry Lemonade, or Raspberry Lemonade.

9.  Since 1991, Pretzelmaker has been rolling out fresh-baked, handcrafted pretzels and fresh-squeezed, all-natural lemonade around the globe. Known for inventing Pretzel Bites and the Pretzel Dog, the chain is committed to the freshest products and ingredients.

10.  Annica Conrad, chief marketing officer of FAT Brands’ quick-service division, said, “We are so grateful for the support our guests have shown us over the last 30 years and we thought it was only fitting to roll out a special thank you offer that pairs perfectly together – our salted Pretzel Bites and a fresh-squeezed lemonade. Since our inception, we have been focused on providing an unparalleled guest experience centered around product innovation. From the Original Salted Pretzel Bites to the next-level flavor combinations we offer as limited time specials, we will continue to add new twists to our menu in the years to come.”


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Company History

11.  Pretzelmaker was founded in 1991 by Jeffery Tripp, who dreamed of selling fresh-baked soft pretzels. The first Pretzelmaker location was a success and Tripp started franchising the concept in 1992. The brand grew quickly and sold 100 franchises within a few years.

12.  In 1995, when there were 40 stores in operation, Don Cox, Marc Geman, Tony Joseph, Dale Fowler, and a small group of investors acquired Pretzelmaker. The new leadership pushed aggressive expansion and within three years, they grew Pretzelmaker to 288 stores. During this time, Pretzelmaker opened international stores in Canada, South Korea, Thailand, Hong Kong, and Singapore.

13.  In 1999, Mrs. Fields Famous Brands bought Pretzelmaker. A few years earlier, Mrs. Fields had acquired Pretzel Time and another soft pretzel chain called Hot Sam. In 2005, Mrs. Fields merged Hot Sam with Pretzelmaker. Two years later, Mrs. Fields sold all of its soft pretzel brands to NexCen.

14.  Then, in 2010, Global Franchise Group (GFG) purchased NexCen Franchise Management, including its pretzel franchises. GFG merged Pretzel Time and Pretzelmaker into one brand as Pretzelmaker. In 2021, GFG and all of its subsidiaries were acquired by FAT Brands, owners of Fatburger and Johnny Rockets.

Entrepreneur’s Franchise 500

15.  Pretzelmaker did not rank on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

  • Detailed estimates of Pretzelmaker franchise costs, based on Item 7 of the company’s 2021 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Detailed information on Pretzelmaker’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

  • Outlets at the Start of the Year:  207
  • Outlets at the End of the Year:  193
  • Net Change:  -14

2019

  • Outlets at the Start of the Year:  193
  • Outlets at the End of the Year:  180
  • Net Change:  -13

2020

  • Outlets at the Start of the Year:  180
  • Outlets at the End of the Year:  161
  • Net Change:  -19

Company-Owned

2018

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2019

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2020

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

  • As of December 31, 2020, there were 161 Franchised Stores in operation. Of these locations, 156 were Traditional Stores and 5 were Non-Traditional Stores. The financial performance information presented in this Item 19 reflects financial performance information for all of the 156 Traditional Stores (the “Traditional Stores”) for the period January 1, 2020 through December 31, 2020 (“2020 Calendar Year”).

Part 1 – Average and Median Monthly Net Sales Generated by All Continuously Open Franchised Traditional Stores (2 Stores) During the 2020 Calendar Year

January (4 Weeks)

  • 2020 Average Monthly Net Sales:  $21,809.35
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $21,809.35
  • 2020 Lowest Monthly Net Sales:  $2,935.35
  • 2020 Highest Monthly Net Sales:  $40,683.35

February (4 Weeks)

  • 2020 Average Monthly Net Sales:  $21,855.08
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $21,855.08
  • 2020 Lowest Monthly Net Sales:  $2,753.03
  • 2020 Highest Monthly Net Sales:  $40,957.12

March (5 Weeks)

  • 2020 Average Monthly Net Sales:  $22,612.32
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $22,612.32
  • 2020 Lowest Monthly Net Sales:  $3,086.34
  • 2020 Highest Monthly Net Sales:  $42,138.29

April (4 Weeks)

  • 2020 Average Monthly Net Sales:  $4,851.12
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $4,851.12
  • 2020 Lowest Monthly Net Sales:  $949.20
  • 2020 Highest Monthly Net Sales:  $8,753.04

May (4 Weeks)

  • 2020 Average Monthly Net Sales:  $12,027.74
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $12,027.74
  • 2020 Lowest Monthly Net Sales:  $2,835.74
  • 2020 Highest Monthly Net Sales:  $21,219.73

June (5 Weeks)

  • 2020 Average Monthly Net Sales:  $26,944.64
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $26,944.64
  • 2020 Lowest Monthly Net Sales:  $6,009.98
  • 2020 Highest Monthly Net Sales:  $47,879.29

July (4 Weeks)

  • 2020 Average Monthly Net Sales:  $21,136.79
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $21,136.79
  • 2020 Lowest Monthly Net Sales:  $5,048.70
  • 2020 Highest Monthly Net Sales:  $37,224.87

August (4 Weeks)

  • 2020 Average Monthly Net Sales:  $20,593.12
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $20,593.12
  • 2020 Lowest Monthly Net Sales:  $4,520.08
  • 2020 Highest Monthly Net Sales:  $36,666.15

September (5 Weeks)

  • 2020 Average Monthly Net Sales:  $28,607.23
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $28,607.23
  • 2020 Lowest Monthly Net Sales:  $6,158.80
  • 2020 Highest Monthly Net Sales:  $51,055.65

October (4 Weeks)

  • 2020 Average Monthly Net Sales:  $22,081.81
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $22,081.81
  • 2020 Lowest Monthly Net Sales:  $4,556.38
  • 2020 Highest Monthly Net Sales:  $39,607.23

November (4 Weeks)

  • 2020 Average Monthly Net Sales:  $20,187.70
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $20,187.70
  • 2020 Lowest Monthly Net Sales:  $4,022.89
  • 2020 Highest Monthly Net Sales:  $36,352.50

December (5 Weeks)

  • 2020 Average Monthly Net Sales:  $34,887.70
  • Number and Percentage At or Above Average:  1/50%
  • 2020 Median Monthly Net Sales:  $34,887.70
  • 2020 Lowest Monthly Net Sales:  $6,650.65
  • 2020 Highest Monthly Net Sales:  $63,124.74

Full Year 2020

  • 2020 Sum of Average Monthly Net Sales:  $257,594.60

Part 2 – Average and Median Monthly Net Sales Generated by All Franchised Traditional Stores (156 Stores) During the 2020 Calendar Year

January (4 Weeks)

  • 2020 Average Monthly Net Sales:  $23,979.93
  • Number and Percentage At or Above Average:  71/45.5%
  • 2020 Median Monthly Net Sales:  $22,070.91
  • 2020 Lowest Monthly Net Sales:  $273.91
  • 2020 Highest Monthly Net Sales:  $55,912.18

February (4 Weeks)

  • 2020 Average Monthly Net Sales:  $22,827.23
  • Number and Percentage At or Above Average:  68/43.6%
  • 2020 Median Monthly Net Sales:  $21,209.95
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $58,772.25

March (5 Weeks)

  • 2020 Average Monthly Net Sales:  $20,367.51
  • Number and Percentage At or Above Average:  73/46.8%
  • 2020 Median Monthly Net Sales:  $18,981.23
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $50,684.10

April (4 Weeks)

  • 2020 Average Monthly Net Sales:  $87.13
  • Number and Percentage At or Above Average:  9/5.8%
  • 2020 Median Monthly Net Sales:  –
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $8,753.04

May (4 Weeks)

  • 2020 Average Monthly Net Sales:  $4,040.28
  • Number and Percentage At or Above Average:  53/34%
  • 2020 Median Monthly Net Sales:  $1,554.77
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $24,353.35

June (5 Weeks)

  • 2020 Average Monthly Net Sales:  $18,792.55
  • Number and Percentage At or Above Average:  70/44.9%
  • 2020 Median Monthly Net Sales:  $16,301.96
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $63,627.14

July (4 Weeks)

  • 2020 Average Monthly Net Sales:  $16,540.57
  • Number and Percentage At or Above Average:  71/45.5%
  • 2020 Median Monthly Net Sales:  $15,703.26
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $46,944.09

August (4 Weeks)

  • 2020 Average Monthly Net Sales:  $18,916.15
  • Number and Percentage At or Above Average:  72/46.2%
  • 2020 Median Monthly Net Sales:  $17,838.56
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $57,544.69

September (5 Weeks)

  • 2020 Average Monthly Net Sales:  $23,374.67
  • Number and Percentage At or Above Average:  70/44.9%
  • 2020 Median Monthly Net Sales:  $22,350.44
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $63,020.77

October (4 Weeks)

  • 2020 Average Monthly Net Sales:  $19,390.68
  • Number and Percentage At or Above Average:  74/47.4%
  • 2020 Median Monthly Net Sales:  $18,604.18
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $47,663.62

November (4 Weeks)

  • 2020 Average Monthly Net Sales:  $19,581.19
  • Number and Percentage At or Above Average:  71/45.5%
  • 2020 Median Monthly Net Sales:  $17,647.87
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $46,826.66

December (5 Weeks)

  • 2020 Average Monthly Net Sales:  $38,537.20
  • Number and Percentage At or Above Average:  74/47.4%
  • 2020 Median Monthly Net Sales:  $37,486.95
  • 2020 Lowest Monthly Net Sales:  $0
  • 2020 Highest Monthly Net Sales:  $99,429.37

Full Year 2020

  • 2020 Sum of Average Monthly Net Sales:  $226,435.09
  • The above table reflects the average monthly Net Sales information for the 2020 Calendar Year for the 156 Traditional Stores.
  • “Net Sales” means all revenue from the sale of all products and services and all other income of every kind related to the franchised business activities under the Franchise Agreement, whether evidenced by cash, credit, check, gift certificate, gift cards, script, or other property or services and whether collected or not.
  • Net Sales does not include (i) promotional allowances or rebates paid to franchisees for purchases of products or supplies, or (ii) any sales or other taxes that franchisees collect from customers and pay directly to the appropriate taxing authority.
  • Two of the 156 Traditional Stores were open and in continuous operation for the entire 2020 Calendar Year. The first part of the above table reflects the Net Sales information for the 2020 Calendar Year for these 2 Traditional Stores.
  • The second part of the above table reflects Net Sales information for the 2020 Calendar Year for all of the 156 Traditional Stores (including the 2 continuously open Traditional Stores).
  • As stated above, 5 of the 161 Franchised Stores that were in operation as of December 31, 2020 were excluded from the performance information presented in the above table because these 5 locations were Non-Traditional Stores.
  • The data displayed in the above table was obtained from Net Sales reports submitted to Pretzelmaker by the Traditional Locations. The results presented in this Item 19 were not audited or separately verified. Pretzelmaker did not use any reports that were incomplete or for which the information was presented in a manner that prohibited Pretzelmaker from applying the information to one of the stated categories.
  • Some stores have sold this amount. Your individual results may differ. This is no assurance you will sell as much.

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