Pretzelmaker Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$109,000

-

$386,000

LOCATIONS

144

Emily

Updated

April 11, 2024

Is

Pretzelmaker

a franchise?

Yes,
Pretzelmaker
currently
accepts
franchise
applications

Pretzelmaker is a well-known restaurant chain based in Georgia, known for serving hand-rolled pretzels, cold beverages, and smoothies. It operates as a subsidiary of FAT brands and was founded in 1991 by Jeffery Tripp.

The menu at Pretzelmaker features a delightful array of offerings, including soft pretzel bites, mini pretzel dogs, an assortment of dipping sauces, blended drinks, refreshing lemonades, and mouthwatering mozzarella stuffed bites.

The very first Pretzelmaker store opened its doors in 1991 in Trumbull, Connecticut, initially incorporated under the name Mr. Pretzel Inc. As its popularity grew, it began franchising in 1992, eventually adopting the names Pretzel Time and, later, Pretzelmaker.

Today, this quick-service restaurant boasts a presence with 280 stores across the United States and various global locations, including Canada, Mexico, Saudi Arabia, and Guam.

How many

Pretzelmaker

franchises

are there?

In 2022, there were
144
outlets in
the United
States, of which
144
are franchises, and
0
are corporate-owned.

What are the

Pretzelmaker

franchise

fees?

Advertising fee

4.00%

Initial Franchise Fee ($25,000 to $30,000)

The initial franchise fee varies depending on the type of store you are opening. Traditional stores have a fee of $30,000, while non-traditional stores (like those in airports or stadiums) have a fee of $25,000.

Royalty Fee (6% of Net Sales)

Franchisees are required to pay a royalty fee equal to 6% of their Net Sales. This fee is in consideration of the ongoing right to use the Pretzelmaker Marks and the System. "Net Sales" encompasses all revenue from the sale of products and services related to the franchisee's business activities under the agreement.

Advertising Fee (2% of Net Sales + 1.5% Local Marketing Requirement)

Franchisees must contribute 2% of their Net Sales to the Pretzelmaker Brand and Marketing Fund. This fund is used for creating and disseminating advertising and promotional materials, among other marketing-related activities. Additionally, franchisees are required to spend a minimum amount on local marketing, which varies based on the location and specific circumstances of the store.

Transfer Fee ($2,000 to $5,000 per Store)

In the event of a transfer of ownership or control of the store, a transfer fee is applicable. The fee is $2,000 for administrative costs in reviewing the proposal for a partial ownership transfer. For a complete business transfer or a change of control in an entity, the fee is $5,000 per store, with a cap of $75,000 for transfers of more than 5 stores or transfers to an existing franchisee.

Successor Fee ($7,500)

Upon executing a successor franchise agreement, franchisees are required to pay a successor fee of $7,500.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Pretzelmaker

franchise?

It costs between
$109,000
and
$386,000
to start a
Pretzelmaker
franchise.

Pretzelmaker offers two distinct franchise options: Traditional Restaurant and the Non-traditional Restaurant. Each comes with its own set of initial investment requirements. Let's delve into the details of these investment breakdowns to provide a clearer picture for potential franchisees.

Traditional Restaurant  Investment:

The Single Store option is the more traditional franchise model, where you operate a standalone store. The estimated initial investment for this option ranges from $200,200 to $322,000. This cost includes expenses such as the franchise fee, dough ingredients, architectural fees, and additional funds for the first three months of operation.

Non-traditional Restaurant Investment:

For those looking to set up a smaller operation within a shopping center or venue, the Satellite Location is an ideal choice. The estimated initial investment for this option ranges from $96,000 to $193,394.

This model includes costs for the kiosk structure, pretzel ingredients, furniture, fixtures, equipment, and decor. Additionally, it accounts for the computer system and additional funds for the first three months.

Both franchise options come with their own set of advantages, and the choice largely depends on the franchisee's budget, location preference, and business goals. It's crucial to factor in all these costs when planning your Pretzelmaker franchise journey.

For a detailed breakdown of the costs associated with each franchise option, refer to the tables provided below.

Investment Breakdown:

Type of Expenditure Amount
Franchise Fee $25,000
Grand Opening Marketing $3,000 - $5,000
Travel and Living Expenses While Training $1,000 - $3,000
Mixes Ingredients Other Opening Inventory $5,000 - $8,000
Architectural Fees $8,000 - $12,000
Furniture, fixtures, equipment and decor $91,000 - $121,000
Signs $4,500 - $9,500
Leasehold improvements $105,000 - $145,000
Utility deposits $2,200 - $3,000
Professional Fees $1,000 - $6,000
Point of Sale Systems (POS) and related technology $7,600 - $14,000
Insurance (3 months) $2,500 - $3,500
Additional Funds (3 Months) $8,000 - $12,000
Total $273,500 - $385,500

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Pretzelmaker

provide

training

to its

franchisees?

Yes,
Pretzelmaker
provides
training

If you've ever considered joining the Pretzelmaker family as a franchisee, here's a closer look at the training and support they offer.

Before the doors of your Pretzelmaker store even open, the brand ensures you're on the right track. Choosing the right location can make all the difference, and Pretzelmaker provides guidelines and counseling, including on-site evaluations, to help you find the perfect spot.

Pretzelmaker believes in equipping its franchisees with the knowledge and skills they need. This covers the system, brand standards, policies, and procedures. It's essential for both the franchisee and the person responsible for daily operations.

Pretzelmaker periodically offers advanced training programs, ensuring franchisees and their teams are always up-to-date. To ensure a smooth start, Pretzelmaker provides on-site assistance for at least two days when you're ready to launch.

Does

Pretzelmaker

provides

territory

protection?

Franchisees will not receive exclusive rights to the Development Area. While they can operate within a specified Development Area, there are no guarantees of exclusivity.

If the Development Area is defined as exclusive in Exhibit A, then as long as the franchisee operates the Stores according to the provided schedule and maintains the minimum number of Stores as required, the franchisor will not operate or license any other person to operate a Store under the Marks and the System within the Development Area.

However, it's essential to understand that outside of these conditions, the franchisor and its affiliates can conduct any business, and the franchisee's rights within the Development Area are not absolute.

Can a

Pretzelmaker

franchise

be run as

a passive

investment?

Franchisees are expected to give their full-time and best efforts to the effective operation of the store. Moreover, each store must have at least one Manager.

If the franchisee is an individual, they can either act as the Manager or appoint someone else for this role. If the franchisee is an entity, they must designate a Manager and also appoint an individual owner as the "Operating Principal."

This Operating Principal should have the authority over all business decisions related to the store and must have the ability to bind the franchisee in all dealings with Pretzelmaker.

The Operating Principal can also act as the Manager, unless Pretzelmaker believes they lack the necessary experience. It's crucial that the store, at all times when open for business, is under the personal, on-premises supervision of the franchisee, the Operating Principal, or a Manager.

Related Posts