Pretzelmaker Franchise Costs, Fees & FDD

Year Business Began: 1991

Franchising Since: 1992

Headquarters: Beverly Hills, California

Estimated Number of Units: 195

Franchise Description: PM Franchising, LLC is the franchisor. The parent company is FAT Brands, Inc. Franchisees will establish and operate a single retail restaurant that offer soft pretzels, pretzel toppings, beverages and other food products under the “Pretzelmaker” mark. The franchisor offers two types of stores: (a) traditional stores; and (b) non-traditional stores.
Training Overview: The training program is 3 to 8 days in duration. The length of the training program is approximate and is dependent on the experience and progress made by trainees during training. Franchisees (or the owner, if the franchisee is a business entity) must complete the initial training program to the franchisor’s satisfaction. The franchisor will provide franchisees with pre-opening and post-opening supervision and assistance as it deems advisable based on the franchisee’s opening plan, subject (as to timing) to scheduling needs and availability of personnel. The franchisor will provide, as it deems appropriate, additional training for franchisees or their manager, operating partner, assistant managers, shift leaders or other employees. Franchisees or their employees must attend any additional training programs the franchisor believes is necessary.

Territory Granted: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. The franchise is for the specific site that the franchisor approves. Franchisees must locate an acceptable site within the non-exclusive site selection area that the franchisor specifies. If franchisees are in full compliance with the Franchise Agreement, and subject to the terms of the Franchise Agreement, they may operate temporary outlets for short-term periods at special events away from the site, such as fairs, sporting events, conventions, etc.

Obligations and Restrictions: Franchisees do not have to personally supervise their restaurant, however, if they (or their principal approved by the franchisor) do not personally supervise the restaurant, a manager or one of their assistant managers or shift leaders who has successfully completed the training program must directly supervise the restaurant “on premises.” The manager must assume responsibility for the day-to-day operation of the restaurant, oversight of the preparation of food products, and supervision of personnel and accounting and must spend at least 40 hours per week overseeing the operation of the restaurant. Franchisees may offer for sale in the restaurant only the products and services that the franchisor has approved in writing. Franchisees must offer all items that the franchisor designates as mandatory.

Term of Agreement and Renewal: The length of the initial franchise term is 15 years. Two 10-year renewals are available if franchisees are in good standing.

Financial Assistance: The franchisor does not offer direct or indirect financing. Franchisees may not borrow more than 75% of the cost of constructing, equipping, supplying and operating the restaurant. If franchisees are a corporation or other entity, they or their owners must contribute as equity at least 25% of the cost of constructing, equipping, supplying and operating the restaurant to the franchise. The franchisor may waive this requirement if the franchisee owns more than one restaurant.

Estimated Initial Investment

Name of Fee	Low	High
Franchise Fee	$15,000	$25,000
Grand Opening Marketing	$3,000	$5,000
Travel and Living Expenses While Training	$1,000	$5,000
Mixes Ingredients	$5,000	$8,000
Other Opening Inventory	$5,700	$11,000
Architectural Fees	$10,000	$12,000
Furniture, Fixtures, Equipment and Décor	$105,000	$131,000
Signs	$8,500	$30,000
Prepaid Rent and Security Deposit	$2,500	$5,000
Leasehold Improvements	$90,000	$300,000
Utility Deposits	$2,200	$3,000
Professional Fees	$2,000	$6,000
Point of Sale Systems (POS) and Related Technology	$7,600	$14,000
Business Licenses, Permits, etc. (for first 6 months)	$1,500	$2,500
Insurance (3 months)	$2,500	$3,500
Additional Funds (3 months)	$8,000	$12,000
ESTIMATED TOTAL	$269,500	$573,000

Other Fees

Type of Fee	Amount
Royalty	7% of total net sales; interest on any overdue amount of 1.5% per month and late fee of $25 per week.
National Advertising Fund	Currently 2% of total net sales.
Local Advertising	Currently 2% of total net sales.
Brand Technology System Support Services	Currently, $840 - $1,500 per year for mandatory services plus up to $3,250 per year for optional services.
Additional Training	Franchisees must reimburse the franchisor for its costs of training, up to a maximum of $1,500 per week for each individual.
Reimbursement for Rescheduled Training Expenses	Franchisees must reimburse the franchisor for its additional travel expenses and wages resulting from changing the travel arrangements of its representatives scheduled to provide initial training.
Reimbursement for Pre-Opening and Post-Opening Assistance	Franchisees must reimburse the franchisor for travel expenses, including airfare, hotel, rental car and its then current per-diem charge per person (currently $100 per day per person) for its personnel who provide pre-opening and post-opening assistance. Franchisees must also reimburse the franchisor for its direct and indirect wages and other labor costs and expenses for its personnel who provide pre-opening and post-opening assistance.
60 Day Extension Fee	$5,000
Relocation Charge	$2,000
Transfer	$15,000
Transfer fee for Satellite Restaurant	$2,000
Audit	Cost of audit plus interest on unpaid amount of 1.5% interest per month and $25 per week.
Indemnification	Varies.
Reimbursement of Cost of Insurance	The franchisor’s cost to procure insurance and a reasonable fee to cover its related expenses.
Product, Service, Supplier and Service Provider Review	The franchisor’s reasonable cost of inspecting the supplier, testing the proposed product, or evaluating the service provider or proposed service, including personnel and travel costs; this cost will not exceed $5,000.
Unapproved Product/Supplier Fee	$500 per day.
Damages, Costs and Expenses, including Attorneys’ Fees	Amounts the franchisor incurred.
Sales or Similar Taxes	Sales, gross receipts and similar taxes imposed on the franchisor because of payments franchisees make.
Renewal Fee	40% of the then-current initial fee.
Renewal Fee for Satellite Restaurant	$2,500
Securities/ Partnership Interests in Franchisee Offering	$10,000 or the franchisor’s reasonable costs and expenses to review offering documents, whichever is greater.
Continuing Inventory	Varies based on customer demand and kind of location the franchisor is operating.
Convention or Meeting Attendance	As the franchisor determines based on its costs of holding the convention or meeting.
Remedial Expenses	The franchisor’s reasonable expenses incurred in correcting the franchisee’s operational deficiencies; this cost will not exceed $10,000 per deficiency.
Liquidated Damages	See FDD.
Test Products	$50 - $500
Architect Approval	$1,500 (Only payable if the franchisee chooses to use an architect that is not on the approved vendor list.)
Plan and Design Review	The franchisor’s costs and expenses to review, and have an architect acceptable to it, review the designs and plans for the restaurant, not to exceed $3,000. (Only payable if the franchisee chooses to use an architect that is not on the approved vendor list.)
Lease Review Fee	The franchisor’s costs and expenses to review and accept the franchisee’s lease, not to exceed $2,500.
Fines	The then-current fines set forth in the manuals.
Management Fee	See FDD.

The above information has been compiled from the FDD of Pretzelmaker. Year of FDD: 2025.
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