Philly Pretzel
Philly Pretzel Factory franchises offer traditional Philadelphia-style soft pretzels and other snacks in various formats. Known for fresh-baked pretzels, this franchise operates in the quick-service food industry.
Philly Pretzel franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operating a single traditional full production Philly Pretzel Factory ranges from $325,024 to $495,724. For a single traditional oven-ready Philly Pretzel Factory, the range is from $175,478 to $266,541. The cost for a single oven-ready Philly Pretzel Factory in a Non-Traditional location is $149,531 to $181,510. [p.1]
What is the initial franchise fee?
The initial franchise fee for your first territory is $40,000 and $25,000 for each additional territory you purchase [p.11]. This fee is payable in full upon signing the Franchise Agreement and is non-refundable [p.147].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is calculated as 6% of gross sales, due weekly [p.15], while the marketing fee is 2% of gross sales, also due weekly [p.100]. These fees are recognized as revenue at a point in time since they are based on sales and become receivable from the franchisee when earned [p.100, p.124].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in the excerpts. However, you have the right to renew your Franchise Agreement by paying a renewal fee equal to half of the current initial franchise fee when you wish to renew [p.17].
Can I sell or transfer my franchise, and what does that require?
You can sell or transfer your franchise, but it requires payment of a transfer fee equal to half of the current initial franchise fee, unless you are assigning your Franchise Agreement to a corporation or limited liability company wholly owned by you for the sole purpose of operating the Factory. This is subject to the franchisor's approval based on good cause [p.5]. Unauthorized transfers without permission can result in penalties as specified in the agreement [p.169].
On what grounds can the franchisor terminate the agreement?
According to [p.5], the franchisor can terminate the franchise agreement prior to its expiration if there is failure by the franchisee to comply with any lawful provision of the franchise agreement and such failure is not cured within a reasonable time, which cannot exceed 30 days after written notice. This isn't specified in the excerpts for other grounds beyond good cause.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific net worth or liquid capital requirements for franchisees to qualify. However, it does state that you must have adequate financial resources and capital to meet performance obligations [p.165], and you are required to maintain sufficient working capital to operate the business properly [p.159].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, company-owned outlets, or competitive brands controlled by the franchisor [p.40]. However, you are guaranteed a protected territory where you will operate your single Factory [p.39], though relocation might be required under certain circumstances.
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program lasting five consecutive days at their training center, with additional on-site training at your Factory location for three to five days. This includes classroom and on-the-job training covering various aspects of operating a Philly Pretzel Factory. The training is conducted by experienced personnel such as Martin Ferrill and Chris Dowling. Ongoing support includes the possibility of additional training programs or refresher courses, though these are not specified in detail [p.213, p.32, p.153].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 155 franchised Factories and 7 affiliate Factories open. The excerpts do not specify the number of closed or terminated outlets. [p.49]
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information for existing outlets upon request. However, they do not make any financial performance representations beyond what is included in the disclosure document, and they do not authorize their employees or representatives to make such representations either orally or in writing [p.57].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the approved products and services as specified by the franchisor. This includes seasonal items and private label products designated for sale by System franchisees [p.45]. You may not sell any other products without prior written authorization from the franchisor [p.157]. For supplies, you may have to buy or lease items from the franchisor or a limited group of suppliers that they designate, which might be more expensive than similar items available elsewhere [p.3].