Wetzel’s Pretzels Franchise Costs $61K – $838K (+ 2024 Profits)
Wetzel’s Pretzels, founded in 1994 by Rick Wetzel and Bill Phelps, has grown into a well-known franchise in the fast-food industry, specializing in fresh, hand-rolled pretzels. Headquartered in Pasadena, California, Wetzel’s Pretzels began franchising in 1996.
The franchise distinguishes itself by offering a fun and simple business model that serves a variety of pretzels, dips, and beverages, all made with high-quality ingredients. The brand’s focus on offering freshly made products in high-traffic areas like malls, airports, and entertainment venues has allowed it to cultivate a broad consumer base.
Wetzel’s Pretzels’ operations are designed to be efficient, requiring relatively low startup and operational costs compared to other food franchises. This efficiency, combined with their commitment to quality and customer service, has helped the brand secure a competitive edge in the snack food sector.
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Initial investment
Here’s what you can expect to spend to start a Wetzel's Pretzels franchise.
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $20,000 – $40,000 |
| Lease Review Fee | $3,500 – $7,000 |
| Business Premises | $5,000 – $25,000 |
| Leasehold Improvements | $50,000 – $400,000 |
| Food Preparation Equipment | $49,000 – $89,000 |
| Utility Deposits, Licenses, Permits | $500 – $5,000 |
| Insurance | $500 – $2,500 |
| Signs & Menu Boards | $5,000 – $16,000 |
| Digital Display Boards | $5,000 – $7,500 |
| POS System | $500 – $900 |
| Initial Inventory & Smallwares | $5,500 – $10,000 |
| Training Fee for Additional Trainee | $0 – $750 |
| Training Expenses | $1,000 – $2,500 |
| Grand Opening Advertising | $500 – $2,500 |
| Office Equipment & Supplies | $500 – $2,500 |
| Professional Fees | $1,000 – $3,100 |
| Architect Engineers & Const. Manager | $6,000 – $20,000 |
| Additional Funds-first 90 days | $25,000 – $55,500 |
| Total Estimated Initial Investment* | $179,000 – $690,000 |
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.
Franchise fees & Royalties
Here are the main ongoing fees the franchisor will ask you to pay going forward to run the franchise.
Initial Franchise Fee
The initial franchise fee for a Wetzel’s Pretzels franchise is between $30,000 and $40,000, payable as a lump sum at the signing of the franchise agreement.
Royalty Fee
Franchisees are required to pay a weekly royalty of 7% of Adjusted Gross Revenue.
Marketing/Advertising Fee
Franchisees must contribute to the advertising fund at a rate of 1% of Adjusted Gross Revenue weekly. For TWISTED BY WETZEL’S Bakeries, this contribution can be increased up to 5% at the franchisor’s discretion. Additionally, franchisees operating a TWISTED BY WETZEL’S Bakery may be required to spend a total of 5% of Adjusted Gross Revenue quarterly on local marketing activities and advertising fund contributions. The maximum combined expenditure for local marketing activities and advertising fund contributions will not exceed 5% of Adjusted Gross Revenue for that quarter.
Technology Fee
Technology fees are approximately $200, which may be charged monthly and subject to increase as necessary.
Lease or Rent Fee
Lease or rent fees are highly variable and depend on the location and terms negotiated. Specific figures are not provided, but lease review fees range from $3,500 to $7,000 depending on the lease’s complexity.
Transfer Fees
Transfer fees for a franchise vary, with a fee of $40,000 during the first twelve months, reducing to $20,000 thereafter. For non-traditional locations, the fee is $20,000 during the first twelve months, reducing to $10,000 thereafter.
Renewal Fees
Renewal fees are set at 50% of the then-current initial franchise fee for a renewal term of ten years. This applies proportionally to different franchise types, including Bakeries and Concession Trucks or Trailers.
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Franchise pros and cons
The Pros:
- Comprehensive training: The franchisor provides the franchisees with a simple and fun training program. The franchisees receive 40 hours of classroom or virtual training plus 40 hours of on-the-job training on the operations of running a successful restaurant. Also, it trains franchisees about grand opening marketing, staffing, and management.
- Easy operations: The brand operates on a simplified basic menu. It also requires a smaller employee headcount and convenient hours. This allows franchisees to concentrate on perfecting their customer service and the quality of their menu to attract customers and upsell to improve their profitability.
- Flexible location formats: The franchisor has a variety of franchise formats that offer franchisees flexibility on where to operate their restaurants. Franchisees can operate in strategic locations such as shopping malls, airports, theme parks, stadiums, and food trucks.
- Quality and innovative menu: Wetzel’s Pretzels offers premium pretzels made from scratch and freshly baked every 30 minutes using quality ingredients. Franchisees can stand out from their competitors by offering unique products. They also continue to introduce new flavors to offer customers diverse, healthy eating options.
- Exclusive territory protection: Wetzel’s Pretzels grants its franchisees the right to operate in an exclusive market location. As such, it does not allow other franchises to operate in the agreed-upon location.
- Absentee ownership: The Wetzel’s Pretzels franchise is a good option for investors looking for a passive investment opportunity. The brand does not require franchisees to be fully involved in the management of their restaurants.
- Accessible and skilled leadership: The brand’s leadership connects with their franchisees by mentoring and guiding them to compete with brands such as Applebee’s, IHOP, and Papa Murphy’s. Franchisees benefit from individualized support from top leadership at any time.
The Cons:
- Not a part-time business: The franchise does not provide a part-time business opportunity. The franchisees must be open full-time according to the parent company’s schedule.
- No financing: The brand does not offer franchise financing for trade fixtures, franchise fees, or ongoing costs.
- Competition: The brand faces stiff competition from other pretzel brands such as Auntie Anne’s and Pretzel Maker.
How to open a Wetzel’s Pretzels Franchise
Opening a Wetzel's Pretzels franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Wetzel's Pretzels franchise.
1: Initial Inquiry and Application
- Complete an Inquiry Form: Start by filling out an inquiry form on the Wetzel’s Pretzels franchising website to express your interest.
- Initial Contact: After submitting the form, the development team will reach out to you to discuss the opportunity further and get to know you better.
2: Apply and Qualify
- Phone Interview: Participate in a phone interview to explore opportunities, requirements, and to see if you’re a good fit for the franchise.
- Submit Detailed Information: If pre-qualified, you will be asked to provide more detailed background, experience, and financial information.
3: Approval and Training
- Approval Process: Undergo a review process that may include virtual or in-person meetings with the franchising team.
- Attend Discovery Day: If your application is approved, you will attend a Discovery Day to meet the team, view a store behind the scenes, and finalize your commitment.
- Training Program: Engage in Wetzel’s Pretzels’ award-winning LEAD training program, which includes one week at corporate headquarters and one week in-store.
Disclaimer
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