Shopping Cart
No products in the cart.

Wetzel’s Pretzels Franchises Costs & Profits (2023)

A leader pretzels franchise along with Auntie Anne’s, Wetzel’s Pretzels has grown steadily since it started franchising in 1944 and now has over 340 stores across the globe.

If you’re interested to buy a Wetzel’s Pretzels, you may want to know how much profits you can make with this business. This is what we’re looking at in this article.

With an average turnover of $748,857 per year and a total investment cost of $377,571, Wetzel’s Pretzels does seem like a great franchise opportunity.

How profitable is it really? Let’s find out!

Key stats

Franchise fee$40,000
Royalty fee7.0%
Marketing fee6.0%
Investment (mid-point)$295,000
Average sales$749,000
Sales to investment ratio2.5x
Payback period3 years (excellent)
Minimum net worth$300,000
Minimum liquid capital$50,000
Wetzel's Pretzels business plan template

Wetzel’s Pretzels Franchise Business Plan

All the stats: startup costs, profits, breakeven, etc.

5-year financial projections built with the FDD

Excellent 4.8/5 based on 70 reviews

Excellent 4.8/5 based on 70 reviews

What is Wetzel’s Pretzels?

Wetzel’s Pretzels is an American fast-food chain that specializes in pretzels and hotdogs and lemonades.

Headquartered in Pasadena, California, the brand was founded in 1994 by Rick Wetzel and Bill Phelps. Its first location was in the South Bay Galleria.

Its franchising journey began in 1996, and now the brand has over 340 stores in the US, Canada, Central America, and around the world.

Wetzel’s Pretzels franchises: pros and cons

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.

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 much does a Wetzel’s Pretzels franchise cost?

On average, you would need to invest around $295,000 to open a Wetzel’s Pretzels restaurant. This includes an initial franchise fee of $40,000.

As the investment amount is an average, it may change depending on some factors like location, type of bakery store you choose, the market price of certain pieces of equipment at the time, etc.

For instance, you would invest 2x times more if you choose a Twisted by Wetzel’s bakery over a Concession truck or trailer. According to the latest Franchise Disclosure Document, the investment required ranges from $162,600 to $659,150 depending on the type of bakery you choose.

Indeed, whilst Wetzel’s has mainly 4 different format of bakeries you can choose from as a franchisee:

  • Wetzel’s Pretzels is the most common type of store
  • Twisted by Wetzel’s is the same as Wetzels Pretzels yet with an expanded menu offering (such as frozen delicacies), usually located in a larger store
  • Concession truck or trailer is simply a food truck operating under the Wetzel’s Pretzels brand as a concession. It has a limited set of menu options instead due to its limited size
  • Remote Mobile Unit is the less common type of store

The investment amount you would pay mainly covers costs like formation costs, grand opening advertising, and operating costs

  • Formation costs mean the expenses that are essential to open a business; namely: utility deposits, licenses, permits lease review fees, business premises, leasehold improvements, digital display boards, signs & menu boards, training expenses, architect engineers & construction manager fees, etc.
  • Operating costs mean the expenses to operate the business after beginning; namely: insurance, initial inventory & small wares, office equipment & supplies, 90 days of working capital, etc.
Type of ExpenditureLowHigh
Initial franchise fee$30,000$40,000
Formation costs$326,700$551,650
Grand opening$3,000$7,500
Operating costs$28,500$60,000
Total$388,200$659,150
Source: 2023 Franchise Disclosure Document
Wetzel's Pretzels business plan template

Wetzel’s Pretzels Franchise Business Plan

All the stats: startup costs, profits, breakeven, etc.

5-year financial projections built with the FDD

Excellent 4.8/5 based on 70 reviews

Excellent 4.8/5 based on 70 reviews

What is the turnover of a Wetzel’s Pretzels?

On average, a Wetzel’s Pretzels franchise makes $749,000 in sales per year.

The sales number is an average; thus it can vary depending on the location, market competition, and such factors. For example, a restaurant located in a mall generates 4 times more revenue than a Concession truck/trailer.

Source: 2022 Franchise Disclosure Document

How profitable is a Wetzel’s Pretzels franchise?

On average, a Wetzel’s Pretzels franchise makes $250,118 in profits per year. This number represents a 25% profit margin (adjusted EBITDA margin)

The 25% adjusted EBITDA margin is in line compared to similar franchises as per our intelligence (~25-27% industry average). Despite the very low COGS (20.4% sales vs. 25% industry average) and labor costs (25.2% vs 29%), the profit margin is comparatively lower vs. other similar franchises. This is mainly due to high rent (16% vs. 8%).

Note that Wetzel’s Pretzels doesn’t provide any financial information regarding costs except for the standard Wetzel’s Pretzels bakery format (eg. Twisted by Wetzel’s and the Concession truck/trailer formats data is not provided in the FDD).

Profit-and-lossAmount ($)As % of sales
Sales$748,857100%
COGS$(152,767)20.4%
Labor$(188,712)25.2%
Rent$(119,817)16.0%
Royalty + marketing fees$(97,351)13.0%
Adjusted EBITDA$190,210~25%
Source: 2022 Franchise Disclosure Document

Okay, now what does the adjusted EBITDA means? Does this mean you will earn 25% net profit from the business? Actually no, you will keep less than 25% of the total revenue in your pocket. Indeed, you may need to deduct taxes, debt interest expenses, and other costs from this margin. This is what we’re looking at in the next paragraph.

Is a Wetzel’s Pretzels franchise a good investment?

We found that it takes on average 3.4 years to repay your initial investment if you were to invest in a Wetzel’s Pretzels franchise. This is an excellent payback period, much better than most other restaurant, coffee shop and bakery franchises we had to analyse.

To calculate this payback period, we estimated net profits at 15% of sales, which makes sense given adjusted EBITDA is 25% (see above). Indeed, it’s from net profits that as a franchisee (or an investor) you will be able to pay yourself dividends and reimburse your original investment.

Therefore, whether you invest from your own funds, from other investors’ money or from a SBA loan for example, the investment would be paid back quite fast. After only 3.4 years you can start reaping the profits.

Interested? If you’re considering buying a Wetzel’s Pretzels franchise you will need to prepare a business plan, download our pre-built business plan template below and get your franchise funded.

Wetzel's Pretzels business plan template

Wetzel’s Pretzels Franchise Business Plan

All the stats: startup costs, profits, breakeven, etc.

5-year financial projections built with the FDD

Excellent 4.8/5 based on 70 reviews

Excellent 4.8/5 based on 70 reviews

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)Payback (years)Min. net worth ($)Min. liquid capital ($)
Chick-Fil-Ahttps://sharpsheets.io/blog/chick-fil-a-franchise-costs-profits/Chicken1,363,5104,227,4173.12.2--
Dunkin' Donutshttps://sharpsheets.io/blog/dunkin-donuts-franchise-costs-profits/Donuts779,0001,056,5211.44.9500,000250,000
Domino'shttps://sharpsheets.io/blog/dominos-franchise-profits-costs/Pizza398,7251,286,4283.23.9250,00075,000
Krispy Kremehttps://sharpsheets.io/blog/krispy-kreme-franchise-costs-profits/Donuts824,0003,400,0004.11.62,000,000300,000
Little Caesarshttps://sharpsheets.io/blog/little-caesars-franchise-costs-profits/Pizza1,022,850798,1130.88.5350,000150,000
Wingstophttps://sharpsheets.io/blog/wingstop-franchise-costs-profits/Chicken631,6951,460,4592.32.91,200,000600,000
Steak 'n Shakehttps://sharpsheets.io/blog/steak-n-shake-franchise-costs-profits/Burger, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookieshttps://sharpsheets.io/blog/crumbl-cookie-franchise-cost-profits/Sweets507,2241,582,0903.12.1300,000150,000
Taco Bellhttps://sharpsheets.io/blog/taco-bell-franchise-costs-profits/Mexican462,4131,650,0003.61.91,500,000750,000
Popeyeshttps://sharpsheets.io/blog/popeyes-franchise-costs-profits/Chicken1,095,7831,444,6171.35.11,000,000500,000
Smoothie Kinghttps://sharpsheets.io/blog/smoothie-king-franchise-costs-profits/Smoothie688,108573,2690.88.0300,000100,000
Jersey Mike'shttps://sharpsheets.io/blog/jersey-mikes-franchise-costs-profits/Sandwich574,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakeshttps://sharpsheets.io/blog/nothing-bundt-cakes-franchise-costs-profits/Sweets538,6501,307,2802.42.7600,000150,000
Jimmy John'shttps://sharpsheets.io/blog/jimmy-johns-franchise-costs-profits/Sandwich513,650874,8451.73.9300,00080,000
Texas Roadhousehttps://sharpsheets.io/blog/texas-roadhouse-franchise-costs-profits/Steakhouse4,209,5002,955,5340.79.5n.a.200,000
Kung Fu Teahttps://sharpsheets.io/blog/kung-fu-tea-franchise-costs-profits/Bubble tea250,125353,2371.44.7n.a.25,000
Wendy’shttps://sharpsheets.io/blog/wendys-franchise-cost-profits/Burger1,374,8331,791,2311.35.11,000,000500,000
Burger Kinghttps://sharpsheets.io/blog/burger-king-franchise-costs-profits/Burger1,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-Inhttps://sharpsheets.io/blog/sonic-drive-in-franchise-costs-profits/Burger1,467,0831,617,0001.16.01,000,000500,000
Panera Breadhttps://sharpsheets.io/blog/panera-bread-franchise-costs-profits/Sandwich2,290,5002,599,4321.15.97,500,0003,000,000
Pizza Huthttps://sharpsheets.io/blog/pizza-hut-franchise-costs-profits/Pizza935,575906,9111.06.9700,000350,000
KFChttps://sharpsheets.io/blog/kfc-franchise-costs-profits/Chicken1,802,0501,567,4740.97.71,500,000750,000
Arby’shttps://sharpsheets.io/blog/arbys-franchise-costs-profits/Sandwich1,184,9751,126,2631.07.01,000,000500,000
Dairy Queenhttps://sharpsheets.io/blog/dairy-queen-franchise-costs-profits/Ice Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Boxhttps://sharpsheets.io/blog/jack-in-the-box-franchise-costs-profits/Burger2,195,8001,755,5030.812.51,000,000250,000
Papa John’shttps://sharpsheets.io/blog/papa-johns-franchise-costs-profits/Pizza353,6951,101,1273.12.1750,000250,000
Zaxby’shttps://sharpsheets.io/blog/zaxbys-franchise-costs-profits/Chicken534,7502,229,1874.22.41,000,000500,000
Hardee’shttps://sharpsheets.io/blog/hardees-franchise-costs-profits/Burger1,759,0001,147,9750.710.21,000,000300,000
Culver’shttps://sharpsheets.io/blog/culvers-franchise-costs-profits/Burger4,044,5003,051,7620.88.82,000,000350,000
Five Guyshttps://sharpsheets.io/blog/five-guys-franchise-costs-profits/Burger511,2251,203,3662.42.8500,000250,000
Carl’s Jr.https://sharpsheets.io/blog/carls-jr-franchise-costs-profits/Burger1,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbinshttps://sharpsheets.io/blog/baskin-robbins-franchise-costs-profits/Ice Cream465,100316,8150.79.8250,000125,000
IHOPhttps://sharpsheets.io/blog/ihop-franchise-costs-profits/Pancakes2,058,3021,553,3110.88.81,500,000500,000
Applebee’shttps://sharpsheets.io/blog/applebees-franchise-costs-profits/Casual American5,137,9662,356,9650.514.51,000,000500,000
Denny'shttps://sharpsheets.io/blog/dennys-franchise-costs-profits/Casual American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy'shttps://sharpsheets.io/blog/papa-murphys-franchise-costs-profits/Pizza433,174580,4411.35.0275,000125,000
Auntie Anne'shttps://sharpsheets.io/blog/auntie-annes-franchise-costs-profits/Pretzels229,692343,1351.55.6300,000100,000
Firehouse Subshttps://sharpsheets.io/blog/firehouse-subs-franchise-costs-profits/Sandwich613,186888,3561.44.6350,000100,000
Tropical Smoothie Cafehttps://sharpsheets.io/blog/tropical-smoothie-cafe-franchise-costs-profits/Smoothie430,500961,9692.23.0350,000125,000
Marco’s Pizzahttps://sharpsheets.io/blog/marcos-pizza-franchises-costs-profits/Pizza437,625895,5232.03.3400,000100,000
Cinnabonhttps://sharpsheets.io/blog/cinnabon-franchises-costs-profits/Sweets276,062394,8971.45.8300,000120,000
Cold Stone Creameryhttps://sharpsheets.io/blog/cold-stone-creamery-franchise-costs-profits/Ice Cream310,956417,5881.35.0250,000100,000
Jambahttps://sharpsheets.io/blog/jamba-franchise-costs-profits/Smoothie414,562597,0281.47.7300,000100,000
Church’s Chickenhttps://sharpsheets.io/blog/churchs-texas-chicken-fees-sales-costs/Chicken1,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grillhttps://sharpsheets.io/blog/moes-southwest-grill-franchises-costs-profits/Mexican792,3701,013,3611.35.21,000,000100,000
Tim Hortonshttps://sharpsheets.io/blog/tim-hortons-franchises-costs-profits/Coffee1,242,7501,188,2401.07.0500,000100,000
Checkers & Rally'shttps://sharpsheets.io/blog/checkers-franchises-profits-sales-costs/Burger837,8471,039,7731.25.4750,000250,000
Charleys Philly Steakshttps://sharpsheets.io/blog/charleys-philly-steaks-costs-profits/Sandwich509,806786,2331.54.3500,000100,000
Buffalo Wild Wingshttps://sharpsheets.io/blog/buffalo-wild-wings-costs-profits/Chicken3,546,9002,534,1480.79.31,500,000750,000
Rita's Icehttps://sharpsheets.io/blog/ritas-ice-franchise-costs-profits/Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurantshttps://sharpsheets.io/blog/aw-restaurants-franchises-costs-profits/Burger786,750851,2121.16.2350,000150,000
Hungry Howie’s Pizzahttps://sharpsheets.io/blog/hungry-howies-pizza-franchise-costs-profits/Pizza419,682806,8991.93.5750,000200,000
Bojangleshttps://sharpsheets.io/blog/bojangles-franchise-costs-profits/Chicken1,658,0001,801,0571.16.11,000,000500,000
McAlister’s Delihttps://sharpsheets.io/blog/mcalister-deli-franchise-costs-profits/Sandwich1,424,9631,865,8611.35.11,000,000500,000
Round Table Pizzahttps://sharpsheets.io/blog/round-table-pizza-franchise-costs-profits/Pizza783,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eatshttps://sharpsheets.io/blog/qdoba-mexican-eats-franchise-costs-profits/Mexican659,250972,9621.54.5
Freddy’shttps://sharpsheets.io/blog/freddys-franchise-costs-profits/Burger1,453,0401,792,9291.25.41,000,000400,000
Taco John’shttps://sharpsheets.io/blog/taco-johns-franchise-costs-profits/Mexican1,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffeehttps://sharpsheets.io/blog/scooters-coffee-franchise-costs-profits/Coffee1,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagelshttps://sharpsheets.io/blog/einstein-bros-bagels-franchise-costs-profits/Sandwich750,075885,0111.25.71,000,000536,500
Great American Cookieshttps://sharpsheets.io/blog/great-american-cookies-franchise-costs-profits/Sweets385,275452,7711.25.7250,000100,000
Wienerschnitzelhttps://sharpsheets.io/blog/wienerschnitzel-franchise-costs-profits/Hot dogs873,300880,9801.06.6600,000250,000
Blaze Pizzahttps://sharpsheets.io/blog/blaze-pizza-franchise-costs-profits/Pizza865,4501,096,4321.37.9500,000300,000
Wetzel's Pretzelshttps://sharpsheets.io/blog/wetzels-pretzels-franchise-costs-profits/Pretzels377,571748,8572.03.4300,00050,000
Pizza Ranchhttps://sharpsheets.io/blog/pizza-ranch-franchise-costs-profits/Pizza3,268,3001,174,0880.418.61,000,000297,000
Del Tacohttps://sharpsheets.io/blog/del-taco-franchise-costs-profits/Mexican1,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’shttps://sharpsheets.io/blog/schlotzskys-franchises-costs-profits/Healthy, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’shttps://sharpsheets.io/blog/captain-ds-franchise-profits-costs/Seafood982,7781,067,8160.419.01,000,000350,000
Biggby Coffeehttps://sharpsheets.io/blog/biggby-coffee-franchise-profits-costs/Coffee310,575648,3520.320.0300,000100,000
Which Wichhttps://sharpsheets.io/blog/which-wich-franchises-profits-costs/Sandwich330,375281,8860.322.2500,000150,000
Marble Slab Creameryhttps://sharpsheets.io/blog/marble-slab-franchises-costs-profits/Ice Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizzahttps://sharpsheets.io/blog/mountain-mikes-franchise-profits-costs/Pizza410,900865,7130.320.0300,000100,000
Huddle Househttps://sharpsheets.io/blog/huddle-house-franchise-cost-profits/Diner988,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecuehttps://sharpsheets.io/blog/ll-hawaiian-barbecue-franchises-costs-profits/BBQ334,350612,9210.333.3500,000150,000
Chicken Salad Chickhttps://sharpsheets.io/blog/chicken-salad-chick-franchises-costs-profits/Healthy, Salads651,0001,202,0200.320.0750,000250,000
Golden Chickhttps://sharpsheets.io/blog/golden-chick-franchises-costs-profits/Chicken362,975917,6092.52.62,000,000425,000
Perkinshttps://sharpsheets.io/blog/perkins-franchise-costs-profits/Diner1,922,7281,729,2460.97.41,500,000500,000
Waba Grillhttps://sharpsheets.io/blog/waba-grill-franchises-costs-profits/Teryaki454,000466,5361.06.51,000,000250,000
Bruster’s Ice Creamhttps://sharpsheets.io/blog/brusters-franchises-profits-costs/Ice Cream663,925466,6960.79.5375,000150,000

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.