Franchisel.com — FDD Diligence Memo
Fazoli's
Generated 2026-04-06 · 2024 FDD · Government-filed source
Fazoli's
2024 FDD Diligence Memo
Composite score based on six FDD-derived dimensions.
Sys Health
6
Econ Burden
7
Red Flags & Key Signals
Net unit loss of -3. Monitor whether this is a one-year anomaly or a trend.
Avg $799,832 from government-filed FDD. Transparent disclosure is a positive signal.
Investment Overview
Items 5, 6, 7Total investment range: $450,000 – $1,100,000. Initial fee: $35,000. Royalty: 5%. Marketing fund: 3%.
Payback estimate: Investment-to-disclosed-revenue ratio: 0.97x. This is the ratio of midpoint investment ($775,000) to disclosed avg revenue ($799,832). No profit assumptions are applied.
Item 19 — Revenue
Item 19 — 2024 FDD (government-filed)Item 19 discloses avg revenue of $799,832 (Annual).
Sample: WeakThe FDD does not specify how many units were included in this figure. Investment-to-disclosed-revenue ratio: 0.97x ($775,000 midpoint investment vs $799,832 avg revenue).
Item 20 — System Health
Item 20 — 2024 FDDSystem flat — net -3 units in reporting period.
→ StableUnit count essentially unchanged. Closure/transfer rate of 4% is within normal range.
Total Units
216
Net Growth
-3
Turnover
4%
Year-over-Year Trends
2024 FDDOpened
+5
Closed
-8
Net
-3
Turnover rate: 4%
Prior-year Item 19 revenue data not available. Unit data above covers the reporting period in the 2024 FDD.
Key Contract Terms
Item 17Item 19 Data Quality Flags
Item 19Revenue type unclear
The FDD does not clearly specify whether figures are gross sales, net sales, or a profit metric. This limits comparability.
Profit not disclosed
Item 19 reports revenue only. No expense breakdown is provided. Profit cannot be determined from this disclosure alone.
All units included
Revenue figure includes all reporting units — broadest, most conservative sample basis.
Sample size not specified
The FDD does not state how many units contributed to this figure.
Data from 2024
Revenue covers 2024 — 2 years old. Reasonably current but worth confirming recent trends with existing franchisees.
Franchisee Interview Questions
Item 20 contactsUse Item 20 to get current franchisee contact info. Call at least 3-5. Ask these questions:
8 units closed in the most recent FDD period. Ask franchisees: what actually drove those closures — was it market conditions, operations, or franchisor decisions?
Look for: Franchisees who left voluntarily vs. those terminated. Any pattern by region, years in system, or franchisee profile.
How responsive is your franchisor rep — do they actually help when you have a problem, or are they just checking boxes?
Look for: Specific stories (not just vague positives). Ask about a time they needed help urgently — response time matters.
The FDD does not include audited financial statements. Ask: do you have any visibility into the franchisor's financial health? Have you ever been concerned about the company's stability?
Look for: Even anecdotal signals — changes in leadership, delays in royalty statement processing, reduced marketing fund activity.
If you decided to sell your franchise tomorrow, how easy would that be? Has the franchisor ever blocked or delayed a transfer you wanted?
Look for: Transfer fee surprises, right-of-first-refusal complications, or franchisor demanding upgrades before approving a sale.
What did your revenue look like in year 1 vs. year 2 vs. now? When did you reach breakeven?
Look for: Year 1 revenue is typically well below Item 19 averages (which often exclude ramp-up units). Expect 12-24 months to reach average.
What did the training actually cover vs. what you needed on day 1? What do you wish you'd learned before opening?
Look for: Gap between training content and operational reality. New franchisees often report the training covered theory but not real-world situations.
Data sources: 2024 Franchise Disclosure Document filed with a state franchise regulator (government record). Source: filed FDD. · Payback estimates and margin assumptions are editorial — not from the FDD. This memo does not constitute legal or financial advice. Consult a franchise attorney and accountant before signing. Generated 2026-04-06 by Franchisel.com.