Verified — real FDD extraction
Not found in the SBA Franchise Directory — SBA financing may be unavailable; verify with your lender
HOBBY USA
Other · independent · est. —
Hobby USA is a specialty retail franchise selling hobby merchandise such as models, radio-control vehicles, games, and collectibles. A franchisee operates a hobby store serving enthusiasts and gift shoppers, combining retail sales with the community events that drive repeat hobby traffic.
HOBBY USA net unit count declined -14.0% from 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Showing strain
Distress
The disclosed record shows weakness — shrinking units, elevated exits, or churn — worth reading closely before going further.
Exit rate · latest year
9.6%
fiscal 2025, per Item 20
Cost to open
$327K–$458K
Item 7 total investment range
SBA loan defaults
No loan record
no SBA 7(a)/504 loans found for this brand
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 9 of 94 franchised outlets left the system — a 9.6% annualized exit rate. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 106 | 100 | 94 |
| Opened | 0 | 2 | 1 |
| Transfers | 8 | 5 | 0 |
| Terminations | 0 | 0 | 2 |
| Non-renewals | 1 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 1 |
| Ceased — other reasons | 5 | 8 | 7 |
| Outlets at end | 100 | 94 | 86 |
| Net change | -6 | -6 | -8 |
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $50K franchise fee (Item 5) and a total investment of $327K–$458K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$327K–$458K
all-in investment range
Franchise fee (Item 5)
$50K
upfront, one-time
Royalty (Item 6)
4.75%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$48K
4.75% of sales, before profit
Over a 10-yr term
$475K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for HOBBY USA with an independent CPADistress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for HOBBY USA. That's a good sign — but it reflects news coverage, not a guarantee.
8 questions to ask a HOBBY USA franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These are the questions built from what HOBBY USA has actually disclosed — each one carries the number it came from, so you can tell whether the answer squares with the record.
- 01
HOBBY USA’s own Item 20 shows 9 of 94 franchised outlets left the system in fiscal 2025 — about 9.6%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2025
- 02
The system went from 100 units to 86 over 3 disclosed years. What's the explanation you've been given, and do you believe it?
A shrinking system means fewer owners funding the ad fund and support staff you're paying for.
FDD Item 20 · FY2023–FY2025
- 03
You pay 4.8% royalty on gross sales, plus the ad fund, before any of your own costs. On your actual revenue last year, what did you take home as the owner — not revenue, take-home?
Royalty is charged on sales, not profit. This is the number the brochure never shows and the one your life actually runs on.
FDD Item 6
- 04
HOBBY USA makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2026
- 05
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 06
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 07
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 08
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if HOBBY USA’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is paid by the franchisor to place you. I'm paid by you — and the job is pressure-testing HOBBY USA's numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
HOBBY USA franchise questions, answered from the filings
What percentage of HOBBY USA franchises closed last year?
In HOBBY USA's latest FDD Item 20 (fiscal 2025), 9 of 94 franchised outlets left the system — an annualized exit rate of 9.6%. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a HOBBY USA franchise cost?
Per HOBBY USA's 2026 FDD, buying in requires an initial franchise fee of $50K (Item 5) and a total initial investment of $327K–$458K (Item 7).
What royalty does HOBBY USA charge?
HOBBY USA charges an ongoing royalty of 4.8% of gross sales, per Item 6 of its 2026 FDD.
Does HOBBY USA disclose earnings (Item 19)?
Yes — HOBBY USA makes a financial performance representation in Item 19 of its 2026 FDD, reporting a median unit volume of $1.4M. Read it closely: franchisors choose which units and which metrics to include.