FRANCHISE·WATCH·DESK

From the filed FDD — automated extraction, check the source

2025 FDD

SBA-eligible · directory code S1103 since 2017

MENCHIE'S

Frozen yogurt · parent company: not identified

Menchie's is a self-serve frozen yogurt chain. Customers fill their own cups from a range of frozen yogurt flavors and toppings and pay by weight. A franchisee operates a colorful, family-oriented frozen-yogurt shop, keeping machines and toppings stocked and managing staff.

MENCHIE'S net unit count grew 0.0% over 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. Most numbers on this page come from that document; others come from federal SBA loan records and labor and census data, each labelled with its source:

  • 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, transferred and left the system, the main basis for our verdict, which rates how strong the disclosed record is, or says when the system is too new, the filing too old, or the disclosure too thin to judge.

Our rating · opinion

Weaker disclosed record

SBA loans to its franchisees approved FY2010–2020 charged off far more often than franchise loans of the same years (33 vs about 18 expected, 1.9×). A charge-off is a lender's loss, not proof a business closed, but at 1.9× the same-year rate we cap the rating regardless of what Item 20 shows.

Exit rate · fiscal 2025

2.4%

vs 4.6% median across 133 comparable systems (food & dining)

Cost to open

$180K–$515K

Item 7 total investment range

SBA loan losses · vs same-year loans

1.9×

33 of 189 charged off vs ~18 expected

Market density · California

Typical density

12% denser than the national average

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Data as of 2026-10-29. Figures come from MENCHIE'S's public FDD filings (latest: MN 2025, extracted 2026-06-19) and SBA FOIA loan records (through FY2026), extracted by us and possibly containing errors. The rating is our opinion, not investment, legal, or tax advice. Franchisor or owner and see something wrong? Report a correction — we review every request.

Buying an existing MENCHIE'S? Transfer fee $15,000, resale record and asking-price check →

Where the sources disagree

FDD record · SBA loans · model · auditor

Our answer: Weaker disclosed record

We lead with the loan record: franchisees' loans defaulted far more often than franchise loans made in the same years, which outweighs what the franchisor's own Item 20 shows.

FDD record · Item 20

Steady operating record

Units held flat (2023–2025: 296 → 296); exit rate 2.4% (fiscal 2025) vs 4.6% median.

SBA loans · vs same-year loans

Far more defaults than expected (1.9×)

33 charge-offs among 189 resolved loans approved FY2010–2020; about 18 expected.

Modeled risk

Lower risk

The brand's own loan record contradicts this prediction; the record leads.

Auditor opinion · Item 21

Not extracted

We did not extract the audit opinion.

Behind the verdict

the record, factor by factor · Item 20

hi-1.0.0
Net unit growth41%

latest consecutive years · Item 20 Table 1

Fair
Exit quality29%

terminations + ceased-ops vs. all exits · Table 3

Strong
Transfer / churn18%

transfers vs. base · Table 3

Fair
Promise-keeping12%

actual vs. projected openings · Table 5

Weak
Transparencynot in verdict

Item 19 disclosure + completeness · shown, not counted in the verdict

Strong

Systemwide units

2023–2025

0.0%
296202329520242962025

Survival record

FDD Item 20 · outlet status by year

In fiscal 2025, 7 of 294 franchised outlets left the system — an exit rate of 2.4% (fiscal 2025), vs a 4.6% median across 133 comparable systems (food & dining). An exit is not a failure: this counts terminations, non-renewals and "ceased — other reasons" as reported, and excludes transfers to new owners.

Show the outlet tables ↓
Status (FTC)202320242025
Outlets at start303296295
Opened498
Transfers223415
Terminations0107
Non-renewals000
Reacquired by franchisor000
Ceased — other reasons1100
Outlets at end296295296
Net change-7-1+1

The lender's view

SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years

Banks have made 267 SBA-backed loans to MENCHIE'S franchisees since 2010. Of the 189 approved FY2010–2020 that have resolved, 33 charged off — where about 18 would be expected for franchise loans made in the same years. That is 1.9× the expected rate: these loans defaulted far more often than comparable franchise loans.

All-time, 33 of 190 resolved loans charged off (17.4%). That raw figure mixes every approval year since 2010 — loans made in 2006–08 failed at several times the rate of loans made in 2010–13 across all franchises — so it is shown as evidence, not as the score.

Loss vs same-year loans

1.9×

33 of 189 resolved (FY2010–2020) vs ~18 expected

All-time charge-off · raw

17.4%

33 of 190 resolved, every approval year

Loss given default

60.6%

charged-off $ ÷ approved $, defaulted loans

Avg. loan · FY2020+

$236,295

what recent franchisees borrowed

Median time to default

61 mo

approval → charge-off, defaulted loans

Lenders · FY21+ vs FY16–20

15 vs 36

distinct banks — fewer than FY16–20 (loan volume and SBA name coding affect this)

Charge-off rate by loan approval year (%) · dashed line = all franchise loans that year

41'118171318'151111360'19

SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO MENCHIE'S BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD

The owner's side of the deal

FDD × federal loan record

Who finances it

The Huntington National Bank

17.6% of this brand's loans

That lender charges off 9.9% of its resolved SBA loans to other franchise brands in the FOIA file, vs 14.8% nationally — a read on that lender's portfolio mix, not a finding about the bank.

Who buys it

72.7%

borrowers with no other franchise SBA loan on record

The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators have charged off less often than brands sold mostly to newcomers (see methodology).

Does experience help here?

+28.7pp

multi-unit vs single-unit owners

Owners of multiple units default at 41.4%; single-unit owners at 12.7% (each on 15+ resolved loans, owners identified by borrower-name matching).

Computed from 267 SBA 7(a)/504 loans matched to MENCHIE'S by SBA franchise code in the SBA FOIA file. Debt service assumes level amortization at the average disclosed term and rate. Owner-level splits rely on borrower-name matching and may misclassify. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.

What it costs — and what it drags

FDD Items 5–7 · fees, investment, royalty

Buying in means a $53,900 franchise fee (Item 5) and a total investment of $180K–$515K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.

To open (Item 7)

$180K–$515K

all-in investment range

Franchise fee (Item 5)

$53,900

upfront, one-time

Royalty (Item 6)

6%

of sales, ongoing

If a unit does this in annual sales…$900K/yr

Starts at a placeholder of $900K — a round figure for the sector, not from MENCHIE'S filings. Set your own figure and check it against this brand's Item 19 and what owners tell you.

Royalty you'd pay / yr

$54K

6% of sales, before profit

Over a 10-yr term

$540K

royalties alone, excl. ad fund

This estimate is computed by software from the brand's public filings and any inputs you enter. No CPA prepared it for you and no assurance is provided on it. Actual results will differ, and the differences may be material.

This is not profit. It covers what the FDD fixes: what you put in, and the royalty you owe on sales. Your take-home depends on food and packaging cost, labor, rent, and the months to breakeven, none of which the FDD fixes for your unit (some Item 19s include cost data — read it).

Build a real pro-forma for MENCHIE'S with a buyer-paid CPA

How the earnings claim is built

FDD ITEM 19 · BASIS · 2025 FDD

The headline figure is Average Gross Sales for CY2025 (Jan 1 - Dec 31, 2025), for 278 of 295 units, leaving out not open entire 2025, non-traditional locations. The mean is 7% above the median, so a minority of high-volume units pulls the average up.

Graded on three things the filing states: coverage (2 points if the figure covers at least 75% of the units it is compared with, 1 point for 50–75%), centre (2 points if it prints both a median and a mean, 1 for one of them), and costs (2 points for costs through a profit line or full cost detail, 1 for some cost items). 5–6 points = More complete, 3–4 = Partial, 0–2 = Limited. The grade describes the disclosure, not the business.

More completeCovers 278 of 295 units (94%) · median and mean · some costs
Show the basis ↓
What is measuredAverage Gross Sales (gross sales)
PeriodCY2025 (Jan 1 - Dec 31, 2025)
Whose resultsFranchised outlets
Units included278 of 295 franchised Stores operating in the U.S. at Dec 31, 2025
Left out
  • not open entire 2025
  • non-traditional locations
Average (mean)$639K
Median$595K
Mean vs medianmean 7.3% above median
Met or beat the average123 (44%)
Costs shownSome cost items only
Wherep. 37 (Item 19 runs pp. 36–40)
The filing's words“Of those 295 Stores, 278 were open and operating for the entire Measurement Period and were not located in non-traditional locations.”

Labor record

US Dept. of Labor enforcement · franchisee-level · FY2005–present

Federal investigators have concluded 21 wage cases against operators of this system, recovering $53K in back wages for 499 workers, including 11 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.

Concluded cases

21

Back wages owed

$53K

Employees affected

499

Since 2020

6

11 of these cases involved child-labor violations, covering 56 minors across the system's franchised locations.

Read this carefully. The employers in these cases are individual MENCHIE'S franchisees — separately owned businesses operating under the brand name — not MENCHIE'S itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Cases are matched to the brand by trade name and may include misattributed employers. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2024.

Modeled risk

FDD Risk Score · a prediction from disclosure and loan-file features

Lower risk · directional · modeled

This brand's own loan record is worse than the model predicts: its franchisees' SBA loans charged off at 1.9× the rate of same-year franchise loans, where the model expects about 0.8×. We lead with the observed record; the model is shown for context.

Observed · vs same-year loans

1.9×

33 of 189 seasoned loans charged off

Risk percentile

Lower risk

Directional · no point estimate

Modeled · vs same-year loans

band only

too few seasoned loans to check

Top drivers: Share financed by high-loss lenders (lowers) · Item 20 exit rate (lowers) · System size (log units) (lowers) · No Item 19 disclosure (raises). The observed record differs from the model, so treat the score as context only. A linear scorecard trained on brands' vintage-adjusted SBA loss records; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.

Public records

Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored

FULL REPORT →

10 questions to ask a MENCHIE'S 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 questions come from what MENCHIE'S has disclosed. Each one carries the number it came from, so you can check the answer against the record.

  1. 01

    MENCHIE'S own Item 20 shows 7 of 294 franchised outlets left the system in fiscal 2025 — about 2.4%. 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

  2. 02

    15 units transferred to new owners in fiscal 2025. When you look at those, were they people cashing out a good business — or getting out of a bad one?

    Item 20 counts transfers as neutral, but a transfer can be a good sale or a reluctant exit — the filing does not say which.

    FDD Item 20 · FY2025

  3. 03

    SBA loans to MENCHIE'S franchisees approved 2010–2020 defaulted far more often than franchise loans made in the same years: 33 charge-offs among 189 resolved loans, where about 18 would be expected (1.9×). Did you finance with an SBA loan, and how close did your first two years come to trouble?

    This is the lender's view of how these loans ended, from public federal records matched by SBA franchise code — independent of anything the franchisor discloses — compared with franchise loans made in the same years. A charge-off is a loan outcome, not proof the business closed.

    SBA 7(a)/504 loan record, seasoned loans FY2010–FY2020 · 1.9× of same-vintage franchise loans

  4. 04

    Item 7 says the low end to open is $180K; the average recent SBA loan to MENCHIE'S franchisees was $236K. What did you actually spend to open, all in — and did your loan cover anything beyond the build-out?

    Lenders size loans to the project they finance. If owners say they spent near the loan figure rather than the Item 7 floor, budget from what they spent.

    FDD Item 7 vs SBA approvals FY2020+

  5. 05

    You pay 6.0% 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

  6. 06

    MENCHIE'S 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 · 2025

  7. 07

    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

  8. 08

    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

  9. 09

    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

  10. 10

    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 MENCHIE'S numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.

Before you sign anythingfree · 30 min · no commission

A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing MENCHIE'S numbers, including talking you out of a bad deal.

Don Drummond, CPA — Virginia #43775 · what I charge

Book a free 30-minute call →
Own or owned a MENCHIE'S — or represent the franchisor?no appointment · read by a person

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. Franchisors: send corrections with the page reference and we will review them against the filing and update or annotate the page. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.

MENCHIE'S franchise questions, answered from the filings

How many MENCHIE'S franchised outlets left the system last year?

In MENCHIE'S's latest FDD Item 20 (fiscal 2025), 7 of 294 franchised outlets left the system — an exit rate of 2.4% — compared with a 4.6% median across 133 comparable systems (food & dining) tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons" as the franchisor reported them; it excludes transfers to new owners. The FDD does not say why each outlet left, and an exit is not the same as a failure.

How much does a MENCHIE'S franchise cost?

Per MENCHIE'S's 2025 FDD, buying in requires an initial franchise fee of $53,900 (Item 5) and a total initial investment of $180K–$515K (Item 7).

What royalty does MENCHIE'S charge?

MENCHIE'S charges an ongoing royalty of 6.0% of gross sales, per Item 6 of its 2025 FDD.

Does MENCHIE'S disclose earnings (Item 19)?

Yes — MENCHIE'S makes a financial performance representation in Item 19 of its 2025 FDD. Read it closely: franchisors choose which units and which metrics to include.

How often do SBA loans for MENCHIE'S franchises default?

SBA loans to MENCHIE'S franchisees approved 2010–2020 defaulted far more often than franchise loans made in the same years: 33 charge-offs among 189 resolved loans, where about 18 would be expected (1.9×). All-time, 33 of 190 resolved loans since 2010 charged off (17.4%); that raw figure mixes every approval year, so we compare with same-year loans instead. A charge-off is a loan loss, not proof the business closed. Source: public SBA 7(a)/504 FOIA data.