The Counter Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$711,133 - $1,983,750
Franchise Fee
$16,000
Total US Locations
11
Business Summary
The Counter operates restaurants featuring customizable build-your-own burgers, signature burgers, side dishes, sandwiches, salads, desserts, ice-cream shakes, and both non-alcoholic and alcoholic beverages. The restaurants are designed with an industrial decor and contemporary art, aiming to be a modern take on a classic burger joint. Customers order from a checklist menu that allows for over 312,000 burger combinations. The Counter focuses on product quality, nutritional value, customer service, and individual choice, appealing to health-conscious consumers looking for alternatives to traditional fast food.
Corporate History
MTY Franchising USA, Inc. started offering The Counter franchises in December 2017 after acquiring the brand. The Counter brand itself had been franchised by prior entities since 2006. MTY Franchising USA, Inc. was originally incorporated in Delaware in 2001 as The Extreme Pita Franchising USA, Inc. and later merged with a Tennessee corporation of the same name in 2019, with the Tennessee entity surviving. Its parent company, MTY Franchising Inc. (Canada), was incorporated in 1979 and acquired MTY USA's stock in 2013, with MTY Food Group, Inc. serving as the ultimate public parent corporation. The MTY Food Group has a large portfolio of over 50 different restaurant concepts, primarily in Canada and other international countries, with many acquired over the years, including Kahala Brands in 2016, Imvescor Restaurant Group in 2018, Papa Murphy's in 2019, BBQ Holdings (which includes Famous Dave's and Village Inn) in 2022, Wetzel's Pretzels in 2022, and Sauce Pizza and Wine in 2022.
Financial Overview
Investment Range
$711,133 - $1,983,750
Franchise Fee (Low)
$16,000
Franchise Fee (High)
$35,000
Royalty %
6%
Marketing %
1%
Equipment Costs (Low)
$262,300
Equipment Costs (High)
$469,750
Working Capital
$125,000
Audited Financials
Yes
Offers Financing
Yes
Financing Details
MTY Franchising USA, Inc. generally does not offer direct or indirect financing. However, under specific conditions and at its sole discretion, it may provide certain financing arrangements. For instance, MTY Franchising USA, Inc. or its affiliates may agree to guarantee a franchisee's lease for their restaurant location. If this occurs, the franchisee would pay a lease guarantee fee equal to 10% of the total rental obligations being guaranteed, up to a maximum of $10,000. Additionally, if a franchisee purchases a corporate-owned restaurant from one of MTY Franchising USA, Inc.'s affiliates, the franchisor may finance up to 100% of the purchase price. The interest rate for such financing would range from 0% to 12% annually, depending on factors like the franchisee's creditworthiness and down payment. Repayment periods typically range from 12 to 60 months in equal monthly installments. A first lien on all equipment would be required as security for these loans.
Performance Metrics
Total US Locations
11
Franchised Units
8
Corporate Units
3
Avg Square Footage
2,750
Franchising Since
2006
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
20
Litigation Summary
MTY Franchising USA, Inc. and its affiliates have a history of litigation. Notably, there were several concluded cases involving predecessor and affiliated brands such as The Extreme Pita, Kahala Franchising, SFF (SweetFrog), Fresh Enterprises (Baja Fresh), Famous Dave's, VI BrandCo (Village Inn), Wetzel's Pretzels, and Papa Murphy's. These cases, dating from 1992 to 2021, involved various issues including violations of franchise investment laws, misrepresentation of financial performance, breach of contract, fraud, trademark infringement, and administrative actions related to franchise registration and disclosure. Settlements in these cases ranged from tens of thousands to millions of dollars, and some involved changes to territorial rights or asset transfers. More recently, within the fiscal year ending November 30, 2024, an affiliate, Kahala Franchising, filed two new lawsuits against franchisees for breach of contract and forcible entry and detainer.
Bankruptcy History
MTY Franchising USA, Inc.'s co-Chief Operating Officer, Adam Lehr, filed for personal Chapter 13 bankruptcy in January 2018. This proceeding, related to his ownership of Lehr Restaurant Group and Lehr Real Estate, was discharged in June 2021 and the case is now closed.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their The Counter franchise agreement, franchisees must notify MTY Franchising USA, Inc. at least 120 days before the current term expires. They must be in good standing, meaning they are not in default and have not received more than three default notices during the term (or more than two in the five years before renewal). Franchisees need to have approved premises, pay a renewal franchise fee, complete any required remodeling or refurbishing, and be current on all financial obligations to MTY Franchising USA, Inc. They also need to sign a general release and a new franchise agreement, which may have different terms and conditions, potentially including higher royalty and advertising fees. After the initial renewal, there is no further right to renew.
Training & Support Program
Franchisor Assistance
Before opening, MTY Franchising USA, Inc. provides franchisees with an online New Store Opening Timeline and access to a Confidential Operations Manual. They offer site selection criteria, prototype designs, and specifications. The franchisor may visit proposed sites and requires franchisees to retain designated architects, kitchen design specialists, and construction managers. Initial training for up to three individuals includes KTEC Classroom Training and In-Store Training modules, with additional New Store Opening training provided for the first three restaurants. MTY Franchising USA, Inc. also assists with grand opening advertising strategies. After opening, ongoing support includes regular consultations and advice, periodic advanced and refresher training programs (some mandatory), and updates to the Confidential Manual. The franchisor reviews requests for unapproved products/suppliers and conducts periodic compliance inspections. They administer the advertising fund, review local advertising, maintain a brand website, and oversee the gift card program. A franchisee advisory council is also in place for feedback.
Initial Training Hours
484
Training Location
Scottsdale, Arizona, or online
Ongoing Support
After opening, The Counter franchisees receive ongoing support from MTY Franchising USA, Inc. through regular consultations and advice on administrative and operational issues. The franchisor may offer periodic advanced and refresher training programs, some of which may be mandatory. They continuously revise the Confidential Manual to incorporate new developments, products, and graphics, providing these updates to franchisees. MTY Franchising USA, Inc. also reviews requests from franchisees who wish to use unapproved non-proprietary products or alternative suppliers. Franchisor representatives conduct periodic visits to restaurants to inspect operations, observe and interview employees, and review records to ensure compliance with the franchise agreement and System Standards. MTY Franchising USA, Inc. administers the advertising fund and reviews any local advertising materials created by franchisees. They maintain a website that promotes The Counter brand and its locations, and they supervise The Counter's gift card program. Additionally, a franchisee advisory council (FAC) is implemented to gather input and feedback from franchisees.
Franchise Requirements
Ideal Candidate Profile
MTY Franchising USA, Inc. seeks The Counter franchisees who intend to actively participate in the direct operation and daily affairs of their restaurant, discouraging passive investment. While personal participation isn't strictly mandated, the franchisor's experience suggests that owner-operated restaurants tend to perform better. The business requires personal management with on-premises supervision by the franchisee, another principal, or a qualified manager who has successfully completed the training program. Managers must meet specific criteria as qualified restaurant operators and dedicate full-time attention to the business. Franchisees, or their managers, should possess strong business judgment, the ability to hire effective staff, and demonstrate professional and financial capabilities to comply with System Standards.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
Yes
Operational Details
Location Type
retail
Owner Participation
Hands-On
Territory Type
non-exclusive
Territory Size Requirements
The Counter grants a Protected Area based on the location type. For restaurants located within a regional shopping mall, the Protected Area encompasses the entire mall boundaries, including parking areas. For locations not within a regional shopping mall, the Protected Area is defined as a radius not exceeding 2 miles drawn from the front door of The Counter restaurant.
Staffing Notes
MTY Franchising USA, Inc. requires each The Counter restaurant to be personally managed with on-premises supervision by the franchisee, another principal, or a manager who has completed the Training Program. Managers must meet specific criteria as qualified restaurant operators and are required to devote their full-time attention to the business. All personnel employed by the franchisee must maintain high standards of sanitation, cleanliness, and demeanor, and wear designated uniforms. Employees whose duties involve customer service must possess sufficient literacy and fluency in English (or the primary language of the market) to adequately serve the public.