Risk Score
Pending analysis
Investment Range
$62,000 - $712,450
Franchise Fee
$7,500
Total US Locations
425
Business Summary
Wetzel's Pretzels operates bakeries specializing in hand-rolled soft fresh-baked pretzels, hot dogs, and beverages. The company offers two main franchise programs: a traditional retail bakery (Bakery) and a mobile concession truck or trailer. The Bakeries are typically located in malls, shopping centers, or streetside locations. The Concession Trucks or Trailers operate from a self-contained mobile unit within a specified mobile area. Wetzel's Pretzels may also sell frozen products at wholesale or license their sale for on-site consumption.
Corporate History
Wetzel's Pretzels, LLC was officially organized in California on August 7, 1995, though its management began operating a similar business concept in November 1994. The company started offering franchises in April 1996. In 2007, Wetzel's Pretzels was acquired by Pretzel Holding Corporation, a subsidiary of Pretzel Parent Holding Corporation. This ownership changed again in August 2016 when COP WP Holding, Inc. acquired Pretzel Parent Holding Corporation. Most recently, on December 8, 2022, MTY Franchising USA, Inc. (MTY USA) acquired the Wetzel's Pretzels brand, making MTY USA the current parent company, which is itself a subsidiary of MTY Food Group, Inc., a publicly traded Canadian corporation. In 2022, Wetzel's Pretzels expanded its franchise offerings to include an expanded menu.
Financial Overview
Investment Range
$62,000 - $712,450
Franchise Fee (Low)
$7,500
Franchise Fee (High)
$40,000
Royalty %
7%
Marketing %
1%
Equipment Costs (Low)
$57,000
Equipment Costs (High)
$495,000
Working Capital
$40,250
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
MTY Franchising USA, Inc., the parent company and guarantor for Wetzel's Pretzels, provides audited financial statements that received an unqualified opinion, indicating that its financial position is presented fairly. In 2024, MTY Franchising USA, Inc. reported a net loss of $12.56 million, contrasting with a net income of $16.98 million in 2023. The company maintains a healthy financial standing with current assets of $274.19 million and current liabilities of $212.27 million as of November 30, 2024, demonstrating positive working capital. The auditors did not identify any substantial doubt regarding the company's ability to continue as a going concern.
Financing Details
Wetzel's Pretzels does not offer any direct or indirect financing options to its franchisees. Additionally, Wetzel's Pretzels will not guarantee any notes, leases, or other obligations for franchisees.
Performance Metrics
Total US Locations
425
Franchised Units
389
Corporate Units
36
Avg Square Footage
700
Franchising Since
1996
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
20
Litigation Summary
Wetzel's Pretzels and its affiliates have been involved in a total of 20 litigation and administrative actions. Most of these cases are historical, dating from 1992 through 2021, and have been resolved through settlements or dismissals. These past cases involved various allegations such as violations of franchise investment protection acts, misrepresentation, breach of contract, fraud, trademark infringement, and bankruptcy. For example, a franchisee filed an arbitration against Wetzel's Pretzels in 2019 alleging intentional and negligent misrepresentation, which was settled in September 2021. More recently, during the fiscal year ending November 30, 2024, an affiliate, Kahala Franchising, LLC, filed two new lawsuits for breach of contract against franchisees in Illinois and Iowa.
Bankruptcy History
Wetzel's Pretzels has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise, Wetzel's Pretzels franchisees must be in good standing, give timely notice, and sign a new franchise agreement which may have materially different terms and conditions. They must also remodel their Bakery or Concession Truck/Trailer and its equipment to meet current standards, renew their lease or sublease, agree to employ an approved general contractor and/or construction manager, complete any required supplemental training, pay a renewal fee, and sign a general release of claims. If a franchisee subleases their premises from Wetzel's Pretzels, the franchisor is not obligated to renew its master lease, and it becomes the franchisee's responsibility to secure a new direct lease.
Training & Support Program
Franchisor Assistance
Wetzel's Pretzels provides various forms of assistance to its franchisees. Before opening, this includes a construction manual for building out the Bakery or designing the Concession Truck/Trailer, an initial training program for up to three members of the franchisee's management team, and access to a Manual with operational instructions and approved suppliers. For Bakeries, Wetzel's Pretzels assists with site selection and lease negotiation. After opening, ongoing support includes continuing education programs offered at the bi-annual convention, consultation services from the operations team (with franchisees reimbursing direct costs), and administration of an advertising fund. Wetzel's Pretzels also endeavors to ensure a continuous supply of proprietary products and requires franchisees to use its designated point-of-sale and loyalty programs.
Initial Training Hours
80
Training Location
Classroom training is provided at the corporate training center in Pasadena, California, or via videoconference in rare cases. On-the-job training occurs at one of four company-owned Bakeries located in Southern California, Denver, Colorado, Orlando, Florida, or Las Vegas, Nevada.
Ongoing Support
Wetzel's Pretzels provides ongoing support through several channels. Franchisees are offered continuing education programs at a bi-annual convention, for which a registration fee is charged. The operations team is available for consultation, with franchisees covering direct costs. Wetzel's Pretzels also manages an advertising fund, strives to ensure the availability of proprietary products, and mandates the use of its point-of-sale system and loyalty programs. Additionally, the franchisor conducts periodic quality assurance inspections and utilizes a secret shopper service to monitor business performance.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Protected
Staff Count
9
Territory Size Requirements
For Bakeries, Wetzel's Pretzels grants a protected area that is the smaller of a one-half mile radius around the approved location or the shopping center/mall where the Bakery operates. For Concession Trucks or Trailers, a mobile area is assigned, typically with a population of approximately 500,000 to 2,000,000 people. These mobile areas can be defined by geographic boundaries like zip codes, city, county, specific streets, or highways. Wetzel's Pretzels determines the appropriate size and location of the mobile area at its sole discretion, and there is no guarantee it will meet the typical population figures.
Staffing Notes
Wetzel's Pretzels suggests a typical staff of 3 full-time and 6 part-time employees for both Bakeries and Concession Trucks or Trailers. Franchisees are solely responsible for hiring, scheduling, compensating, and managing their employees, and Wetzel's Pretzels explicitly states it is not a joint or co-employer. The Designated Manager, who can be the owner or another certified employee, must devote at least 40 hours per week to on-premises management and be present whenever the business is open. For Concession Trucks or Trailers, a driver with a minimum Class B Commercial Driver's License is required for moving the unit.