BurgerFi

Item 7 pegs initial investment at $704,750-$1,171,500, including a $35,000 franchise fee, with ongoing royalties at 5.5% of gross sales plus 4% marketing (2% national fund, 2% local) and $279 monthly fixed fees for tech and loyalty programs. Item 19 discloses strong performance: average gross revenue of $1,258,412 and median $1,241,071 across units, suggesting solid traffic for natural Angus burgers and craft beers. However, no profit figures are provided, so operators face typical fast-casual margins after 9.5%+ fees, labor, and food costs—potentially 10-15% EBITDA if efficiencies hold, but breakeven could take 2-3 years given the high end of startup costs.

System health raises red flags: total locations dropped from 77 in 2023 to 65 in 2024 (-16%), with only 66 franchised and 16 corporate-owned, 20 terminations, 2 transfers, and just 2 projected new units per Item 20. Litigation history (Item 3) involves franchisee suits over inducement, development failures, and standards breaches, atop confirmed bankruptcies. SBA data shows 22 loans averaging $667,391, indicating financing access but underscoring capital intensity in a competitive burger segment. For investors, the revenue allure tempts, but shrinkage and disputes signal execution risks—approach with eyes wide open.