Franchises and Business Ideas · franchise

Should I open or buy a Wahlburgers franchise in 2027?

👁 0 views📖 2,214 words⏱ 10 min read📅 Published Jun 9, 2026

Direct Answer

Probably not — unless you already operate 5+ profitable casual-dining units, have $5M+ liquid net worth, and can secure a true high-traffic urban/sports-venue site that is NOT inside a grocery store or suburban mall. Wahlburgers shed 79 of ~110 U.S. Locations in 2025 after the Hy-Vee in-grocery model collapsed, leaving roughly 34 restaurants standing.

Real-world economics: $1.14M-$2.78M all-in build, $40K franchise fee + $10K development fee, 6% royalty + 1% marketing fee, and a celebrity-burger category that lost pricing power as beef costs rose 30%+ since 2020. Conservative Year-1 cash flow on a $1.7M AUV unit is roughly -$50K to +$120K EBITDA, with payback realistically 7-10 years at the median — and that assumes you avoid the failure pattern that just wiped out two-thirds of the system.

The Real Numbers

Wahlburgers is a multi-unit-only opportunity (no single-store franchisees) with a $5M minimum net worth and $1M liquid requirement. The brand is in active system contraction, which materially changes the underwriting versus a growing concept. Use the figures below as the 2027 underwriting floor, not the marketing floor.

Line Item	Real 2027 Number	Source
Initial franchise fee	$40,000 per unit	FDD Item 5
Area development fee	$10,000 per unit	FDD Item 5
Total initial investment (Item 7)	$1,140,000 - $2,755,000	FDD Item 7
Royalty fee	6.0% of gross sales	FDD Item 6
Brand fund / marketing fee	1.0% of gross sales	FDD Item 6
Local marketing minimum	~2% of gross sales	FDD Item 6
Net worth requirement	$5,000,000	FDD Item 7 supplement
Liquid capital requirement	$1,000,000	Franchisor
Minimum units (multi-unit only)	3-5 unit agreement	FDD Item 1
System size (post-closures)	~34 U.S. units (down from ~110)	2025 closure reporting
Hy-Vee in-grocery units closed (2025)	79	So Yummy / Food Republic
Estimated AUV (free-standing, post-rationalization)	$1.5M - $2.0M	Industry comparables; brand has not published Item 19 AUV publicly
Industry EBITDA margin (full-service burger, 2027)	6% - 12%	IBISWorld 72211
Conservative Year-1 store-level EBITDA	-$50K to +$200K	Modeled from $1.7M AUV at 8% margin minus royalty/marketing
Realistic payback	7 - 10 years (median operator)	Modeled

The math problem is structural: a $2M build at a $1.7M AUV running at industry-median 8% restaurant-level margin yields roughly $136K in store-level EBITDA, *before* G&A, debt service, and the 7%+ royalty/marketing stack. Subtract those and most units run at breakeven to mid-five-figure cash flow in Year 1-2.

Compare that to Whataburger ($3.69M AUV), Culver's ($3.4M+), or even Five Guys ($1.4M but on a $400K-$700K build) and the capital efficiency is poor.

flowchart TD A[Inquiry] --> B{Multi-unit operator with $5M net worth?} B -- No --> Z[Disqualified — brand only accepts multi-unit groups] B -- Yes --> C{Site is free-standing, urban, OR sports/entertainment venue?} C -- In a grocery store --> Y[STOP — this is the model that just lost 79 units] C -- Suburban mall --> X[High risk — closure pattern] C -- Yes free-standing --> D{Local beef + labor cost trajectory modeled at +5%/yr?} D -- No --> W[Re-underwrite before signing] D -- Yes --> E{AUV pro-forma at $1.5M conservative case?} E -- Cash flow positive --> F[Proceed to FDD legal review + Item 20 outlet table] E -- Negative --> V[Walk away or renegotiate site economics] F --> G{Item 20 shows net unit growth in last 24 months?} G -- No still contracting --> U[Demand reduced franchise fee + royalty abatement] G -- Yes --> H[Sign 3-unit ADA, open Unit 1, hit AUV before Unit 2]

Who Wins With This Business

The winners are a narrow profile. Existing multi-brand restaurant operators with 5+ casual-dining units who already have a back-office, a regional supply chain, and a labor bench can absorb a Wahlburgers location as a portfolio play — they treat the 6% royalty plus 1% marketing fee as the cost of borrowing a celebrity brand for a specific real-estate window.

Operators who control a legitimate destination site — think downtown sports-arena adjacency, airport terminal, casino floor, or a beach-boardwalk anchor — can lift the AUV to $2.5M+ where the unit economics finally clear the hurdle rate.

International master-franchise operators in markets where the Mark Wahlberg / Entourage cultural footprint still commands a premium (Middle East, parts of Southeast Asia, Australia) have historically outperformed the U.S. System; the brand's surviving openings in 2025-2026 skew international.

Sophisticated family offices treating a 3-5 unit ADA as a real-estate-plus-brand arbitrage — buying the land, building the box, and signing a 20-year ground lease back to the operating entity — can engineer a return through the real estate even when the restaurant itself underperforms.

Who Loses With This Business

First-time franchisees lose immediately — the brand will not even take their application; the multi-unit requirement is a hard gate. Single-unit operators who slipped in before the policy tightened are the dominant loser cohort, and the 79 closures in 2025 disproportionately hit operators with one or two Hy-Vee locations who had no portfolio cushion when traffic collapsed.

Suburban-mall operators lose structurally. The post-pandemic foot-traffic decline in Class B and Class C malls is permanent, and a $1.7M-build burger restaurant cannot survive on weekend-only volume. In-grocery operators are now extinct — the Hy-Vee experiment is the cautionary tale every prospective franchisee should read first.

Operators who underwrite at the marketing-deck $2.5M AUV instead of a $1.5M conservative case lose Year 1 cash and spend Year 2 servicing personal-guarantee debt.

Anyone who believes celebrity-brand affinity equals repeat traffic loses. Wahlburgers' problem is not awareness — it is the value-perception gap: a $14 burger, $5 fries, $4 soda check in a category where Five Guys, Shake Shack, and Smashburger have set the ceiling at $17-19 with comparable or better food quality and a third the build cost.

2027 Market Conditions

Three forces define the 2027 underwriting environment. First, the better-burger category is over-stored. Shake Shack (550+ units), Five Guys (1,700+), Smashburger, BurgerFi, Mooyah, and Habit Burger together added roughly 800 net U.S. Locations from 2020-2026 while traffic-per-unit fell.

Wahlburgers' 79-unit contraction is not idiosyncratic — it is the trailing edge of a category shakeout where the weakest concepts lose first.

Second, beef commodity pricing is structurally elevated. USDA reports ground beef prices up roughly 30% from 2020 levels through 2026, with no near-term relief — the U.S. Cattle herd is at a 70-year low and rebuilding takes 3-5 years. A burger concept with 6%+7% in fees on top of 30%+ food cost has very little margin oxygen.

Third, labor cost floors keep rising. State minimum-wage indexing in California ($20 fast-food floor), New York, Washington, and a dozen other states means a $1.7M AUV unit now carries $450K-$550K in fully-loaded labor, versus $350K-$400K pre-pandemic. The 2027 buyer is signing a 6-7% royalty stack into a 6-12% margin business during a category contraction — that is the deal as it actually sits.

The 90-Day Decision Tree

Days 1-10: Confirm gate eligibility. Verify $5M+ documented net worth and $1M+ liquid (not in retirement accounts). Confirm you already operate 3+ restaurant units, ideally casual-dining or QSR. If either is false, stop here — you will not be approved.
Days 11-20: Request the current FDD directly from Wahlburgers franchise development. Read Item 3 (litigation), Item 4 (bankruptcy), Item 19 (financial performance representations), Item 20 (unit count tables for last 3 years — this will show the contraction), and Item 21 (audited financials of the franchisor).
Days 21-30: Pull and call 10+ current franchisees from the Item 20 contact list, and 5+ former franchisees from the closures. Ask: actual AUV, food cost %, labor %, total occupancy, royalty/marketing burden, and "would you sign again."
Days 31-45: Site underwriting. Identify 3-5 candidate sites. Pull traffic counts, demographic income medians ($85K+ HHI inside 3 miles), competing-concept count, and rent-to-sales ratio (target under 8%, walk above 10%).
Days 46-60: Build a 60-month pro-forma with three scenarios: pessimistic ($1.2M AUV), base ($1.7M), upside ($2.3M). Stress-test debt service at SBA 7(a) prime + 2.75% (currently ~10%) on a $1.5M loan.
Days 61-75: Legal review of the FDD with a franchise attorney ($5K-$10K spend). Specifically negotiate the territory-protection language, the area-development schedule (push opening dates out), and any royalty-abatement during ramp.
Days 76-90: Either sign the ADA with concessions in hand (reduced franchise fee, royalty step-up over 24 months, extended development schedule) or walk away and redeploy capital. Do not sign at sticker.

Alternative Plays

If the goal is a burger franchise, the better 2027 math is Five Guys ($419K-$1.4M build, 6% royalty, $1.4M AUV — capital efficiency wins) or Mooyah ($420K-$823K build, lower-risk single-unit available). If the goal is celebrity-restaurant beta, look at Walk-On's Sports Bistreaux (Drew Brees/Saints partnership, $2.5M-$5.6M build but $4.5M+ AUV) — the build is bigger but the AUV pays for itself.

If the goal is an independent better-burger concept rather than franchising, the unit economics typically beat Wahlburgers: a $600K-$900K independent build at $1.2M AUV with no 7% royalty stack produces meaningfully better cash-on-cash returns. The trade is brand awareness and supply-chain scale — recoverable through smart local marketing for a multi-unit operator.

If the goal is passive restaurant exposure, buy the Shake Shack (SHAK) or Wingstop (WING) equity rather than franchising; the public-equity returns over 2020-2026 dwarf franchisee cash-on-cash for most operators.

flowchart LR A[Wahlburgers $1.14M-$2.76M, 6%+1%, $1.7M AUV] --> B[Capital efficiency: poor] C[Five Guys $419K-$1.4M, 6%, $1.4M AUV] --> D[Capital efficiency: strong] E[Mooyah $420K-$823K, 6%, $900K AUV] --> F[Capital efficiency: moderate] G[Walk-On's $2.5M-$5.6M, 5%, $4.5M AUV] --> H[Capital efficiency: strong if site is right] I[Independent better-burger $600K-$900K] --> J[Capital efficiency: best for multi-unit operators] B --> K[Choose only if you control a destination site] D --> K F --> K H --> K J --> K

FAQ

How much does it actually cost to open a Wahlburgers franchise in 2027?

Total initial investment per FDD Item 7 runs $1,140,000 to $2,755,000 all-in, including the $40,000 franchise fee plus $10,000 development fee. That range covers build-out, equipment, furniture, signage, training, opening inventory, and 3 months of working capital. The variance is mostly real estate — a free-standing build with land work hits the high end, a second-generation restaurant conversion in an existing shell hits the low end.

Plan for 20% contingency above the high end of the range on any first build.

Is Wahlburgers actually closing locations?

Yes. Wahlburgers closed 79 U.S. Locations in 2025, the majority of which were inside Hy-Vee grocery stores after the franchising agreement between the two companies ended.

The system contracted from roughly 110 U.S. Units to approximately 34. This is documented in Food Republic, Yahoo News, So Yummy, and Parade reporting.

Any 2027 prospective franchisee must review the franchisor's most recent FDD Item 20 unit-count table to see the contraction directly.

What is the royalty fee and what do I get for it?

Wahlburgers charges a 6% royalty fee on gross sales plus a 1% brand fund (marketing) contribution, with a typical 2% local marketing minimum on top — a fully loaded 9% of gross sales going to brand and marketing. In return, franchisees receive use of the Wahlburgers trademarks, the Mark/Donnie/Paul Wahlberg celebrity association, the menu and recipes, training systems, supply-chain agreements, and national PR halo.

Whether 9% of sales is fair value is the central underwriting question.

Can I open just one Wahlburgers location?

No. The franchisor only accepts multi-unit franchisee groups with a $5,000,000 minimum net worth and $1,000,000 in liquid capital. Expect to sign an area development agreement (ADA) for 3-5 units with a defined opening schedule, typically one unit per 12-18 months.

This policy was tightened after the 2025 closures because single-unit operators had no portfolio cushion when the Hy-Vee locations failed. The brand explicitly wants sophisticated, capitalized operators going forward.

What is the realistic payback period?

7 to 10 years for the median operator at a $1.7M AUV, 5-7 years for a top-quartile destination site at $2.3M+ AUV, and never for a bottom-quartile suburban site at $1.2M AUV (those units typically close before payback). This is materially worse than Five Guys (4-6 year payback at half the build cost) or Chick-fil-A (2-3 years, but operator selection is brutally selective).

Run your own pro-forma using the conservative case and never the marketing-deck case.

Bottom Line

Wahlburgers in 2027 is a portfolio-only, destination-site-only opportunity for sophisticated multi-unit operators, and even then the math is tighter than most alternatives. The 79-unit Hy-Vee collapse is the single most important data point any prospective franchisee needs to absorb — the brand just demonstrated that its in-grocery and suburban-mall placements do not work, and the surviving 34 units are disproportionately the destination locations that any new operator now has to replicate.

For most readers — first-time franchisees, single-unit operators, suburban-mall sites — the answer is no. For the narrow profile that fits the gate, the answer is maybe, with a 90-day diligence sprint and negotiated concessions on the ADA. **Do not sign at sticker.

Do not skip Item 19 and Item 20 reviews. Do not underwrite the upside case.**

Sources

Keep reading

## Direct Answer

**Probably not — unless you already operate 5+ profitable casual-dining units, have $5M+ liquid net worth, and can secure a true high-traffic urban/sports-venue site that is NOT inside a grocery store or suburban mall.** Wahlburgers shed **79 of ~110 U.S. Locations in 2025** after the Hy-Vee in-grocery model collapsed, leaving roughly **34 restaurants** standing. Real-world economics: **$1.14M-$2.78M all-in build**, **$40K franchise fee + $10K development fee**, **6% royalty + 1% marketing fee**, and a celebrity-burger category that lost pricing power as beef costs rose **30%+ since 2020**. Conservative Year-1 cash flow on a $1.7M AUV unit is **roughly -$50K to +$120K EBITDA**, with **payback realistically 7-10 years** at the median — and that assumes you avoid the failure pattern that just wiped out two-thirds of the system.

## The Real Numbers

Wahlburgers is a **multi-unit-only opportunity** (no single-store franchisees) with a **$5M minimum net worth and $1M liquid** requirement. The brand is in active **system contraction**, which materially changes the underwriting versus a growing concept. Use the figures below as the **2027 underwriting floor**, not the marketing floor.

| Line Item | Real 2027 Number | Source |
|---|---|---|
| **Initial franchise fee** | $40,000 per unit | FDD Item 5 |
| **Area development fee** | $10,000 per unit | FDD Item 5 |
| **Total initial investment (Item 7)** | **$1,140,000 - $2,755,000** | FDD Item 7 |
| **Royalty fee** | **6.0% of gross sales** | FDD Item 6 |
| **Brand fund / marketing fee** | **1.0% of gross sales** | FDD Item 6 |
| **Local marketing minimum** | ~2% of gross sales | FDD Item 6 |
| **Net worth requirement** | **$5,000,000** | FDD Item 7 supplement |
| **Liquid capital requirement** | $1,000,000 | Franchisor |
| **Minimum units (multi-unit only)** | 3-5 unit agreement | FDD Item 1 |
| **System size (post-closures)** | **~34 U.S. units** (down from ~110) | 2025 closure reporting |
| **Hy-Vee in-grocery units closed (2025)** | **79** | So Yummy / Food Republic |
| **Estimated AUV (free-standing, post-rationalization)** | **$1.5M - $2.0M** | Industry comparables; brand has not published Item 19 AUV publicly |
| **Industry EBITDA margin (full-service burger, 2027)** | **6% - 12%** | IBISWorld 72211 |
| **Conservative Year-1 store-level EBITDA** | **-$50K to +$200K** | Modeled from $1.7M AUV at 8% margin minus royalty/marketing |
| **Realistic payback** | **7 - 10 years** (median operator) | Modeled |

The math problem is structural: **a $2M build at a $1.7M AUV** running at industry-median 8% restaurant-level margin yields roughly **$136K in store-level EBITDA**, *before* G&A, debt service, and the 7%+ royalty/marketing stack. Subtract those and most units run at **breakeven to mid-five-figure cash flow** in Year 1-2. Compare that to Whataburger ($3.69M AUV), Culver's ($3.4M+), or even Five Guys ($1.4M but on a $400K-$700K build) and the **capital efficiency is poor**.

```mermaid
flowchart TD
    A[Inquiry] --> B{Multi-unit operator with $5M net worth?}
    B -- No --> Z[Disqualified — brand only accepts multi-unit groups]
    B -- Yes --> C{Site is free-standing, urban, OR sports/entertainment venue?}
    C -- In a grocery store --> Y[STOP — this is the model that just lost 79 units]
    C -- Suburban mall --> X[High risk — closure pattern]
    C -- Yes free-standing --> D{Local beef + labor cost trajectory modeled at +5%/yr?}
    D -- No --> W[Re-underwrite before signing]
    D -- Yes --> E{AUV pro-forma at $1.5M conservative case?}
    E -- Cash flow positive --> F[Proceed to FDD legal review + Item 20 outlet table]
    E -- Negative --> V[Walk away or renegotiate site economics]
    F --> G{Item 20 shows net unit growth in last 24 months?}
    G -- No still contracting --> U[Demand reduced franchise fee + royalty abatement]
    G -- Yes --> H[Sign 3-unit ADA, open Unit 1, hit AUV before Unit 2]
```

## Who Wins With This Business

The winners are a narrow profile. **Existing multi-brand restaurant operators with 5+ casual-dining units** who already have a back-office, a regional supply chain, and a labor bench can absorb a Wahlburgers location as a portfolio play — they treat the **6% royalty plus 1% marketing fee** as the cost of borrowing a celebrity brand for a specific real-estate window. Operators who control a **legitimate destination site** — think downtown sports-arena adjacency, airport terminal, casino floor, or a beach-boardwalk anchor — can lift the AUV to **$2.5M+** where the unit economics finally clear the hurdle rate.

**International master-franchise operators** in markets where the Mark Wahlberg / Entourage cultural footprint still commands a premium (Middle East, parts of Southeast Asia, Australia) have historically outperformed the U.S. System; the brand's surviving openings in 2025-2026 skew international. **Sophisticated family offices** treating a 3-5 unit ADA as a real-estate-plus-brand arbitrage — buying the land, building the box, and signing a 20-year ground lease back to the operating entity — can engineer a return through the real estate even when the restaurant itself underperforms.

## Who Loses With This Business

**First-time franchisees lose immediately** — the brand will not even take their application; the multi-unit requirement is a hard gate. **Single-unit operators who slipped in before the policy tightened are the dominant loser cohort**, and the 79 closures in 2025 disproportionately hit operators with one or two Hy-Vee locations who had no portfolio cushion when traffic collapsed.

**Suburban-mall operators** lose structurally. The post-pandemic foot-traffic decline in Class B and Class C malls is permanent, and a $1.7M-build burger restaurant cannot survive on weekend-only volume. **In-grocery operators are now extinct** — the Hy-Vee experiment is the cautionary tale every prospective franchisee should read first. **Operators who underwrite at the marketing-deck $2.5M AUV** instead of a $1.5M conservative case lose Year 1 cash and spend Year 2 servicing personal-guarantee debt.

Anyone who believes **celebrity-brand affinity equals repeat traffic** loses. Wahlburgers' problem is not awareness — it is the **value-perception gap**: a $14 burger, $5 fries, $4 soda check in a category where Five Guys, Shake Shack, and Smashburger have set the ceiling at $17-19 with comparable or better food quality and a third the build cost.

## 2027 Market Conditions

Three forces define the 2027 underwriting environment. **First, the better-burger category is over-stored.** Shake Shack (550+ units), Five Guys (1,700+), Smashburger, BurgerFi, Mooyah, and Habit Burger together added roughly 800 net U.S. Locations from 2020-2026 while traffic-per-unit fell. **Wahlburgers' 79-unit contraction is not idiosyncratic** — it is the trailing edge of a category shakeout where the weakest concepts lose first.

**Second, beef commodity pricing is structurally elevated.** USDA reports ground beef prices up roughly **30% from 2020 levels** through 2026, with no near-term relief — the U.S. Cattle herd is at a 70-year low and rebuilding takes 3-5 years. A burger concept with **6%+7% in fees on top of 30%+ food cost** has very little margin oxygen.

**Third, labor cost floors keep rising.** State minimum-wage indexing in California ($20 fast-food floor), New York, Washington, and a dozen other states means a $1.7M AUV unit now carries **$450K-$550K in fully-loaded labor**, versus $350K-$400K pre-pandemic. The 2027 buyer is signing a **6-7% royalty stack into a 6-12% margin business** during a category contraction — that is the deal as it actually sits.

## The 90-Day Decision Tree

1. **Days 1-10: Confirm gate eligibility.** Verify $5M+ documented net worth and $1M+ liquid (not in retirement accounts). Confirm you already operate 3+ restaurant units, ideally casual-dining or QSR. If either is false, **stop here** — you will not be approved.
2. **Days 11-20: Request the current FDD directly from Wahlburgers franchise development.** Read **Item 3** (litigation), **Item 4** (bankruptcy), **Item 19** (financial performance representations), **Item 20** (unit count tables for last 3 years — this will show the contraction), and **Item 21** (audited financials of the franchisor).
3. **Days 21-30: Pull and call 10+ current franchisees** from the Item 20 contact list, and **5+ former franchisees** from the closures. Ask: actual AUV, food cost %, labor %, total occupancy, royalty/marketing burden, and "would you sign again."
4. **Days 31-45: Site underwriting.** Identify 3-5 candidate sites. Pull traffic counts, demographic income medians ($85K+ HHI inside 3 miles), competing-concept count, and rent-to-sales ratio (target **under 8%**, walk above 10%).
5. **Days 46-60: Build a 60-month pro-forma** with three scenarios: pessimistic ($1.2M AUV), base ($1.7M), upside ($2.3M). Stress-test debt service at SBA 7(a) **prime + 2.75% (currently ~10%)** on a $1.5M loan.
6. **Days 61-75: Legal review of the FDD with a franchise attorney** ($5K-$10K spend). Specifically negotiate the territory-protection language, the area-development schedule (push opening dates out), and any royalty-abatement during ramp.
7. **Days 76-90: Either sign the ADA with concessions in hand** (reduced franchise fee, royalty step-up over 24 months, extended development schedule) **or walk away** and redeploy capital. Do not sign at sticker.

## Alternative Plays

If the goal is a **burger franchise**, the better 2027 math is **Five Guys** ($419K-$1.4M build, 6% royalty, $1.4M AUV — capital efficiency wins) or **Mooyah** ($420K-$823K build, lower-risk single-unit available). If the goal is **celebrity-restaurant beta**, look at **Walk-On's Sports Bistreaux** (Drew Brees/Saints partnership, $2.5M-$5.6M build but $4.5M+ AUV) — the build is bigger but the AUV pays for itself.

If the goal is **an independent better-burger concept** rather than franchising, the unit economics typically beat Wahlburgers: a **$600K-$900K independent build** at $1.2M AUV with no 7% royalty stack produces meaningfully better cash-on-cash returns. The trade is brand awareness and supply-chain scale — recoverable through smart local marketing for a multi-unit operator.

If the goal is **passive restaurant exposure**, **buy the Shake Shack (SHAK) or Wingstop (WING) equity** rather than franchising; the public-equity returns over 2020-2026 dwarf franchisee cash-on-cash for most operators.

```mermaid
flowchart LR
    A[Wahlburgers $1.14M-$2.76M, 6%+1%, $1.7M AUV] --> B[Capital efficiency: poor]
    C[Five Guys $419K-$1.4M, 6%, $1.4M AUV] --> D[Capital efficiency: strong]
    E[Mooyah $420K-$823K, 6%, $900K AUV] --> F[Capital efficiency: moderate]
    G[Walk-On's $2.5M-$5.6M, 5%, $4.5M AUV] --> H[Capital efficiency: strong if site is right]
    I[Independent better-burger $600K-$900K] --> J[Capital efficiency: best for multi-unit operators]
    B --> K[Choose only if you control a destination site]
    D --> K
    F --> K
    H --> K
    J --> K
```

## FAQ

### How much does it actually cost to open a Wahlburgers franchise in 2027?

Total initial investment per FDD Item 7 runs **$1,140,000 to $2,755,000** all-in, including the **$40,000 franchise fee plus $10,000 development fee**. That range covers build-out, equipment, furniture, signage, training, opening inventory, and **3 months of working capital**. The variance is mostly real estate — a free-standing build with land work hits the high end, a second-generation restaurant conversion in an existing shell hits the low end. Plan for **20% contingency** above the high end of the range on any first build.

### Is Wahlburgers actually closing locations?

Yes. Wahlburgers closed **79 U.S. Locations in 2025**, the majority of which were inside **Hy-Vee grocery stores** after the franchising agreement between the two companies ended. The system contracted from roughly **110 U.S. Units to approximately 34**. This is documented in Food Republic, Yahoo News, So Yummy, and Parade reporting. Any 2027 prospective franchisee must review the franchisor's most recent **FDD Item 20 unit-count table** to see the contraction directly.

### What is the royalty fee and what do I get for it?

Wahlburgers charges a **6% royalty fee on gross sales** plus a **1% brand fund (marketing) contribution**, with a typical **2% local marketing minimum** on top — a fully loaded **9% of gross sales** going to brand and marketing. In return, franchisees receive use of the Wahlburgers trademarks, the Mark/Donnie/Paul Wahlberg celebrity association, the menu and recipes, training systems, supply-chain agreements, and national PR halo. Whether 9% of sales is fair value is the central underwriting question.

### Can I open just one Wahlburgers location?

**No.** The franchisor only accepts **multi-unit franchisee groups** with a **$5,000,000 minimum net worth** and **$1,000,000 in liquid capital**. Expect to sign an **area development agreement (ADA) for 3-5 units** with a defined opening schedule, typically one unit per 12-18 months. This policy was tightened after the 2025 closures because single-unit operators had no portfolio cushion when the Hy-Vee locations failed. The brand explicitly wants sophisticated, capitalized operators going forward.

### What is the realistic payback period?

**7 to 10 years** for the median operator at a $1.7M AUV, **5-7 years** for a top-quartile destination site at $2.3M+ AUV, and **never** for a bottom-quartile suburban site at $1.2M AUV (those units typically close before payback). This is materially worse than Five Guys (4-6 year payback at half the build cost) or Chick-fil-A (2-3 years, but operator selection is brutally selective). Run your own pro-forma using the conservative case and never the marketing-deck case.

## Bottom Line

Wahlburgers in 2027 is a **portfolio-only, destination-site-only opportunity for sophisticated multi-unit operators**, and even then the math is tighter than most alternatives. The **79-unit Hy-Vee collapse is the single most important data point** any prospective franchisee needs to absorb — the brand just demonstrated that its in-grocery and suburban-mall placements do not work, and the surviving 34 units are disproportionately the destination locations that any new operator now has to replicate. For most readers — first-time franchisees, single-unit operators, suburban-mall sites — **the answer is no**. For the narrow profile that fits the gate, the answer is **maybe, with a 90-day diligence sprint and negotiated concessions** on the ADA. **Do not sign at sticker. Do not skip Item 19 and Item 20 reviews. Do not underwrite the upside case.**

## Sources

- [Wahlburgers Franchise Insights: FDD, Costs & Fees — VettedBiz](https://www.vettedbiz.com/franchises/wahlburgers)
- [Wahlburgers Franchise FDD, Costs & Fees (2026) — Franchise Payback](https://www.franchisepayback.com/franchise/wahlburgers)
- [Wahlburgers Franchise FDD, Profits & Costs — SharpSheets](https://sharpsheets.io/blog/wahlburgers-franchise-fdd-profits-costs/)
- [Wahlburgers Closes 79 Locations Amid Grocery Deal Failure — So Yummy](https://soyummy.com/fast-food/wahlburgers-closes-79-locations-grocery-deal-failure/)
- [Is Wahlburgers Closing Locations In 2025? — Food Republic](https://www.foodrepublic.com/1819513/wahlburgers-burger-chain-closing-locations-2025/)
- [Celebrity-backed burger chain closes 79 locations nationwide — 614NOW](https://614now.com/2025/food-drink/celebrity-backed-burger-chain-closes-79-locations-nationwide)
- [Popular Burger Chain Falls Victim to Widespread 2025 Closures — Parade](https://parade.com/news/popular-burger-chain-falls-victim-to-widespread-closures)
- [Wahlburgers Franchise Cost & Opportunities — Franchise Help](https://www.franchisehelp.com/franchises/wahlburgers/)
- [Wahlburgers Franchise Review — FranchiseGrade](https://www.franchisegrade.com/franchises/wahlburgers)
- [A List of Every Major Burger Franchise: AUV, Costs, and More 2026 — Jack in the Box Franchising](https://www.jackintheboxfranchising.com/blog/a-list-of-every-major-burger-franchise.-auv-costs-and-more-2026)
- [Comparison of Franchised Burger Brands Unit Sales Volume — The Franchise Courier](https://thefranchisecourier.com/comparison-of-franchised-burger-brands-unit-sales-volume/)
- [IBISWorld Industry Report 72211 — Full-Service Restaurants in the U.S.](https://www.ibisworld.com/united-states/market-research-reports/full-service-restaurants-industry/)

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