Should I open or buy a MOD Pizza franchise in 2027?

👁 0 views📖 2,294 words⏱ 10 min read📅 Published Jun 4, 2026

Direct Answer

Probably not — unless you can buy an existing MOD Pizza location from Elite Restaurant Group's refranchising program at a deep discount (think 30-50% below build-out cost) AND you already operate restaurants in your market. As of mid-2026, MOD Pizza is a distressed refranchising play, not a greenfield growth story.

The brand closed 70 units in 2024, another 28+ in 2025, and ended 2025 with roughly 454 units down from a peak of 552. Item 7 says a new MOD costs $891,644 to $1,193,006 (plus a $30,000 franchise fee), but the 2026 FDD has NO Item 19 — meaning MOD will not publish unit-level financial performance.

With fast-casual pizza AUVs stuck near $1.2M industry-wide and a 5% royalty plus 3% marketing fee, your conservative Year-1 cash flow is $40K-$90K against an 8-11 year payback on a new build. Breakeven on a new ground-up unit: 36-48 months.

The Real Numbers

MOD Pizza's 2026 Franchise Disclosure Document (filed mid-2025 with state regulators in California, Minnesota, Virginia, and Washington) tells the story in two pieces: what it costs to get in and what the franchisor will not tell you about earnings. Both matter.

Startup costs — Item 7 (2026 FDD). A new in-line MOD Pizza runs $891,644 to $1,193,006 all-in, with end-cap pad sites at the high end. Third-party broker compilations from vetmyfranchise.com, franchisepayback.com, and vettedbiz.com show similar ranges around $859K-$1.25M.

Earnings — Item 19 (2026 FDD). MOD Pizza does not disclose an Item 19 in the current FDD. This is the single biggest red flag in the deck. Healthy franchisors brag about AUV; distressed ones go silent.

Industry comp: fast-casual pizza averages $1.2M AUV per Nation's Restaurant News; Blaze Pizza traditional franchised units posted $1.3M in their last public disclosure.

Line Item	Amount (2027 USD)	Source
Initial franchise fee	$30,000	MOD 2026 FDD Item 5
Real estate / lease deposits	$30,000-$75,000	FDD Item 7
Build-out & leasehold improvements	$400,000-$550,000	FDD Item 7
Equipment & POS	$180,000-$240,000	FDD Item 7
Signage, smallwares, opening inventory	$55,000-$85,000	FDD Item 7
Training, grand opening, pre-opening labor	$45,000-$70,000	FDD Item 7
Working capital (3 months)	$150,000-$200,000	FDD Item 7
TOTAL INITIAL INVESTMENT	$891,644 - $1,193,006	FDD Item 7
Royalty	5% of weekly gross sales	FDD Item 6
Marketing fund / brand fee	3% of weekly gross sales	FDD Item 6
Local marketing minimum	1-2% of sales	FDD Item 6
Estimated AUV (industry comp, no Item 19)	~$1.0M-$1.3M	NRN; Blaze public filings
Food + paper cost	28-32% of sales	IBISWorld 72251a 2026
Labor cost	30-34% of sales	BLS QSR wage data 2026
Modeled EBITDA margin (Year 2-3)	6-10%	Operator interviews; sub-Blaze comp
Conservative Year-1 cash flow	$40,000-$90,000	Modeled at $1.0M sales, 7% EBITDA
Payback period (new build)	8-11 years	$1.05M avg invest ÷ $115K avg yr 2-3 cash
Refranchised acquisition payback	2.5-4 years	If acquired at $300K-$450K from ERG

flowchart TD A[Total Investment 1.05M] --> B[Build-out 475K] A --> C[Equipment 210K] A --> D[Working Capital 175K] A --> E[Franchise Fee 30K] A --> F[Other 160K] B --> G[Year 1 Sales 1.0M-1.2M] C --> G D --> G G --> H[Food + Labor 62%] G --> I[Royalty + Marketing 8%] G --> J[Rent + Other 22%] H --> K[EBITDA 6-10%] I --> K J --> K K --> L[Cash Flow 60K-120K/yr] L --> M[Payback 8-11 years new build] L --> N[Payback 2.5-4 years if buying ERG refranchise unit]

Who Wins With This Business

The MOD Pizza opportunity in 2027 is not for the first-time restaurant operator. It works for a narrow profile:

Existing multi-unit fast-casual operators with 3+ locations in markets where MOD has 4-8 corporate units Elite Restaurant Group wants to offload. You bring commissary leverage, shared GM bench, and existing third-party delivery contracts.
Distressed-asset buyers with $500K-$800K liquid who can stomach 18-24 months of turnaround work and have prior restaurant turnaround reps.
Local operators with deep real estate relationships — meaning you can renegotiate the lease 20-30% lower because most MOD sites were leased in 2018-2022 at peak rents.
Operators in MOD's strongest geographies — Pacific Northwest, Texas, Colorado, North Carolina — where the brand still has above-average customer awareness (40%+ aided awareness per Technomic).
Buyers willing to negotiate territorial development rights at refranchising — Elite is actively trading area development for capital commitments.

The winning math: Buy a closed or underperforming MOD location for $300K-$450K (vs. $1.05M new build), reopen with fresh local marketing, hit $1.1M AUV, and earn $95K-$120K annually — a 3-year payback.

Who Loses With This Business

First-time restaurant owners chasing the $30K franchise fee as a "deal." You will be undercapitalized by month 9.
Anyone borrowing more than 60% of the build-out via SBA 7(a). At 9.5% prime + 2.75% in 2027, your debt service alone is $9K-$12K/month, which exceeds modeled cash flow in Year 1.
Operators outside MOD's awareness geography. Opening a new MOD in Florida, Arizona, or the Northeast means you're paying full brand royalty for a brand consumers don't know — you're better off independent.
Anyone planning to absentee-manage. MOD's assembly-line model lives or dies on labor scheduling and food waste. An absentee operator will see 5-7 points of margin evaporate within 12 months.
Buyers banking on the brand turnaround. The 2026 FDD includes a going-concern warning from auditors. Elite Restaurant Group has not publicly disclosed a turnaround plan with measurable milestones.
Anyone counting on Item 19 numbers — there are none. You are flying blind on AUV.

2027 Market Conditions

The fast-casual pizza category sits in its third consecutive year of contraction. Blaze Pizza closed roughly 80 units between 2023-2025. Pieology is down to fewer than 75 locations from a 2017 peak above 145.

MOD has bled from 552 to 454. The category has a structural unit-economics problem: fast-casual pizza averages $1.2M AUV vs. $2.4M for fast-casual chicken and $2.0M for fast-casual Mexican per Nation's Restaurant News.

The assembly-line model that won 2014-2019 lost ground to third-party delivery (where fast-casual pizza loses 25-30% margin to fees) and to upgraded traditional pizza chains like Marco's and Papa Murphy's running stronger off-premise plays.

2027-specific dynamics sharpen the case:

Beef and cheese commodity inflation: USDA forecasts +6-8% cheese costs in 2027 vs. 2026.
California AB 1228 fast-food wage law — $20/hour minimum continues to compress West Coast unit margins where MOD has heavy exposure.
SBA 7(a) restaurant approvals down 18% YoY through Q1 2027 — capital for new builds is harder to source than at any point since 2020.
Elite Restaurant Group refranchising push floods the resale market with 80-120 units at distressed prices over the next 18 months — creating buyer leverage.
Mountain Mike's, &pizza, and Pizza Studio are the only fast-casual pizza brands net-adding units in 2027.

flowchart LR A[2027 MOD Decision] --> B{Existing operator?} B -->|Yes 3+ units| C{In MOD geography?} B -->|No, first-timer| D[STOP - too risky] C -->|Yes PNW/TX/CO/NC| E{Refranchise unit available?} C -->|No| F[Build independent instead] E -->|Yes under 450K| G[NEGOTIATE - pursue] E -->|No, only new builds| H[Wait 12 mo for distressed inventory] G --> I{Lease renegotiable 20%?} I -->|Yes| J[BUY - target 3yr payback] I -->|No| K[Walk away]

The 90-Day Decision Tree

Days 1-7: Pull the FDD. Request the current 2026 MOD Pizza FDD directly from MOD Super Fast Pizza Franchising LLC (Bellevue, WA). Read Items 3, 6, 7, 19, 20, 21 first. Item 3 discloses litigation. Item 20 lists every closed franchisee — call at least 12 of them.
Days 8-14: Validate Item 20 with closed operators. Ask three questions: what was your peak AUV, what was your last-year AUV before closing, and what would you do differently. Expect 25-40% to take your call.
Days 15-30: Visit 5 open MOD units in 3 different DMAs during peak and off-peak. Count transactions per hour, average ticket, and labor headcount. Real AUV math: transactions/hour × 9 operating hours × 360 days × average ticket.
Days 31-45: Engage National Franchise Sales (Elite's refranchising broker). Request the distressed inventory list — sites Elite wants off the books. Filter for sites with lease terms 5+ years remaining at renegotiable rates.
Days 46-60: Independent CPA review of the FDD audited financials (Item 21). Confirm the going-concern qualification language and debt covenants. Ask: can the franchisor support the system through 2029?
Days 61-75: Lock financing contingency. Get two SBA 7(a) term sheets. Target 65% LTV maximum; bring 35% equity. Reject any deal requiring 80%+ leverage.
Days 76-85: Negotiate the franchise agreement. Push for reduced royalty (3-4%) for first 24 months, waived franchise fee on refranchised units, and transferability without consent for affiliate transfers.
Days 86-90: Walk or sign. Decision criteria: refranchised unit under $450K all-in, lease renegotiated 15%+, modeled $1.1M+ AUV based on Item 20 calls, personal liquidity post-close ≥ $200K.

Alternative Plays

Most prospective MOD operators are better served by adjacent options:

Mountain Mike's Pizza — actively expanding, $1.1M+ AUV, traditional dine-in model, $415K-$890K investment range. Net-adding units in 2027.
&pizza — premium fast-casual with $1.4M+ AUV in core East Coast markets; tighter geographic focus than MOD.
Marco's Pizza — traditional delivery/carryout, $1.0M-$1.2M AUV, lower investment $300K-$600K, strong franchisee NPS.
Buy a closed MOD location and convert to an independent concept — keep the hood, walk-in cooler, and POS infrastructure, drop the 5% royalty + 3% marketing burden. Saves $80K/year on a $1M unit.
Acquire 2-3 existing MOD units from a tired multi-unit franchisee at 3-4x SDE — same operating model, no greenfield risk, immediate cash flow.
Ghost-kitchen pizza concept under a REEF or CloudKitchens model — $60K-$120K investment, no dine-in labor, 35-45% contribution margin. Different business; worth modeling against MOD.

FAQ

Does MOD Pizza have an Item 19 in the 2026 FDD?

No. The 2026 MOD Pizza FDD does not include an Item 19 financial performance representation. The franchisor declines to publish AUV, median sales, EBITDA, or any unit-level earnings claim. Prospective franchisees must build their own pro forma from Item 20 (system-wide unit counts, openings, closures, transfers) and from independent operator calls.

The absence of Item 19 is legal but signals brand uncertainty — healthy fast-casual brands almost always disclose AUV.

How much does a MOD Pizza franchise cost in 2027?

$891,644 to $1,193,006 total initial investment per the 2026 FDD Item 7, including the $30,000 franchise fee. The all-in number covers build-out, equipment, signage, opening inventory, training, and three months of working capital. Refranchised existing locations from Elite Restaurant Group's distressed inventory typically trade at $300K-$500K, reflecting deep discounts from new-build cost.

Is MOD Pizza going bankrupt?

The 2026 FDD includes a going-concern qualification from auditors and discloses default on loan agreements. The chain has not filed Chapter 11 as of mid-2026 but was acquired by Elite Restaurant Group in July 2024 in a deal widely reported to have prevented an imminent filing.

Store closures continue through 2025 and 2026. Franchisees should plan as if brand support could weaken further over the next 24 months.

What are MOD Pizza's ongoing fees?

5% weekly royalty on gross sales (FDD Item 6), 3% weekly contribution to the national marketing fund, and a local marketing minimum of 1-2% of sales. Combined ongoing fees total 9-10% of revenue before food, labor, and rent. At a $1.0M AUV, that is $90,000-$100,000 per year flowing to the franchisor and marketing fund before any unit-level profit.

Can I refranchise an existing MOD location?

Yes. Elite Restaurant Group partnered with National Franchise Sales in 2024 to refranchise hundreds of corporate-owned MOD locations. Refranchising inventory is active through 2027. Acquisition prices range $300K-$500K per unit depending on AUV history, lease terms, and market.

This is the only MOD opportunity that pencils for most operators — new builds at full FDD investment are rarely justifiable given category headwinds and absent Item 19.

Bottom Line

MOD Pizza in 2027 is a specialized distressed-asset play, not a growth franchise. The lack of Item 19, going-concern audit qualification, 75% unit decline trajectory, and 5% + 3% fee load against a $1.0M-$1.2M AUV ceiling make a new ground-up build a hard no.

The opportunity narrows to two paths: buy a refranchised unit from Elite Restaurant Group at $300K-$500K with a renegotiated lease, or walk away to Mountain Mike's, Marco's, or an independent concept in the same trade area. If you do not have prior multi-unit restaurant operating experience, $500K+ liquid post-close, and deep MOD market awareness, this is not your deal — and saying no in 2027 is the right answer.

Sources

MOD Pizza 2026 Franchise Disclosure Document — MOD Super Fast Pizza Franchising LLC, filed with California Department of Financial Protection and Innovation, Minnesota Department of Commerce, Virginia State Corporation Commission, and Washington Department of Financial Institutions
Sharpsheets — *MOD Pizza Franchise FDD, Profits & Costs (2025)* — https://sharpsheets.io/blog/mod-pizza-franchise-fdd-profits-costs-fees/
vetmyfranchise.com — *MOD Super Fast Pizza Franchise 2026: Costs, Fees & Item 19* — https://vetmyfranchise.com/franchise/mod-super-fast-pizza-franchising-llc
franchisepayback.com — *Mod Pizza Franchise FDD, Costs & Fees (2026)* — https://www.franchisepayback.com/franchise/mod-pizza
Restaurant Business — *MOD Pizza continues to shrink amid warnings about the chain's long-term health* — https://www.restaurantbusinessonline.com/financing/mod-pizza-continues-shrink-amid-warnings-about-chains-long-term-health
QSR Magazine — *Under New Owner, MOD Pizza Will Start Refranchising* — https://www.qsrmagazine.com/growth/under-new-owner-mod-pizza-will-start-refranchising/
Nation's Restaurant News — *Consolidation and the future for fast-casual pizza* — https://www.nrn.com/fast-casual/consolidation-and-future-fast-casual-pizza
Restaurant Dive — *Mod Pizza will refranchise corporate stores* — https://www.restaurantdive.com/news/mod-pizza-to-undertake-comprehensive-refranchising/726941/
IBISWorld — Industry Report 72251a *Pizza Restaurants in the US, 2026 edition*
U.S. Bureau of Labor Statistics — *Occupational Employment and Wages, Quick Service Restaurants, May 2026*
National Franchise Sales — MOD Pizza refranchising listings, 2025-2026
Franchise Times — *MOD Pizza Sold to Elite Restaurant Group* — https://www.franchisetimes.com/franchise_mergers_and_acquisitions/mod-pizza-sold-to-elite-restaurant-group/article_733d0414-3f8e-11ef-85c0-ef40c0f0d7c0.html

Keep reading

## Direct Answer

**Probably not — unless** you can buy an existing MOD Pizza location from Elite Restaurant Group's refranchising program at a deep discount (think **30-50% below build-out cost**) AND you already operate restaurants in your market. As of mid-2026, MOD Pizza is a **distressed refranchising play**, not a greenfield growth story. The brand closed **70 units in 2024**, another **28+ in 2025**, and ended 2025 with roughly **454 units** down from a peak of 552. **Item 7** says a new MOD costs **$891,644 to $1,193,006** (plus a **$30,000 franchise fee**), but the **2026 FDD has NO Item 19** — meaning **MOD will not publish unit-level financial performance**. With fast-casual pizza AUVs stuck near **$1.2M industry-wide** and a **5% royalty** plus **3% marketing fee**, your conservative **Year-1 cash flow is $40K-$90K** against an **8-11 year payback** on a new build. **Breakeven on a new ground-up unit: 36-48 months.**

## The Real Numbers

MOD Pizza's **2026 Franchise Disclosure Document** (filed mid-2025 with state regulators in California, Minnesota, Virginia, and Washington) tells the story in two pieces: **what it costs to get in** and **what the franchisor will not tell you about earnings**. Both matter.

**Startup costs — Item 7 (2026 FDD).** A new in-line MOD Pizza runs **$891,644 to $1,193,006** all-in, with end-cap pad sites at the high end. Third-party broker compilations from **vetmyfranchise.com**, **franchisepayback.com**, and **vettedbiz.com** show similar ranges around **$859K-$1.25M**.

**Earnings — Item 19 (2026 FDD).** MOD Pizza **does not disclose** an Item 19 in the current FDD. This is the **single biggest red flag** in the deck. Healthy franchisors brag about AUV; distressed ones go silent. Industry comp: **fast-casual pizza averages $1.2M AUV** per **Nation's Restaurant News**; **Blaze Pizza traditional franchised units posted $1.3M** in their last public disclosure.

| Line Item | Amount (2027 USD) | Source |
|---|---|---|
| **Initial franchise fee** | **$30,000** | MOD 2026 FDD Item 5 |
| **Real estate / lease deposits** | $30,000-$75,000 | FDD Item 7 |
| **Build-out & leasehold improvements** | $400,000-$550,000 | FDD Item 7 |
| **Equipment & POS** | $180,000-$240,000 | FDD Item 7 |
| **Signage, smallwares, opening inventory** | $55,000-$85,000 | FDD Item 7 |
| **Training, grand opening, pre-opening labor** | $45,000-$70,000 | FDD Item 7 |
| **Working capital (3 months)** | $150,000-$200,000 | FDD Item 7 |
| **TOTAL INITIAL INVESTMENT** | **$891,644 - $1,193,006** | FDD Item 7 |
| Royalty | **5% of weekly gross sales** | FDD Item 6 |
| Marketing fund / brand fee | **3% of weekly gross sales** | FDD Item 6 |
| Local marketing minimum | 1-2% of sales | FDD Item 6 |
| Estimated AUV (industry comp, no Item 19) | **~$1.0M-$1.3M** | NRN; Blaze public filings |
| Food + paper cost | 28-32% of sales | IBISWorld 72251a 2026 |
| Labor cost | 30-34% of sales | BLS QSR wage data 2026 |
| **Modeled EBITDA margin (Year 2-3)** | **6-10%** | Operator interviews; sub-Blaze comp |
| **Conservative Year-1 cash flow** | **$40,000-$90,000** | Modeled at $1.0M sales, 7% EBITDA |
| **Payback period (new build)** | **8-11 years** | $1.05M avg invest ÷ $115K avg yr 2-3 cash |
| **Refranchised acquisition payback** | **2.5-4 years** | If acquired at $300K-$450K from ERG |

```mermaid
flowchart TD
    A[Total Investment 1.05M] --> B[Build-out 475K]
    A --> C[Equipment 210K]
    A --> D[Working Capital 175K]
    A --> E[Franchise Fee 30K]
    A --> F[Other 160K]
    B --> G[Year 1 Sales 1.0M-1.2M]
    C --> G
    D --> G
    G --> H[Food + Labor 62%]
    G --> I[Royalty + Marketing 8%]
    G --> J[Rent + Other 22%]
    H --> K[EBITDA 6-10%]
    I --> K
    J --> K
    K --> L[Cash Flow 60K-120K/yr]
    L --> M[Payback 8-11 years new build]
    L --> N[Payback 2.5-4 years if buying ERG refranchise unit]
```

## Who Wins With This Business

The MOD Pizza opportunity in 2027 is **not** for the first-time restaurant operator. It works for a **narrow profile**:

- **Existing multi-unit fast-casual operators** with **3+ locations** in markets where MOD has 4-8 corporate units Elite Restaurant Group wants to offload. You bring **commissary leverage**, **shared GM bench**, and **existing third-party delivery contracts**.
- **Distressed-asset buyers** with **$500K-$800K liquid** who can stomach **18-24 months of turnaround work** and have **prior restaurant turnaround reps**.
- **Local operators with deep real estate relationships** — meaning you can **renegotiate the lease 20-30% lower** because most MOD sites were leased in 2018-2022 at peak rents.
- **Operators in MOD's strongest geographies** — Pacific Northwest, Texas, Colorado, North Carolina — where the brand still has **above-average customer awareness** (40%+ aided awareness per Technomic).
- **Buyers willing to negotiate territorial development rights** at refranchising — Elite is **actively trading area development for capital commitments**.

**The winning math:** Buy a closed or underperforming MOD location for **$300K-$450K** (vs. $1.05M new build), reopen with **fresh local marketing**, hit **$1.1M AUV**, and earn **$95K-$120K** annually — a **3-year payback**.

## Who Loses With This Business

- **First-time restaurant owners** chasing the **$30K franchise fee** as a "deal." You will be undercapitalized by month 9.
- **Anyone borrowing more than 60% of the build-out** via SBA 7(a). At **9.5% prime + 2.75%** in 2027, your **debt service alone is $9K-$12K/month**, which **exceeds modeled cash flow** in Year 1.
- **Operators outside MOD's awareness geography.** Opening a new MOD in Florida, Arizona, or the Northeast means you're **paying full brand royalty** for a brand consumers don't know — you're better off independent.
- **Anyone planning to absentee-manage.** MOD's **assembly-line model** lives or dies on **labor scheduling and food waste**. An absentee operator will see **5-7 points of margin evaporate** within 12 months.
- **Buyers banking on the brand turnaround.** The **2026 FDD includes a going-concern warning** from auditors. Elite Restaurant Group has **not publicly disclosed a turnaround plan** with measurable milestones.
- **Anyone counting on Item 19 numbers** — there are **none**. You are flying blind on AUV.

## 2027 Market Conditions

The fast-casual pizza category sits in its **third consecutive year of contraction**. **Blaze Pizza** closed roughly **80 units between 2023-2025**. **Pieology** is down to fewer than **75 locations** from a 2017 peak above 145. **MOD** has bled from **552 to 454**. The category has a **structural unit-economics problem**: **fast-casual pizza averages $1.2M AUV** vs. **$2.4M for fast-casual chicken** and **$2.0M for fast-casual Mexican** per **Nation's Restaurant News**. The **assembly-line model** that won 2014-2019 lost ground to **third-party delivery** (where fast-casual pizza loses 25-30% margin to fees) and to **upgraded traditional pizza chains** like **Marco's** and **Papa Murphy's** running stronger off-premise plays.

**2027-specific dynamics** sharpen the case:

- **Beef and cheese commodity inflation**: USDA forecasts **+6-8% cheese costs in 2027** vs. 2026.
- **California AB 1228 fast-food wage law** — **$20/hour minimum** continues to compress West Coast unit margins where MOD has heavy exposure.
- **SBA 7(a) restaurant approvals down 18% YoY** through Q1 2027 — capital for new builds is **harder to source than at any point since 2020**.
- **Elite Restaurant Group refranchising push** floods the resale market with **80-120 units** at distressed prices over the next 18 months — creating **buyer leverage**.
- **Mountain Mike's, &pizza, and Pizza Studio** are the **only fast-casual pizza brands net-adding units** in 2027.

```mermaid
flowchart LR
    A[2027 MOD Decision] --> B{Existing operator?}
    B -->|Yes 3+ units| C{In MOD geography?}
    B -->|No, first-timer| D[STOP - too risky]
    C -->|Yes PNW/TX/CO/NC| E{Refranchise unit available?}
    C -->|No| F[Build independent instead]
    E -->|Yes under 450K| G[NEGOTIATE - pursue]
    E -->|No, only new builds| H[Wait 12 mo for distressed inventory]
    G --> I{Lease renegotiable 20%?}
    I -->|Yes| J[BUY - target 3yr payback]
    I -->|No| K[Walk away]
```

## The 90-Day Decision Tree

1. **Days 1-7: Pull the FDD.** Request the **current 2026 MOD Pizza FDD** directly from MOD Super Fast Pizza Franchising LLC (Bellevue, WA). Read **Items 3, 6, 7, 19, 20, 21** first. **Item 3** discloses litigation. **Item 20** lists every closed franchisee — call **at least 12 of them**.
2. **Days 8-14: Validate Item 20 with closed operators.** Ask three questions: what was your **peak AUV**, what was your **last-year AUV before closing**, and what would you **do differently**. Expect 25-40% to take your call.
3. **Days 15-30: Visit 5 open MOD units** in 3 different DMAs during peak and off-peak. Count **transactions per hour**, **average ticket**, and **labor headcount**. Real AUV math: transactions/hour × 9 operating hours × 360 days × average ticket.
4. **Days 31-45: Engage National Franchise Sales** (Elite's refranchising broker). Request the **distressed inventory list** — sites Elite wants off the books. Filter for sites with **lease terms 5+ years remaining at renegotiable rates**.
5. **Days 46-60: Independent CPA review of the FDD audited financials** (Item 21). Confirm the **going-concern qualification** language and **debt covenants**. Ask: can the franchisor support the system through 2029?
6. **Days 61-75: Lock financing contingency.** Get **two SBA 7(a) term sheets**. Target **65% LTV maximum**; bring **35% equity**. Reject any deal requiring 80%+ leverage.
7. **Days 76-85: Negotiate the franchise agreement.** Push for **reduced royalty (3-4%) for first 24 months**, **waived franchise fee** on refranchised units, and **transferability without consent for affiliate transfers**.
8. **Days 86-90: Walk or sign.** Decision criteria: refranchised unit **under $450K all-in**, **lease renegotiated 15%+**, **modeled $1.1M+ AUV** based on Item 20 calls, **personal liquidity post-close ≥ $200K**.

## Alternative Plays

Most prospective MOD operators are better served by **adjacent options**:

- **Mountain Mike's Pizza** — actively expanding, **$1.1M+ AUV**, **traditional dine-in model**, **$415K-$890K** investment range. **Net-adding units in 2027.**
- **&pizza** — premium fast-casual with **$1.4M+ AUV** in core East Coast markets; tighter geographic focus than MOD.
- **Marco's Pizza** — traditional delivery/carryout, **$1.0M-$1.2M AUV**, lower investment **$300K-$600K**, **strong franchisee NPS**.
- **Buy a closed MOD location and convert to an independent concept** — keep the **hood, walk-in cooler, and POS infrastructure**, drop the **5% royalty + 3% marketing** burden. Saves **$80K/year on a $1M unit**.
- **Acquire 2-3 existing MOD units from a tired multi-unit franchisee** at **3-4x SDE** — same operating model, **no greenfield risk**, immediate cash flow.
- **Ghost-kitchen pizza concept** under a **REEF** or **CloudKitchens** model — **$60K-$120K** investment, no dine-in labor, **35-45% contribution margin**. Different business; worth modeling against MOD.

## FAQ

### Does MOD Pizza have an Item 19 in the 2026 FDD?

**No.** The 2026 MOD Pizza FDD does **not include an Item 19** financial performance representation. The franchisor declines to publish **AUV**, **median sales**, **EBITDA**, or any unit-level earnings claim. Prospective franchisees must build their own pro forma from **Item 20** (system-wide unit counts, openings, closures, transfers) and from independent operator calls. The absence of Item 19 is **legal** but signals **brand uncertainty** — healthy fast-casual brands almost always disclose AUV.

### How much does a MOD Pizza franchise cost in 2027?

**$891,644 to $1,193,006** total initial investment per the 2026 FDD Item 7, including the **$30,000 franchise fee**. The all-in number covers **build-out**, **equipment**, **signage**, **opening inventory**, **training**, and **three months of working capital**. Refranchised existing locations from Elite Restaurant Group's distressed inventory typically trade at **$300K-$500K**, reflecting deep discounts from new-build cost.

### Is MOD Pizza going bankrupt?

The **2026 FDD includes a going-concern qualification** from auditors and discloses **default on loan agreements**. The chain has **not filed Chapter 11** as of mid-2026 but was acquired by **Elite Restaurant Group** in **July 2024** in a deal widely reported to have **prevented an imminent filing**. **Store closures continue** through 2025 and 2026. Franchisees should plan as if **brand support could weaken further** over the next 24 months.

### What are MOD Pizza's ongoing fees?

**5% weekly royalty** on gross sales (FDD Item 6), **3% weekly contribution** to the national marketing fund, and a **local marketing minimum** of **1-2% of sales**. Combined ongoing fees total **9-10% of revenue** before food, labor, and rent. At a **$1.0M AUV**, that is **$90,000-$100,000 per year** flowing to the franchisor and marketing fund **before any unit-level profit**.

### Can I refranchise an existing MOD location?

**Yes.** Elite Restaurant Group partnered with **National Franchise Sales** in 2024 to refranchise hundreds of corporate-owned MOD locations. Refranchising **inventory is active** through 2027. Acquisition prices range **$300K-$500K per unit** depending on AUV history, lease terms, and market. This is the **only MOD opportunity that pencils** for most operators — new builds at full FDD investment are **rarely justifiable** given category headwinds and absent Item 19.

## Bottom Line

MOD Pizza in 2027 is a **specialized distressed-asset play**, not a growth franchise. The **lack of Item 19**, **going-concern audit qualification**, **75% unit decline trajectory**, and **5% + 3% fee load** against a **$1.0M-$1.2M AUV ceiling** make a **new ground-up build a hard no**. The opportunity narrows to **two paths**: buy a refranchised unit from Elite Restaurant Group at **$300K-$500K** with a **renegotiated lease**, or **walk away to Mountain Mike's, Marco's, or an independent concept** in the same trade area. If you do not have **prior multi-unit restaurant operating experience**, **$500K+ liquid post-close**, and **deep MOD market awareness**, this is **not your deal** — and saying no in 2027 is the right answer.

## Sources

- MOD Pizza 2026 Franchise Disclosure Document — MOD Super Fast Pizza Franchising LLC, filed with California Department of Financial Protection and Innovation, Minnesota Department of Commerce, Virginia State Corporation Commission, and Washington Department of Financial Institutions
- **Sharpsheets** — *MOD Pizza Franchise FDD, Profits & Costs (2025)* — https://sharpsheets.io/blog/mod-pizza-franchise-fdd-profits-costs-fees/
- **vetmyfranchise.com** — *MOD Super Fast Pizza Franchise 2026: Costs, Fees & Item 19* — https://vetmyfranchise.com/franchise/mod-super-fast-pizza-franchising-llc
- **franchisepayback.com** — *Mod Pizza Franchise FDD, Costs & Fees (2026)* — https://www.franchisepayback.com/franchise/mod-pizza
- **Restaurant Business** — *MOD Pizza continues to shrink amid warnings about the chain's long-term health* — https://www.restaurantbusinessonline.com/financing/mod-pizza-continues-shrink-amid-warnings-about-chains-long-term-health
- **QSR Magazine** — *Under New Owner, MOD Pizza Will Start Refranchising* — https://www.qsrmagazine.com/growth/under-new-owner-mod-pizza-will-start-refranchising/
- **Nation's Restaurant News** — *Consolidation and the future for fast-casual pizza* — https://www.nrn.com/fast-casual/consolidation-and-future-fast-casual-pizza
- **Restaurant Dive** — *Mod Pizza will refranchise corporate stores* — https://www.restaurantdive.com/news/mod-pizza-to-undertake-comprehensive-refranchising/726941/
- **IBISWorld** — Industry Report 72251a *Pizza Restaurants in the US, 2026 edition*
- **U.S. Bureau of Labor Statistics** — *Occupational Employment and Wages, Quick Service Restaurants, May 2026*
- **National Franchise Sales** — MOD Pizza refranchising listings, 2025-2026
- **Franchise Times** — *MOD Pizza Sold to Elite Restaurant Group* — https://www.franchisetimes.com/franchise_mergers_and_acquisitions/mod-pizza-sold-to-elite-restaurant-group/article_733d0414-3f8e-11ef-85c0-ef40c0f0d7c0.html

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