Are you familiar with the Philly Pretzel Factory franchise?  Please share a comment – positive or negative – below.

(UnhappyFranchisee.Com)  According to the Coleman Report, the default rate for Philly Soft Pretzel Factory SBA-backed franchise loans is 28%.

That’s high enough to earn Philly Soft Pretzel Factory a spot in our Worst Franchises by SBA Loan Default Rate (2014) list.

Why do  Philly Pretzel Factory franchisees default on their SBA loans at such a disturbing rate?  Please share your thoughts below.

The Philly Soft Pretzel Factory franchise website boast solid growth as a selling point, stating:

“Since our first franchise opened nearly 20 years ago, in-stores sales have continued to grow. In fact, 45% of franchise owners own multiple stores.”

Another claim is that Philly Soft Pretzel Factory operations is simple:  “We offer fresh ‘hot outta the oven’ pretzels and a few other products such as pretzel dogs, pretzel cheeseteaks, peperoni melts, and cinnamon pretzel twists. We make it as easy as possible to run our system, so we we keep our product line limited.”

It boasts the solid support system of the Philly Soft Pretzel Factory:  “We focus on providing unmatched franchise support through our Franchise Support Managers who work with you to maintain operation efficiency and build sales through store visits and consistent communication.”

According to Entrepreneur magazine, the Philly Soft Pretzel Factory franchise chain has grown from 110 U.S. locations in 2011 to 129 locations in 2014.

Why, then, does Philly Soft Pretzel Factory have one of the highest SBA loan default rates in the nation?






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9 thoughts on “PHILLY PRETZEL FACTORY Franchise Complaints

  • February 16, 2019 at 2:17 pm

    Philly Pretzel Factory will sucker you right in with a lot of talk about the growth and how fast the company is expanding. When I bought into it in 2016 I was told they had 180 stores, 210 by the end of the year and by 2020 they will have over 500 stores and then go International. Well we are 10 months from 2020 and they have dropped many stores and still sit now at 200.

    10 stores to open in NY have gone under The owner walked away from 10 Franchise fees he paid. That says something.

    Start up costs are 1/2 of what they say they will be. Franchise fees are up to 8% a week of total sales. You are forced to buy their equipment, paper goods, supplies, builder, architect, ect…… that is after you pay $45,000 to buy the franchise.

    Don’t be fooled by the undercover Boss episode. The owner could give a crap about his franchisees just their 8% weekly fees. I have lost my entire retirement fund over 500k and lost my house to the SBA loan with the bank the connect you with. it is one GIANT scam.

    They charge 2% for advertising fees yet DO NONE outside of twitter and Facebook. . especially for stores out of the Philadelphia area. I would not recommend even wasting your time with the hour webinar as it is all propaganda to try and sell you on how much money you will make.

    I lost $80,000 the first year and over $95,000 in 2018. Broke, Homeless and under chapter 11 with over $250,000 in debt. Stay away FAR FAR away

  • January 26, 2020 at 8:04 pm

    I went through something similar, give me a call, i’ll share my story with you…….

  • February 11, 2020 at 12:04 pm

    Oh were you out of market also?

  • July 28, 2020 at 3:08 pm

    Would love to talk to either of you, I’m a current out of market franchise owner.

  • July 30, 2020 at 9:07 pm

    been looking to get into a franchise cleaning…jam pro to much fees don’t see myself making$$ so i ask myself how do we make money.,,,it the game they play

  • September 9, 2021 at 4:44 am

    My Name is David K, I would tell anyone who is thinking about franchising with PPF to look at what they did to me then decide…..I would let my proof of truth tell the story!!!!
    Anyone who is interested in really knowing what this company is contact me :

  • September 10, 2021 at 11:24 am

    About 5 years ago I decided to check out PPF to see what is was about. After doing some due diligence, I quickly decided this was not for me. (I live in the Midwest.) There was a women who worked with the franchise development department and she told me she would let them know I had no further interest and they would not send me anymore emails about the operation.
    Over the next 6 months I would receive emails from PPF that stated how well they were doing and how large they were growing. Finally, I decided to put an end to this nonsense: I got in touch with a new salesman. I told him that I saw an article that PPF had an abnormally high failure rate. The statistics were from a 2010 SBA on franchise business failures. After I laid out everything to the salesman, he came back at me in an email and said the information I gave him was not true and this opportunity with PPF was not for me. He wished me luck in my further endeavors. After that correspondence I never got another email from them! I was one of the lucky ones.

  • September 10, 2021 at 12:53 pm

    Thanks Phillip,

    We don’t have post-Covid numbers on file, but as of the 2019 FDD Philly Pretzel Factory had a 3-year franchise turnover rate of about 29%.

    That’s not the worst in the industry but not great either. Basically, 1 in 3 franchisees were exiting the system prematurely every three years. It’s hard to determine how many stores are still open from the way their location list is set-up, but I would assume they’ve taken a hit.

    The majority of the turnover 2017-1019 was transfers to new owners rather than closures. However, there are a lot of PPF franchises listed for sale at prices well below the initial investments, so many were likely exiting at a loss.

    Some current listings include:
    “REDUCED PRICE-TWO Pretzel Shops – One inside Walmart! For Sale Pennsylvania United States Listed Price $109,900
    Reduced Price! Well Established Pretzel Shop – ONLY 20% Down Needed
    Pennsylvania United States Listed Price $199,000
    Drive-Thru Pretzel Shop! Pennsylvania United States Listed Price $70,000
    Pretzel Shop – Only Need 20% Down to Buy! For Sale
    Pretzel Shop – Only Need 20% Down to Buy! For Sale
    Pennsylvania United States Listed Price $330,000
    2 Fast Casual Franchises for $80K Located in Montgomery County Pennsylvania United States
    Listed Price $80,000”

    I like the concept, but the product is not well understood outside the Philly area. It’s not like Auntie Anne’s or bavarian-type pretzels. Tough even to explain. It’s a PA thing.

  • September 29, 2021 at 1:57 pm

    Saw Rochester NY is for sale, $40k for biz. Only opened in past 2 years. High rent area without complimentary co-tenants to help support it.

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