16 Handles Store Franchise Review (2026): Costs, Fees, Revenue Potential

• Category: Food & Beverage
• Initial Investment: $249,500 to $656,500
• Franchise Fee: $30,000
• Royalty: 6% of gross sales
• Marketing / Ad Fee: 2% of gross sales
• Key additional recurring fees: $10,000 annual local marketing requirement; POS system license fee currently $89/month for two terminals; possible cooperative marketing contribution of up to 1% of gross sales if formed
• Number of locations: 31 franchised stores at year-end 2024; 0 company-owned
• Best Fit: Owner-operator or manager-led owner with active oversight

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The disclosure estimates total initial investment at $249,500 to $656,500 for a single store, including a $30,000 initial franchise fee. It also lists additional funds of $5,000 to $20,000, which suggests working capital needs beyond buildout and opening costs.

The wide range indicates that site-specific factors can materially affect startup cost. On the numbers disclosed, this falls into a high-cost startup range for a single retail unit, which means location selection, lease terms, and buildout assumptions likely matter a lot to total capital required.

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Key recurring fees disclosed include:

• Royalty: 6% of gross sales
• Marketing fee: 2% of gross sales
• Local marketing: $10,000 per year unless otherwise approved
• Cooperative marketing: up to 1% of gross sales if a cooperative is formed
• POS system license fee: currently $89 per month for two terminals
• Directory advertising: up to $1,000 annually if required

Other contingent fees include training charges, transfer fees, renewal fee, relocation fee, audit expenses, insurance premiums if the franchisor steps in, and a 15% management fee plus expenses if the franchisor manages the store in certain circumstances.

Overall, the fee structure combines percentage-based royalties with fixed local marketing and technology costs. That creates a recurring burden tied partly to sales volume and partly to fixed operating obligations.

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Yes, the FDD includes an Item 19 financial performance representation, but it reports gross sales, not profit.

For 24 franchised stores that were open for the full measurement period ended December 31, 2024, disclosed gross sales were:

• Average gross sales: $804,648
• Median gross sales: $749,749
• Lowest: $431,344
• Highest: $2,120,516

Quartile-style results disclosed:

• Top 25% (6 stores): average $1,166,920; median $947,040
• Top 50% (12 stores): average $983,903; median $861,584
• Bottom 50% (12 stores): average $625,394; median $627,649
• Bottom 25% (6 stores): average $547,450; median $554,955

The spread is wide. The highest reported store generated nearly five times the lowest reported store, and the gap between the top and bottom quartiles is substantial. That suggests location, execution, and store-specific conditions may have a major effect on revenue.

The disclosure also states that 9 of 24 stores (38%) met or exceeded the average, while 12 of 24 (50%) met or exceeded the median.

For 6 affiliate-owned locations, the disclosure reports:

• Average gross sales: $853,266
• Average cost of goods expense: $222,857
• Average cost of goods as a percentage of gross sales: 26.1%

Important caveats:

• These figures are not audited.
• The franchised-store sample is 24 out of 31 franchised stores, so 7 stores were excluded.
• Exclusions included stores that were newly opened, permanently ceased operations during the period, seasonal stores, one store with no revenue due to a landlord-related temporary closure, and one cobranded location with a different operating model.
• The disclosure indicates a new U.S. franchise using foreign history, and the available flags note that Item 19 is based on non-U.S. operations; the disclosure provided here does not clearly establish the exact scope needed to judge direct comparability.

Revenue does not equal profit. The FDD does not provide store-level net income, labor cost, occupancy cost, or full operating expense detail for franchised stores.

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• Model: B2C retail food service
• Revenue pattern: Primarily recurring transaction-based store revenue rather than contract revenue
• Operations: Single-store retail format with in-person operations, required POS system use, local marketing obligations, and manager-level oversight
• Staffing/ownership: The owner or designated principal must be involved in general oversight and management, and the disclosure says the franchisor expects that person to act as general manager
• Equipment/technology: The disclosure indicates meaningful technology requirements and ongoing POS-related fees

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Advantages

• Item 19 includes actual gross sales data for 24 franchised stores, with average, median, range, and quartile breakdowns.
• The system had 31 franchised stores at year-end 2024, up from 29, providing an operating base larger than a very small startup system.
• Affiliate-store data includes a disclosed cost of goods ratio of 26.1%, which gives at least one operating cost reference point.
• No company-owned stores remained at year-end 2024, so the system is fully franchised based on the disclosed outlet count.

Considerations

• Initial investment of $249,500 to $656,500 is a substantial capital commitment for one store.
• Ongoing fees can stack: 6% royalty, 2% marketing fee, fixed $10,000 annual local marketing, and possible cooperative contributions.
• Revenue variation is significant, with reported gross sales ranging from $431,344 to $2,120,516.
• The owner involvement requirement points away from passive ownership.
• Item 19 excludes 7 of 31 franchised stores, so the reported figures do not represent the full franchised base.

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This franchise may fit someone prepared to run or closely supervise a retail food location, commit meaningful startup capital, and manage a business where sales can vary materially by unit.

It likely does not fit a passive investor seeking minimal involvement, or a buyer who needs a low-cost entry point or clear evidence of store-level profitability.

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• The disclosure does not clearly establish territory exclusivity, so competitive overlap risk is hard to assess from the available information.
• The franchisor entity was formed in 2022, which means the current franchisor itself has a limited operating history as an offering entity.
• There are 0 company-owned stores at year-end 2024, so there is no current company-store operating base disclosed in Item 20 for direct comparison.
• If the franchisor steps in to manage a store in certain circumstances, the fee is 15% of gross sales plus expenses, which could be material.
• The franchise term is 10 years, so the investment decision involves a relatively long contractual commitment.

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16 Handles Store presents a retail food service model with meaningful disclosed gross sales data, but the economics should be viewed through the lens of high startup cost, active operating demands, and wide unit-level revenue dispersion. The main tradeoff is straightforward: there is enough revenue disclosure to frame the range of outcomes, but the business still requires substantial capital and hands-on execution without disclosed proof of profit.

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