Teriyaki Madness franchise
The franchisee operates a fast casual restaurant (a "Teriyaki Shop") in leased retail space, making and selling Japanese-style teriyaki dishes plus other food, beverage and specialty items under the Teriyaki Madness marks and system.
Owner-operator required Disclosed
- Source
- 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness)
- Document
- FDD 2026, issued 2026-03-18, amended 2026-07-30
- Item
- Item 15
- Page
- PDF p. 55
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640360
Item 15 states the business must be managed by the franchisee or, for an entity franchisee, by a Managing Owner, and that the franchisor may allow a Designated Manager to supervise day-to-day operations only under certain circumstances. A Designated Manager must complete the training programs but need not hold equity. Item 1 defines the Managing Owner as a natural person holding at least 51% of the ownership interest and voting power with chief-executive authority, and requires the Managing Owner or Designated Manager to hold ServSafe Manager certification. For a partnership franchisee, one owner must hold more than 50% of the voting equity.
What stands out
- Single-unit initial investment of $392,967 to $1,122,005 (Item 7 Table A), of which $72,500 is due to the franchisor and its affiliate at signing: a $45,000 Initial Franchise Fee plus a $27,500 Shop Opening Assistance Fee.
- Ongoing fees: 6% royalty and 4% Marketing Fund contribution on Net Sales, collected weekly by EFT, plus $395 a month for technology and a recommended 2% of Net Sales on local advertising that the franchisor may make mandatory.
- Item 19 discloses gross sales only for a qualifying subset: 140 of 197 franchised shops averaged $1,113,760 in 2025, median $1,025,162, with 40% at or above the average and a low of $470,449. The average was higher in 2024 at $1,177,195.
7 more observations
- Cost and profit tables (average and median income statements with EBITDA) exist in Item 19 but are images in the reviewed PDF; no figures from them are recorded here.
- Franchised outlets grew from 122 to 197 between 2023 and 2025, with 108 openings against 33 exits (15 terminations, 4 reacquisitions, 14 ceased for other reasons). Company-owned outlets stood at 2.
- 70 franchise agreements were signed but unopened at December 31, 2025 — the cover page flags this as a state-required risk — against a projection of 41 new franchised openings the following year.
- No exclusive territory. The Area of Protection covers a population of roughly 25,000, but the franchisor reserves the internet, captive-audience venues, other brands, retail and wholesale distribution, and catering and delivery inside the area.
- Owners personally guarantee the franchisee's obligations through the Owners Agreement; disputes are mediated and arbitrated in Denver, Colorado, under Colorado law.
- Item 8 estimates required purchases at about 85% of the cost to establish a shop and 75% of the cost to operate it; the franchisor received $2,235,447 in supplier rebates tied to franchisee purchases in 2025, 14% of its total revenue.
- Two arbitrations against former franchisees were pending at the document date, both with counterclaims alleging misrepresentation, inadequate support or misuse of marketing funds; the cover page carries a state-required statement questioning the guarantor's financial condition.
Things to verify
- Ask what the average and median income statements in Item 19 actually show — cost of goods, labour, occupancy, other operating expenses and EBITDA — for the 140-shop group and for each tenure cohort, since those tables could not be read from the reviewed PDF.
- Ask why average gross sales fell from $1,177,195 in 2024 to $1,113,760 in 2025 and how much of the drop reflects the 35 newer shops added to the reporting group.
- Ask about the 45 shops open less than a year and the 8 with incomplete profit and loss statements that were excluded from Item 19 for 2025.
6 more questions
- Review the Item 21 financial statements and the affiliate guaranty in light of the cover page's state-required statement about the guarantor's financial condition.
- Ask how long the 70 signed-but-unopened franchises have been pending and what is delaying them, given the $2,500 monthly Extension Fee and the non-curable default for failing to open within 480 days.
- Confirm the total cash needed at signing and before opening, including the $27,500 Shop Opening Assistance Fee, the $10,000 grand opening promotion fee and pre-opening technology fees, since no minimum liquidity or net worth requirement is disclosed.
- Ask whether the 2% local advertising recommendation is being made mandatory, and how the Marketing Fund's 23.35% team-overhead allocation is determined.
- Check the practical reach of the two-year, 25-mile post-term non-compete, which is measured from every Teriyaki Madness location in the system rather than only the franchisee's own shop.
- Speak with franchisees in the states where shops ceased operations in 2024 — Arizona, Florida, Michigan and Wisconsin — and with the former franchisees named in Item 3.
Category cost placeholders, not a forecast. Owner operation is required; a manager-pay deduction does not make this an absentee model. This snapshot uses the default inputs; the calculator below updates when you edit them.
Evidence confidence: High. This describes source support, not investment quality. AI-extracted and machine-verified where stated; no human line-by-line review. Source and review record.
Read the full research overview
Teriyaki Madness franchisees operate a fast casual restaurant of roughly 1,300 to 1,800 square feet, serving Japanese-style teriyaki dishes and other food and beverage items under a franchise agreement with M. H. Franchise Company Inc. of Denver, Colorado. The franchisor was formed in 2016 and its predecessor began franchising the concept in June 2005. Two packages are offered: a single shop, or a Development Agreement covering three shops.
A single shop carries an estimated initial investment of $392,967 to $1,122,005, assuming leased premises, no real estate purchase and three months of additional funds. Of that, $45,000 is the Initial Franchise Fee to the franchisor and $27,500 is a mandatory Shop Opening Assistance Fee to its affiliate, both due in a lump sum at signing, with a further $10,000 grand opening promotion fee at the start of construction. Ongoing fees are 6% of Net Sales in royalty, 4% to the Marketing Fund, $395 a month for technology, and a recommended (not yet mandatory) 2% of Net Sales on local advertising. The term is 10 years with two five-year renewals; transfers cost $25,000 plus a $20,000 re-opening fee and are subject to a 30-day right of first refusal. Owners must sign an Owners Agreement personally guaranteeing the franchisee's payments and performance. No minimum liquidity or net worth requirement is disclosed in the reviewed source.
Item 19 reports gross sales only. For calendar 2025, the 140 U.S. franchised shops that were open at least a year, sat in traditional locations and filed complete profit and loss statements averaged $1,113,760 in gross sales, with a median of $1,025,162, a range of $470,449 to $2,965,050, and 40% of shops at or above the average. Fifty-seven franchised shops, including all 45 opened during the year, are excluded, as are company-owned outlets. The average fell from $1,177,195 in 2024. Item 19 also contains average and median income statements with EBITDA by tenure cohort, but those tables are images in the reviewed PDF and no figures from them are recorded here, so this record shows no cost or profit data.
Item 20 shows a growing system: franchised outlets rose from 122 to 197 over 2023 to 2025 on 108 openings, against 15 terminations, 4 reacquisitions and 14 shops that ceased for other reasons — 13 of those in 2024 alone. Transfers fell from 16 in 2023 to 8 in each of the next two years. Company-owned outlets ended 2025 at two. The franchisor projects 41 new franchised openings in the following year and reports 70 signed agreements for outlets not yet open, a gap flagged as a risk on the cover page. Item 3 discloses two unresolved arbitrations the franchisor brought against former franchisees, in both of which the former franchisees have counterclaimed, and the cover page carries a state-required statement questioning the guarantor's financial ability to support franchisees.
View ratings and their supporting evidence
Transparent ratings
How these are computedEach dimension is scored 1–5 from published formulas. Missing data yields “Not enough evidence to rate”, never a low score. There is no composite score by design.
How the system has performed, computed from the disclosed Items 7, 19 and 20. Figures a documented material source inconsistency puts in doubt are excluded, and the dimension shows “Not rated”.
Inputs
- Franchised outlets 122 → 197 (Item 20, Table 3)
- Thresholds: ≥15% → 5; 5–15% → 4; 0–5% → 3; −5–0% → 2; below −5% → 1
Inputs
- Attrition = (terminations + non-renewals + reacquisitions + ceased-other) ÷ start-of-year franchised units, averaged over 3 fiscal years
- Thresholds: <2% → 5; 2–4% → 4; 4–6% → 3; 6–10% → 2; >10% → 1
Inputs
- AUV $1,113,760 (disclosed) ÷ midpoint investment $757,486 = 1.47×
- Thresholds: ≥2.0 → 5; 1.5–2.0 → 4; 1.0–1.5 → 3; 0.7–1.0 → 2; <0.7 → 1
How much this brand’s FDD discloses, and how well-supported our data on it is. This measures transparency, not business performance — a strong business that discloses little scores low here and stays unrated above.
Inputs
- Item 19 present (+1)
- Average plus median or a distribution (+1)
- Population 71% of franchised units, clearly described (+1)
- Cost or profit data disclosed (+1)
- Multi-year or cohort data (+1)
- Franchisor Track Record
- Franchising 21 years (since 2005) · 199 outlets · Item 3: 2 matter(s) disclosed · Item 4: bankruptcy disclosure present
- Multi-Unit Scalability
- Two packages are offered. A Single Franchise grants one shop at an approved location and is granted case by case, with no further development rights once ope… · Owner-operator required
- Operational Intensity
- Owner-operator required
Initial investment
FDD Items 5 and 7Format shown: Single Franchise — one traditional Teriyaki Shop in leased retail space of roughly 1,300–1,800 sq ft (Item 7 Table A)
$392,967–$1,122,005 total initial investment. Excludes real estate purchase. Includes 3 months of additional funds.
View full investment breakdown — Items 5 & 7
| Initial franchise fee (the named Item 5 fee only) | $45,000 Disclosed
15% discount ($38,250) available to hospitality management/ownership applicants; not the standard new single-unit franchisee rate. Other required Item 5 payments to the franchisor are listed separately below — this figure is the named fee only. |
|---|---|
| Other required initial payments to the franchisor (Item 5) |
|
| Total Item 5 payments to franchisor/affiliates | $83,700 Derived
$84,000 Derived
|
| Total initial investment — low | $392,967 Disclosed
Total estimated initial investment for one Single Franchise. The 23 line items foot exactly to this total. |
| Total initial investment — high | $1,122,005 Disclosed
Total estimated initial investment for one Single Franchise. The 23 line items foot exactly to this total. |
| Midpoint of range | $757,486 Derived
|
| Real estate purchase included? | No — assumes a leased site |
| Additional funds assumed | 3 months |
| Required liquid capital | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness); we do not fill gaps with estimates or third-party figures. No minimum liquid capital requirement appears on the cover pages or in Items 1, 5, 7 or 15 of the reviewed document. |
| Required net worth | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness); we do not fill gaps with estimates or third-party figures. No minimum net worth requirement appears in the reviewed document. |
Item 7 Table A covers one Single Franchise in leased retail space; it assumes no purchase of real estate and includes three months of additional funds ($10,000–$40,000). The line items sum exactly to the stated $392,967 and $1,122,005 totals. Of that, the cover page states $83,700 to $91,500 is payable to the franchisor or its affiliates; adding the post-opening portion of the Item 7 technology fee line brings the amounts payable to the franchisor or affiliates in Table A to $84,885–$92,685, so the cover-page figure appears to count only the pre-opening technology fee. Item 7 Table B covers the three-shop Standard Franchise: a $99,000 Initial Franchise Fee plus the cost of opening the first shop, for a total of $446,967–$1,176,005; the remaining two shops' build-out costs are not included in that total. The franchisor states it offers no direct or indirect financing (Item 10).
Item 7 line items (23)
| Expenditure | Low | High |
|---|---|---|
| Initial Franchise Fee — Lump sum to the franchisor at signing of the Franchise Agreement. | $45,000 | $45,000 |
| Shop Opening Assistance Fee — Lump sum to affiliate MH International at signing; mandatory for the first shop, optional for later shops under a Development Agreement. | $27,500 | $27,500 |
| Site Survey | $3,000 | $7,500 |
| Rent, Security Deposit, Utility Deposit — Assumes roughly 1,300–1,800 sq ft at $1.47–$6.67 per sq ft monthly base rent, three months' rent plus deposits; excludes triple-net charges. | $11,782 | $41,160 |
| Permit Expeditor | $0 | $4,500 |
| Leasehold Improvements — Low estimate assumes the space needs no additional HVAC, ventilation, plumbing, electrical, gas, restrooms or grease traps. | $156,000 | $605,000 |
| Furniture, Fixtures and Equipment | $54,000 | $181,000 |
| Architect — Must use an approved Teriyaki Madness architect. | $22,500 | $43,000 |
| Initial Inventory and Supplies | $15,500 | $18,800 |
| Insurance — Covers 3 to 6 months. | $1,500 | $5,000 |
| Business Licenses and Permits | $1,000 | $10,860 |
| Professional Fees | $2,500 | $4,000 |
| Exterior Signage | $6,500 | $26,000 |
| Interior Branding/Graphics | $6,800 | $10,000 |
| Security and Music System | $1,600 | $2,000 |
| Required Technology and Security System — Point-of-sale system, hardware, communications and security equipment from approved suppliers. | $12,600 | $21,000 |
| Office Equipment and Supplies | $1,000 | $4,000 |
| Grand Opening Promotion — Paid to the franchisor or its affiliate at the start of construction. | $10,000 | $10,000 |
| Uniforms | $600 | $1,000 |
| Initial and Hands-On Training Expenses — Travel and related costs for two attendees; the franchisor charges no tuition for the first shop. | $1,200 | $4,500 |
| Extension Fee — High estimate assumes a three-month extension at $2,500 per month for missing lease-signing or opening deadlines. | $0 | $7,500 |
| Technology Fee — Pre-opening fee of $99.95 per month for an assumed 13–16 months plus three months of the $395 post-opening fee. | $2,385 | $2,685 |
| Additional Funds – 3 Months | $10,000 | $40,000 |
Source for every row: the Item 7 estimated-initial-investment table of 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness) (table begins PDF p. 25) — rows inherit the table's citation rather than carrying fifteen identical ones.
Other formats disclosed in Item 7 (1)
| Format | Low | High | Fee |
|---|---|---|---|
| Standard Franchise — Development Agreement for three Teriyaki Shops (includes cost of opening the first shop) | $446,967 | $1,176,005 | $99,000 |
Ongoing fees
FDD Item 6Royalty
6% of net sales Disclosed
- Source
- 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness)
- Document
- FDD 2026, issued 2026-03-18, amended 2026-07-30
- Item
- Item 6
- Page
- PDF p. 16
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640360
Debited weekly by EFT each Thursday on the prior week's Net Sales. Net Sales include in-store, carry-out, online, delivery, catering and gift-card redemptions but exclude sales taxes, customer discounts, bona fide refunds, third-party delivery/aggregator fees and supplier rebates.
Brand advertising fund
4% of net sales Disclosed
- Source
- 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness)
- Document
- FDD 2026, issued 2026-03-18, amended 2026-07-30
- Item
- Item 6
- Page
- PDF p. 16
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640360
Marketing Fund Contribution, collected with the royalty. Item 11 states other franchisees may contribute at a different rate and that franchisor- and affiliate-owned shops are not obliged to contribute. In the fiscal year ended December 31, 2025 the fund reported spending 23.35% on team overhead.
Local marketing
Not disclosed in the reviewed source Not disclosed
Not disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness); we do not fill gaps with estimates or third-party figures.
Item 11 recommends, rather than requires, spending 2% of Net Sales per calendar quarter on local advertising, and states the franchisor may make this minimum mandatory on notice. All local advertising materials require prior approval.
Core requirements shown separately; caps, credits and conditions may overlap. Check the full schedule for technology, cooperative, transfer and other charges.
View all recurring fees and conditions
| Royalty | 6% of net sales Disclosed
Debited weekly by EFT each Thursday on the prior week's Net Sales. Net Sales include in-store, carry-out, online, delivery, catering and gift-card redemptions but exclude sales taxes, customer discounts, bona fide refunds, third-party delivery/aggregator fees and supplier rebates. Debited weekly by EFT each Thursday on the prior week's Net Sales. Net Sales include in-store, carry-out, online, delivery, catering and gift-card redemptions but exclude sales taxes, customer discounts, bona fide refunds, third-party delivery/aggregator fees and supplier rebates. |
|---|---|
| Advertising / brand fund | 4% of net sales Disclosed
Marketing Fund Contribution, collected with the royalty. Item 11 states other franchisees may contribute at a different rate and that franchisor- and affiliate-owned shops are not obliged to contribute. In the fiscal year ended December 31, 2025 the fund reported spending 23.35% on team overhead. Marketing Fund Contribution, collected with the royalty. Item 11 states other franchisees may contribute at a different rate and that franchisor- and affiliate-owned shops are not obliged to contribute. In the fiscal year ended December 31, 2025 the fund reported spending 23.35% on team overhead. |
| Required local marketing | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness); we do not fill gaps with estimates or third-party figures. Item 11 recommends, rather than requires, spending 2% of Net Sales per calendar quarter on local advertising, and states the franchisor may make this minimum mandatory on notice. All local advertising materials require prior approval. |
| Technology / software | $395/month Disclosed
Per Teriyaki Shop, beginning when the shop opens. A reduced pre-opening technology fee of $99.95 per month applies to the first shop from signing until opening. The franchisor may raise the fee on 30 days' notice; increases above $650 per month are capped at 10% a year. Per Teriyaki Shop, beginning when the shop opens. A reduced pre-opening technology fee of $99.95 per month applies to the first shop from signing until opening. The franchisor may raise the fee on 30 days' notice; increases above $650 per month are capped at 10% a year. |
| Transfer fee | $25,000 one-time Disclosed
Payable on transfer of the shop, of ownership of the franchisee entity, or of the Franchise Agreement. A $20,000 grand re-opening advertising fee and the franchisor's brokerage/finder's costs are also payable on a qualifying transfer. Payable on transfer of the shop, of ownership of the franchisee entity, or of the Franchise Agreement. A $20,000 grand re-opening advertising fee and the franchisor's brokerage/finder's costs are also payable on a qualifying transfer. |
| Renewal fee | $5,000 one-time Disclosed
Payable when a renewal franchise agreement is signed. The franchisor states it waives renewal fees for franchisees who have signed a Development Agreement and met their Development Schedule. Payable when a renewal franchise agreement is signed. The franchisor states it waives renewal fees for franchisees who have signed a Development Agreement and met their Development Schedule. |
| Royalty + ad fund (% of sales) | 10% Derived
|
Fee schedule (28 fees; 12 verified against the source, 16 single-pass)
Every recurring, conditional and one-time fee found in this FDD's Item 6 table (plus mandatory recurring costs disclosed in Items 7/11), each cited to its page and carrying its verification status: verified means two independent readings agreed or a tie-break re-inspection of the page decided it; single-pass means one reading captured it and it has not been independently confirmed (permitted only for fees that cannot move modeled economics — see the materiality rule). Amounts marked “not stated” are charged at then-current rates the FDD does not quantify and are never modeled as $0.
| Fee | Amount | Frequency | Mandatory | Verification | Cite | Notes |
|---|---|---|---|---|---|---|
| Royalty Fee | 6% of net sales | weekly | Yes | verified (2-pass) | Item 6, p. 16 | Debited weekly by EFT. |
| Marketing Fund Contribution | 4% of net sales | weekly | Yes | verified (2-pass) | Item 6, p. 16 | Company- and affiliate-owned shops are not obligated to contribute (may do so voluntarily); other franchisees may contribute at a different rate. Collected with the royalty via weekly EFT. |
| Grand Re-Opening Advertising | $20,000 | per event | No | single-pass | Item 6, p. 16 | Payable on a Teriyaki Shop relocation (at lease signing or shop closure, whichever first) or on an approved transfer of substantially all shop assets or majority ownership. [Listed by one verification pass only (A); not independently confirmed.] Distinct from the one-time Grand Opening Promotion Fee ($10,000) paid at initial construction, which is captured in Item 7. |
| Technology Fee | $395 | monthly | Yes | verified (2-pass) | Item 6, p. 16 | May increase on 30 days' notice; increases above $650/month capped at 10%/year. |
| Continuing, Refresher, Additional, Replacement, Training or Assistance Fees | $500 | per event | No | verified (tie-break) | Item 6, p. 17 | No charge for initial and hands-on training of the first shop's Managing Owner and initial Designated Manager. Charged for newly hired personnel, refresher courses, additional consultations or special assistance, and every replacement Managing Owner or Designated Manager (Item 15). Franchisee also reimburses trainer travel, transportation, meals and lodging if training is held at the shop. Pass C blend: the disclosed rate is a fixed $500 per person per day (Pass B's amount_type), on a per-person basis (Pass A's basis), incurred per training event. |
| Conference Fee | $2,000 | annual | Yes | verified (2-pass) | Item 6, p. 17 | Currently only regular required conference is the annual convention; may be charged whether or not franchisee attends. Increases limited to 10%/year with 30 days' notice. |
| Transfer Fee | $25,000 | one time | No | single-pass | Item 6, p. 18 | Payable in connection with a transfer of the Teriyaki Shop, legal-entity ownership, or the Franchise Agreement. [Listed by one verification pass only (A); not independently confirmed.] |
| Renewal Franchise Fee | $5,000 | one time | No | single-pass | Item 6, p. 18 | Waived in full if franchisee signed a Development Agreement and fulfilled its Development Schedule. [Listed by one verification pass only (A); not independently confirmed.] |
| Relocation Fee | $12,500 | one time | No | single-pass | Item 6, p. 18 | Payable upon a franchisee-submitted request to relocate the Teriyaki Shop. [Listed by one verification pass only (A); not independently confirmed.] |
| Food Safety Audit | $300–$3,300 | varies | No | single-pass | Item 6, p. 18 | Only if the shop fails to receive a low-risk score on a food safety audit. [Listed by one verification pass only (A); not independently confirmed.] value=audit-only estimate; range_high adds the estimated retraining cost. |
| Audit (of Royalty/Marketing Fund payments) | $1,000–$15,000 | varies | No | single-pass | Item 6, p. 18 | Only if an audit reveals an understatement of Royalty Fees, Marketing Fund Contributions or other fees, or the franchisee fails to cooperate. [Listed by one verification pass only (A); not independently confirmed.] Franchisor estimates audit cost at $1,000-$15,000, plus interest on any underpayment. |
| Taxes | Not stated | varies | No | verified (tie-break) | Item 6, p. 19 | Payable on demand if federal, state or local authorities assess sales, gross receipt, excise, use or similar taxes on payments to the franchisor; income taxes excluded. Page confirmed at physical PDF p.19. |
| Credit Card Service Fee | 3% of other | per event | No | verified (tie-break) | Item 6, p. 19 | Only if the franchisor allows payment by credit card and the franchisee elects to use one; the default payment method is EFT. |
| Gift Card Processing Fee | $13 | monthly | Yes | verified (2-pass) | Item 6, p. 19 | May increase; if payable to franchisor/affiliate, increases limited to the greater of actual cost increase or 10%/year, with 30 days' notice. |
| Indemnification | Not stated | varies | No | single-pass | Item 6, p. 19 | As incurred; tied to claims/losses related to the franchisee's business. [Listed by one verification pass only (A); not independently confirmed.] |
| Legal Costs and Professional Fees | $1,500 | varies | No | single-pass | Item 6, p. 19 | Triggered by the franchisee's operational non-compliance, breach, or termination of the Franchise Agreement. [Listed by one verification pass only (A); not independently confirmed.] $1,500 is a stated floor; total legal costs vary with circumstances. |
| De-Identify Premises | Not stated | one time | No | single-pass | Item 6, p. 20 | Only if the franchisee fails to de-identify the shop after expiration/termination. [Listed by one verification pass only (A); not independently confirmed.] |
| Insurance | 20% of other | per event | No | verified (tie-break) | Item 6, p. 20 | Payable on demand only if the franchisee fails to obtain or maintain required insurance and the franchisor elects to obtain it instead. Pass A's model_treatment 'excluded_immaterial' changed to 'not_recurring': the charge is conditional rather than small. |
| Liquidated Damages | Not stated | one time | No | single-pass | Item 6, p. 20 | Payable if the franchisor terminates for cause or the franchisee terminates without cause. [Listed by one verification pass only (A); not independently confirmed.] Formula detailed in Item 6 footnote 5 (PDF p.23). |
| Maintenance Fee | Not stated | varies | No | single-pass | Item 6, p. 20 | If the franchisor undertakes maintenance/repair the franchisee failed to perform after notice of a deficiency. [Listed by one verification pass only (A); not independently confirmed.] |
| Failure to Submit Required Reports | $100 | varies | No | single-pass | Item 6, p. 21 | Penalty for failing to submit a requested report within 5 days. [Listed by one verification pass only (A); not independently confirmed.] Fines collected are paid to the Marketing Fund. |
| Supplier and Product Evaluation Fee | Not stated | varies | No | single-pass | Item 6, p. 21 | Only if the franchisor inspects/tests product samples from a supplier the franchisee proposes. [Listed by one verification pass only (A); not independently confirmed.] Franchisor states it does not currently charge this fee but reserves the right to. |
| Customer Satisfaction Reimbursement | Not stated | varies | No | single-pass | Item 6, p. 21 | Franchisor may remedy customer issues at its sole discretion and charge the cost back to the franchisee. [Listed by one verification pass only (A); not independently confirmed.] |
| Interim Manager Fee | $500 | varies | No | single-pass | Item 6, p. 21 | If the franchisor/affiliate manages the shop after a material breach, or an owner/manager's absence, termination, death or disability. [Listed by one verification pass only (A); not independently confirmed.] |
| Broker Fees | Not stated | one time | No | single-pass | Item 6, p. 21 | If the franchisee transfers the business to a third party/purchaser. [Listed by one verification pass only (A); not independently confirmed.] |
| Required Local Advertising Spend | 2% of net sales | quarterly | No | verified (2-pass) | Item 11, p. 38 | Franchisor may make this minimum mandatory upon notice to the franchisee. |
| Required Technology and Security System (ongoing maintenance) | Not stated | monthly | Yes | verified (tie-break) | Item 7, p. 26 | Ongoing third-party cost of maintaining the Required Technology and the designated security system; separate from and in addition to the franchisor's $395 per month Technology Fee. Item 7 note 16, read with Item 11. Must be installed by an approved supplier. Does not overlap the Technology Fee, which is a separate payment to the franchisor. |
| Advertising cooperative contribution | Not stated | varies | No | verified (tie-break) | Item 11, p. 38 | None exist as of this FDD; the franchisor reserves no current requirement to join one. Affirmative disclosure that no cooperative exists, which is why evidence is 'disclosed' rather than 'not_disclosed'. |
Item 11 states no advertising councils or cooperatives have been formed and none are required, so no cooperative fee is disclosed. Other Item 6 charges are contingent rather than recurring: audit costs (estimated $1,000–$15,000) plus interest where an understatement is found, a food safety re-audit (about $300) and retraining (about $3,000) after a non-low-risk score, insurance reimbursement plus a 20% administration charge, a $1,500 minimum administrative cost within legal-cost reimbursement, de-identification costs, indemnification, taxes on payments, a supplier and product evaluation fee (not currently charged), customer satisfaction reimbursement, and liquidated damages on termination for cause equal to the shop's combined average monthly royalty and marketing contributions multiplied by the lesser of 36 or the months remaining in the term.
Financial performance (Item 19)
What the franchisor actually disclosedWho is represented: United States franchised Teriyaki Shops that (a) had been open at least one year at the end of the year, (b) were in traditional locations, and (c) supplied the franchisor with complete monthly profit and loss statements. For calendar 2025 that is 140 of the 197 franchised shops open at December 31, 2025; the 57 excluded shops comprise 45 open less than a year, 4 in non-traditional spaces and 8 with incomplete profit and loss statements. Company-owned outlets are not included. The quartile tables use a slightly different third condition — shops in good standing under their Franchise Agreement — and draw on point-of-sale data rather than franchisee profit and loss statements.
Qualifications: The gross sales tables cover only U.S. franchised shops that were open at least a year, sat in traditional locations and gave the franchisor complete monthly profit and loss statements — 140 of 197 franchised shops for 2025, so 57 shops (including all 45 opened within the year) are excluded. Company-owned outlets are excluded. The figures are Gross Sales before cost of goods, labour, occupancy, royalties, marketing contributions and all other expenses, and the franchisor states they do not reflect what must be deducted to reach net income. The averages are pulled up by a small number of high performers: only 40% of the 2025 population reached the average, the lowest qualifying shop recorded $470,449 and the highest $2,965,050. Average annual gross sales fell from $1,177,195 in 2024 to $1,113,760 in 2025 even as the qualifying population grew from 105 to 140 shops, so the mix shifted toward newer shops. The quartile tables rest on point-of-sale data and a good-standing condition rather than complete profit and loss statements, and the FDD does not state how many shops sit in each quartile. Item 19 also contains average and median income statements (including EBITDA) for the 140-shop group and for six tenure cohorts, but those tables are embedded as images and no figures could be read from the text layer of the reviewed PDF, so none are recorded here. The franchisor says written substantiation is available on reasonable request.
View full Item 19 disclosure and tables
Item 19 is a historical financial performance representation. It reports gross sales — revenue, not profit — for the subset of U.S. franchised Teriyaki Shops that were open at least a year, sat in traditional locations and submitted complete profit and loss statements. For calendar 2025 that group was 140 of 197 franchised shops: average annual gross sales of $1,113,760, median $1,025,162, a range from $470,449 to $2,965,050, and 40% of shops at or above the average. Comparable 2024 and 2023 figures cover 105 and 96 shops. Quartile tables break 2025 down from a top-quartile average of $1,677,014 to a bottom-quartile average of $698,868. The item also presents average and median income statements with EBITDA for the 140-shop group and for shops grouped by years open, but those tables appear as images in the reviewed PDF and their figures are not captured in this record, so no cost, margin or profit number is reported here. Nothing in Item 19 states what a shop earns after cost of goods, labour, rent, royalties or marketing contributions.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Annual Gross Sales — U.S. franchised traditional shops open 1+ year 40% of units met or exceeded 56 of the 140 shops (40%) reached or exceeded this average. | System (qualifying shops) Average | $1,113,760 | 140 | CY2025 | FDD p.65 |
| Annual Gross Sales — U.S. franchised traditional shops open 1+ year | System (qualifying shops) Median | $1,025,162 | 140 | CY2025 | FDD p.65 |
| Highest annual Gross Sales of any qualifying shop | System (qualifying shops) High | $2,965,050 | 140 | CY2025 | FDD p.65 |
| Lowest annual Gross Sales of any qualifying shop | System (qualifying shops) Low | $470,449 | 140 | CY2025 | FDD p.65 |
| Annual Gross Sales — U.S. franchised traditional shops open 1+ year 46% of units met or exceeded 105 of the 156 franchised shops open at December 31, 2024 met the conditions; 48 shops (46%) reached or exceeded the average. | System (qualifying shops) Average | $1,177,195 | 105 | CY2024 | FDD p.65 |
| Annual Gross Sales — U.S. franchised traditional shops open 1+ year | System (qualifying shops) Median | $1,122,966 | 105 | CY2024 | FDD p.65 |
| Annual Gross Sales — U.S. franchised traditional shops open 1+ year 42% of units met or exceeded 96 of the 138 franchised shops open at December 31, 2023 met the conditions; 43 shops (42%) reached or exceeded the average. | System (qualifying shops) Average | $1,090,110 | 96 | CY2023 | FDD p.65 |
| Annual Gross Sales — U.S. franchised traditional shops open 1+ year | System (qualifying shops) Median | $1,014,900 | 96 | CY2023 | FDD p.65 |
| Annual Gross Sales — first (highest) quartile 31% of units met or exceeded The FDD does not state how many shops make up each quartile; it reports that 11 shops (31%) in this quartile were at or above the quartile average. Quartile range for 2025 was $1,354,466 to $2,965,050. | Top quartile Quartile avg. | $1,677,014 | n/s | CY2025 | FDD p.66 |
| Annual Gross Sales — first (highest) quartile Quartile size not stated in the FDD. | Top quartile Quartile median | $1,533,764 | n/s | CY2025 | FDD p.66 |
| Annual Gross Sales — second quartile 49% of units met or exceeded Quartile size not stated; 17 shops (49%) were at or above the quartile average. Quartile range $1,026,416 to $1,330,169. | Second quartile Quartile avg. | $1,152,907 | n/s | CY2025 | FDD p.66 |
| Annual Gross Sales — third quartile 46% of units met or exceeded Quartile size not stated; 16 shops (46%) were at or above the quartile average. Quartile range $830,692 to $1,023,908. | Third quartile Quartile avg. | $926,253 | n/s | CY2025 | FDD p.66 |
| Annual Gross Sales — fourth (lowest) quartile 63% of units met or exceeded Quartile size not stated; 22 shops (63%) were at or above the quartile average. Quartile range $470,449 to $818,564. | Bottom quartile Quartile avg. | $698,868 | n/s | CY2025 | FDD p.66 |
| Annual Gross Sales — fourth (lowest) quartile Quartile size not stated in the FDD. | Bottom quartile Quartile median | $716,237 | n/s | CY2025 | FDD p.66 |
System health (Item 20)
Outlets, openings, exits and transfers by fiscal year · U.S. onlyView detailed Item 20 tables and source notes
| Fiscal year | Start | Opened | Terminated | Not renewed | Reacquired | Ceased — other | End | Transfers | Company-owned (end) |
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 122 | 27 | 10 | 0 | 1 | 0 | 138 | 16 | 1 |
| 2024 | 138 | 35 | 3 | 0 | 1 | 13 | 156 | 8 | 2 |
| 2025 | 156 | 46 | 2 | 0 | 2 | 1 | 197 | 8 | 2 |
Disclosed 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness), Item 20, Tables 1–3 (PDF p. 82). All three Table No. 3 totals rows reconcile: 122+27-10-1=138 (2023), 138+35-3-1-13=156 (2024) and 156+46-2-2-1=197 (2025). Franchised outlets grew by 75 over the three years (122 to 197) on 108 openings against 15 terminations, 4 reacquisitions and 14 shops that ceased operations for other reasons. The heaviest closure year was 2024, when 13 shops ceased for other reasons, including four in Arizona, three in Florida, two in Michigan and two in Wisconsin. Company-owned outlets stayed at two at the end of 2025 after the franchisor reacquired two and sold two to franchisees during the year; one Nevada outlet reacquired by the franchisor was sold on to another franchisee. Transfers to new owners fell from 16 in 2023 to 8 in each of 2024 and 2025. Every state row is a U.S. state, so the counts are treated as U.S.-only.
Source data notes (5) — inconsistencies found in the FDD itself during verification
Our verification re-reads every table. Where the FDD's own printed tables disagree, we document the discrepancy rather than silently "fixing" it. Classes: B = arithmetic error in the source's derived column; C = the printed tables genuinely disagree; D = a legitimate definitional difference (e.g., transfers netted, explained by a footnote); E = unresolved ambiguity. Figures a material C/E issue puts in doubt are excluded from our derived metrics, scores and rankings.
- [A/minor] Table 3 2025: The Nevada FY2025 'Outlets Opened' cell renders in the text layer as '21' because the printed value is '2' followed by superscript footnote marker 1. Taken literally the 2025 opened column would sum to 65 against the printed TOTAL of 46, and the Nevada row would not foot (22 + 21 - 1 - 1 = 41, not 22). — Page image confirms the cell is '2 with footnote 1'. Nevada FY2025 is start 22, opened 2, terminated 0, non-renewals 0, reacquired 1, ceased-other 1, end 22, which foots. Summing all state rows with Nevada = 2 gives 46 openings, exactly the printed 2025 TOTAL, and Table 1 corroborates 156 -> 197. Page 87.
- [A/minor] Table 3 2024: The Illinois 2024 and Minnesota 2024 rows print the year on a line separate from the figures, so a naive text-layer parse can orphan the figures or attach them to the wrong year. — Correct rows are Illinois 2024 = 5 / 2 / 0 / 0 / 0 / 0 / 7 (page 85) and Minnesota 2024 = 1 / 0 / 0 / 0 / 0 / 0 / 1 (page 86). With these the 2024 state rows sum exactly to the printed TOTAL 138 / 35 / 3 / 0 / 1 / 13 / 156, corroborated by Table 1 (138 -> 156).
- [C/minor] Table 3 2025: The Table 3 footnote attached to Nevada FY2025 says 'One outlet that was reacquired by the franchisor was sold by the franchisor to another franchisee,' but Table No. 4 shows Nevada 2025 with 'Outlets Sold to Franchisee' = 2 (start 1 + 1 reacquired - 2 sold = 0 at year end), which is also what Table 3's Nevada opened count of 2 implies. The footnote undercounts the franchisor-to-franchisee resales by one. — Genuine disagreement between two printed parts of the same document; the tables themselves are internally consistent (Table 3 Nevada opened = 2, Table 4 sold to franchisee = 2, Table 4 TOTAL 2 + 2 - 2 = 2), so the narrative footnote is the erroneous element. All TOTAL rows are corroborated by Table 1 (156 -> 197 franchised, 2 -> 2 company-owned, 158 -> 199 total). Pages 87 (footnote) and 89 (Table 4).
- [D/minor] Table 2 2025: Outlets the franchisor sells back to a franchisee appear in Table 4's 'Outlets Sold to Franchisee' column and inside Table 3's 'Outlets Opened' column, but are absent from Table No. 2, so Table 2 understates total ownership changes (8 recorded transfers in 2025 versus 8 plus 2 franchisor resales). — Definitional, not an error: Table 2's own heading limits it to 'Transfers of Outlets from Franchisees to New Owners (Other Than the Franchisor)'. Table 2 foots exactly to its printed totals of 16 (2023), 8 (2024) and 8 (2025) across 17 states. Any transfer metric derived from Table 2 should be labelled as excluding franchisor resales. Pages 83 and 89.
- [D/minor] Table 1 2025: Item 20 reports 197 franchised outlets at 12/31/2025 while the Item 19 financial performance representation covers only 140 shops, and Table 5 shows 70 franchise agreements signed but not opened against only 41 projected openings for the next fiscal year. — Item 19 explains the gap on its face: 'As of December 31, 2025, we had 197 franchised Teriyaki Shops. The information in the table above is a historical financial performance representation for the 140 franchised Teriyaki Shops that met' the open-1-plus-years criterion (page 65). Item 20 unit counts are unaffected; the signed-but-unopened backlog is a disclosure the cover page already flags as an 'Unopened Franchises' special risk.
Company-owned outlets (Table 4)
| Year | Start | Opened | Reacquired from franchisee | Closed | Sold to franchisee | End |
|---|---|---|---|---|---|---|
| 2023 | 0 | 0 | 1 | 0 | 0 | 1 |
| 2024 | 1 | 0 | 1 | 0 | 0 | 2 |
| 2025 | 2 | 0 | 2 | 0 | 2 | 2 |
Read: How to read Item 20.
Ownership and operations
Items 11, 12, 15, 17Owner-operator required Disclosed
- Source
- 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness)
- Document
- FDD 2026, issued 2026-03-18, amended 2026-07-30
- Item
- Item 15
- Page
- PDF p. 55
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640360
Item 15 states the business must be managed by the franchisee or, for an entity franchisee, by a Managing Owner, and that the franchisor may allow a Designated Manager to supervise day-to-day operations only under certain circumstances. A Designated Manager must complete the training programs but need not hold equity. Item 1 defines the Managing Owner as a natural person holding at least 51% of the ownership interest and voting power with chief-executive authority, and requires the Managing Owner or Designated Manager to hold ServSafe Manager certification. For a partnership franchisee, one owner must hold more than 50% of the voting equity.
View operating requirements, territory and contract term
| Owner involvement (Item 15) | Owner-operator required Disclosed
Item 15 states the business must be managed by the franchisee or, for an entity franchisee, by a Managing Owner, and that the franchisor may allow a Designated Manager to supervise day-to-day operations only under certain circumstances. A Designated Manager must complete the training programs but need not hold equity. Item 1 defines the Managing Owner as a natural person holding at least 51% of the ownership interest and voting power with chief-executive authority, and requires the Managing Owner or Designated Manager to hold ServSafe Manager certification. For a partnership franchisee, one owner must hold more than 50% of the voting equity. Item 15 states the business must be managed by the franchisee or, for an entity franchisee, by a Managing Owner, and that the franchisor may allow a Designated Manager to supervise day-to-day operations only under certain circumstances. A Designated Manager must complete the training programs but need not hold equity. Item 1 defines the Managing Owner as a natural person holding at least 51% of the ownership interest and voting power with chief-executive authority, and requires the Managing Owner or Designated Manager to hold ServSafe Manager certification. For a partnership franchisee, one owner must hold more than 50% of the voting equity. |
|---|---|
| Initial training | Initial Training Program: about 31 hours over roughly four days at the franchisor's Denver, Colorado facility or another location it chooses, offered at least six times a year and to be completed within 90 days after the Franchise Agreement is signed. Online training on the Mad U platform adds about 14 hours 15 minutes and must be finished before hands-on training. Hands-On Training: 10 days, about 119 hours 30 minutes (12.5 classroom, 107 on-the-job) in Littleton, Colorado, at least 30 days before opening. On-Site Training at the franchisee's own shop runs 10 to 14 days around opening. The franchisee or Managing Owner and the Designated Manager, if any, must attend; there is no tuition for the first shop's attendees, but travel, lodging and wages are the franchisee's cost. Replacement Managing Owners or Designated Managers must repeat the programs and are charged a training fee. Disclosed
|
| Multi-unit / development options | Two packages are offered. A Single Franchise grants one shop at an approved location and is granted case by case, with no further development rights once open. A Standard Franchise uses a Development Agreement for three shops with a $99,000 Initial Franchise Fee payable in full at signing; leases must be executed within 9, 18 and 27 months of the Development Agreement. The Primary Search Area under a Development Agreement is not protected or exclusive, all shops must open in the state containing that area unless the franchisor agrees otherwise, and missing the schedule forfeits the undeveloped shops. Item 5 states that during the last fiscal year the franchisor allowed some existing franchisees to acquire rights to two additional shops for a combined $66,000. Disclosed
Fee amounts are from Item 5 (PDF page 14) and the development schedule from Items 1 and 12. |
| Territory (Item 12) | The franchisee receives an Area of Protection around the approved location, generally covering a population of about 25,000 (possibly fewer where non-resident traffic is high), defined by zip codes, streets, county lines or a map, and not changeable without the franchisee's consent. Within that area the franchisor will not open or franchise another business using the marks and system. The FDD states plainly that the franchisee does not receive an exclusive territory: the franchisor and its affiliates reserve the right to operate under other brands inside the area, to use the marks at airports, stadiums, campuses, military bases, malls, grocery and convenience stores, food trucks and other captive-audience venues inside or outside the area, to sell proprietary products at retail or wholesale, and to reserve the internet as its own channel. Other franchisees and the franchisor may also provide catering and delivery inside the area without compensating the franchisee. No compensation is owed if the franchisor exercises these rights. There is no minimum-performance condition attached to keeping the Area of Protection, and no right of first refusal to acquire additional franchises. Disclosed
|
| Initial term | 10 years Disclosed
Initial term of the Franchise Agreement (Section 3.1). |
| Renewal | Two five-year renewal periods if conditions are met: written notice at least six months before the term ends, full compliance, signing the then-current form of franchise agreement, signing a release, keeping possession of the location, upgrading the shop to current system standards for new shops, and paying a $5,000 renewal fee. The renewal agreement may contain materially different terms and the territory boundaries may change. The franchisor states it waives renewal fees for franchisees who signed a Development Agreement and met their Development Schedule. Disclosed
|
| Staffing | The FDD does not state typical staffing levels or operating hours. Item 7 assumes two people attend the initial and hands-on training programs, and Item 1 requires the Managing Owner or Designated Manager to complete ServSafe Manager certification. Item 15 also requires the franchisee to employ or engage a bookkeeper or accountant capable of running the accounting software and keeping the books. Disclosed
Assembled from Item 7 note 20, Item 1 and Item 15; the FDD gives no headcount or hours-of-operation figures. |
Risk and legal observations
Items 3, 4, 8, 15, 17 — summarized neutrallyLitigation: 2 matter(s) disclosed Disclosed · Bankruptcy: Disclosure present Disclosed
View legal disclosures, restrictions and guarantees
| Litigation (Item 3) | 2 matter(s) disclosed Disclosed Item 3 lists two matters, both arbitrations the franchisor brought against former franchisees before the American Arbitration Association in Denver. In the first, filed May 1, 2026 against a former franchisee and its personal guarantors, the franchisor sought emergency relief to enforce post-termination obligations; the parties settled and a consent award was entered on May 11, 2026, the franchisor petitioned a federal court to confirm the award and obtained a clerk's default, and on May 26, 2026 the respondents nonetheless filed counterclaims for wrongful termination, breach of contract and the implied covenant, fraud and negligent misrepresentation, seeking rescission of the settlement, a declaration that the award is void, damages of not less than $999,999, punitive damages and fees. The franchisor denies the claims; a merits arbitrator was appointed July 15, 2026 and no scheduling order had been entered. In the second, filed October 23, 2024 against a former multi-unit franchisee and its operating entities over the early closure of shops in Arizona and Florida, the respondents counterclaimed against the franchisor and, as third parties, its parent, two affiliates and two individuals, alleging fraudulent inducement and omission, negligent misrepresentation, violations of Arizona, Florida and federal securities laws, the Florida Deceptive and Unfair Trade Practices Act and the Arizona Consumer Fraud Act, including claims of inadequate operational support and misuse of marketing funds. The franchisor denies the allegations, the third-party respondents moved to dismiss for lack of consent to arbitrate, and discovery is under way. Both matters were unresolved as of the document date. |
|---|---|
| Bankruptcy (Item 4) | Disclosure present Disclosed One matter: Patrick Pounders, the franchisor's Executive Director of Franchise Development, filed a Chapter 13 petition in Colorado on May 22, 2017 (In re: Pounders, No. 17-14737-JGR). The reorganization plan was confirmed on September 13, 2017 and the case ended in September 2022. No bankruptcy of the franchisor, its parent or its affiliates is disclosed. |
| Personal guaranty | Required Disclosed
Item 15 requires every owner of an entity franchisee to sign the Owners Agreement (Attachment F to the Franchise Agreement). Section 4 of that agreement, at PDF page 187, has the owners pay all monies payable by the franchisee, unconditionally guarantee full performance of the franchisee's obligations, and indemnify the franchisor, with joint and several liability, no requirement that the franchisor exhaust remedies against the franchisee first, and a waiver of notice. |
| Non-compete | During the term, the franchisee, its owners, officers, directors, affiliates, Designated Managers and their immediate family may not be involved in any way — including as a landlord — with a Competitive Business, divert business or customers, or interfere with the franchisor's vendor relationships; passive ownership of under 5% of a publicly traded competitor is allowed. After termination or expiry, the same people are barred for two years, subject to state law, from any involvement in a Competitive Business within 25 miles of the franchisee's shop, any shop granted under a Development Agreement, or any shop operated by the franchisor, an affiliate or another franchisee at the termination date, and from soliciting customers or interfering with suppliers. A Competitive Business is any non-Teriyaki-Madness business where Asian or teriyaki menu items exceed 20% of total net sales, or whose menu, concept or primary offerings are substantially similar to a Teriyaki Shop. Disclosed
The 25-mile radius applied to every Teriyaki Madness location in the system, not just the franchisee's own, makes the post-term restriction wide in markets with several shops. |
| Transfer restrictions | The franchisor must approve any transfer of the Franchise Agreement, of the shop's operations, management or assets, or of the franchisee entity. Conditions include at least 60 days' written notice, a qualifying transferee, no default by the transferor, payment of the $25,000 transfer fee, a general release from the transferor, payment of the $20,000 grand re-opening marketing fee, the transferee signing a new Franchise Agreement and completing training, refurbishment of the shop, and reimbursement of the franchisor's fees, including its actual brokerage and finder's costs. The franchisor holds a 30-day right of first refusal to buy on the same terms, closing within 60 days; if it declines, the seller has 90 days to close on those terms and any material change restarts the right. On expiry or termination the franchisor may buy some or all shop assets at the lesser of cost or fair market value, excluding franchise rights and goodwill, and may offset amounts owed. Interests must be transferred within six months of an owner's death, divorce or mental incapacity. The Development Agreement itself is not transferable. Disclosed
|
| Termination / non-renewal | The franchisor states it will not terminate without cause. Curable defaults carry 10 days to pay money owed or obtain required insurance and 30 days for everything else. A long list of defaults is non-curable, including failing to open within 480 days of the effective date or 210 days after the lease is executed, failing to execute a lease within nine months, closing for more than three consecutive business days, failing to complete training, intentionally understating revenue, insolvency, felony conviction, unauthorized transfer, two or more violations within 12 months, and standards failures presenting health or safety risks. Cross-default applies: an uncured default under one agreement with the franchisor or its affiliates may terminate all of them. Termination for cause, or termination by the franchisee without cause, triggers liquidated damages equal to the shop's combined average monthly royalty and marketing contribution multiplied by the lesser of 36 or the months left in the term, using a system-wide average where the shop has run under 12 months. Post-termination duties include de-identifying the premises, surrendering customer data, assigning the lease at the franchisor's election, and observing the two-year, 25-mile non-compete. Disclosed
|
| Supplier restrictions (Item 8) | All food and beverage items, marketing materials, uniforms, logo apparel and interior graphics must come from approved suppliers, and architects and general contractors must be drawn from the franchisor's approved list. Computer hardware, software, the point-of-sale system, mobile and online ordering services, and the security and music systems must be bought from approved suppliers to the franchisor's specifications. The franchisor does not publish its supplier-approval standards, and it may charge its inspection cost plus up to a 10% administrative fee to evaluate a supplier the franchisee proposes. MH International, an affiliate, is the only approved supplier of Shop Opening Assistance; the franchisor and its affiliates are not currently approved suppliers of anything else but reserve the right to become sole suppliers and to profit on items sold. In the year ended December 31, 2025 the franchisor received no revenue from direct sales of goods and services to franchisees, but received $2,235,447 from approved suppliers based on franchisee purchases — 14% of its total revenue of $15,453,828. Rebates disclosed include $0.58 to $11.35 per case from food vendors, 3% of purchases from one distributor, a fixed $1,675 for each shop opening in 2026 and $1 per gallon from a beverage supplier, plus possible volume cash-backs. The franchisor estimates required purchases represent about 85% of the cost to establish a shop and 75% of the cost to operate it. There are no purchasing or distribution cooperatives. Disclosed
|
| Dispute resolution | Except for certain claims, all disputes must be mediated and arbitrated in the city of the franchisor's principal place of business, currently Denver, Colorado, and the choice of forum for court proceedings is a state or federal court with jurisdiction over that location. Colorado law governs, subject to applicable state law. The prevailing party in arbitration recovers reasonable costs including arbitrator, filing and legal fees. The cover page carries a state-required risk statement that out-of-state dispute resolution may force a franchisee to accept a less favourable settlement and may cost more than proceeding in the franchisee's own state. Disclosed
|
- The cover page carries a state-required risk statement that the guarantor's financial condition, as reflected in the Item 21 financial statements, calls into question the franchisor's and guarantor's ability to provide services and support. The financial statements themselves were not reviewed for this record.
- The cover page also carries a state-required risk statement about unopened franchises; Item 20 Table No. 5 shows 70 franchise agreements signed as of December 31, 2025 for outlets that had not opened, against 197 open franchised shops.
- No exclusive territory is granted, and the franchisor reserves the internet, alternative channels, captive-audience venues and other brands, and may allow other operators to cater and deliver inside the Area of Protection without compensating the franchisee.
- Failure to sign a lease within nine months or to open within 210 days of signing the lease triggers a $2,500 monthly Extension Fee (up to $7,500) and, at the outer limits, is a non-curable default.
- The franchisor may make the recommended 2% local advertising spend mandatory on notice, and may raise the technology fee on 30 days' notice.
- Item 8 states required purchases account for roughly 85% of the cost to establish a shop and 75% of the cost to operate one, and the franchisor drew 14% of its 2025 revenue from supplier rebates tied to franchisee purchases.
- Renewal requires upgrading the shop to the then-current standards for new shops and signing a franchise agreement whose terms and territory may differ materially.
Summaries are neutral paraphrases of the cited document and are not legal advice. Read the full Items in the current FDD and consult a franchise attorney.
Illustrative unit economics
Model estimateModel estimate — not disclosed by the franchisor, not a forecast. Fee lines below come from this brand's verified FDD fee schedule and are computed exactly as disclosed (each line shows its arithmetic). Operating-cost ratios are category placeholders we chose — every one is editable and labeled assumption. Results are illustrative arithmetic, not expected returns. Every figure here belongs to one of five labeled categories — disclosed inputs, model assumptions, unmodeled mandatory fees, user-editable assumptions, and exclusions — defined in our methodology. This brand's Item 19 also discloses some cost or profit data — see the Item 19 section, which takes precedence over any assumption here.
| Line (annual) | Downside | Base | Upside |
|---|---|---|---|
| Revenue (AUV basis) | $698,868 | $1,113,760 | $1,280,824 |
| − Cost of goods / supplies assumption | $216,649 | $345,266 | $397,055 |
| − Payroll (excl. owner) assumption | $195,683 | $311,853 | $358,631 |
| − Occupancy assumption | $55,909 | $89,101 | $102,466 |
| − Other operating expenses assumption | $76,875 | $122,514 | $140,891 |
| − Royalty Fee disclosed 6% of net sales = $66,826 |
$41,932 | $66,826 | $76,849 |
| − Marketing Fund Contribution disclosed 4% of net sales = $44,550 |
$27,955 | $44,550 | $51,233 |
| − Technology Fee disclosed $395/month × 12 = $4,740 |
$4,740 | $4,740 | $4,740 |
| − Conference Fee disclosed $2,000 per year |
$2,000 | $2,000 | $2,000 |
| − Gift Card Processing Fee disclosed $13/month × 12 = $156 |
$156 | $156 | $156 |
| = Modeled operating result before the items below (EBITDA-style) | $76,968 | $126,755 | $146,803 |
| − Manager compensation assumption | $60,000 | $60,000 | $60,000 |
| = Modeled result after manager compensation | $16,968 | $66,755 | $86,803 |
| − Illustrative debt service assumption | $85,858 | $85,858 | $85,858 |
| = Illustrative pre-tax cash flow — before taxes, capital expenditures and unmodeled fees | −$68,889 | −$19,102 | $945 |
| Modeled operating margin | 11% | 11.4% | 11.5% |
This modeled result is not owner income. It excludes: income taxes; capital expenditures and equipment-replacement reserves; working-capital needs; ramp-up losses; owner-specific costs; one-time and per-event fees (transfer, renewal, audit); and 1 mandatory fee(s) whose amounts the FDD does not state (listed below — real outflows are higher by these amounts). It is illustrative arithmetic on stated assumptions, not a promise or forecast of what a franchisee earns.
Mandatory fees disclosed but not quantified — not included in the modeled result: the FDD requires these but states no amount (e.g. billed at "then-current" rates). They are never modeled as $0. If you have a quote or estimate, enter an annual amount to include it as your own assumption:
- Required Technology and Security System (ongoing maintenance) (Item 7, p. 26) — No recurring dollar amount is disclosed; only the initial purchase is quantified in Item 7. Requires an assumption if modeled.
Every figure in this table is a model estimate built on the disclosed fee schedule plus labeled assumptions. Excluded: income taxes, owner draw, working-capital swings, capital expenditures, ramp-up losses in year one, one-time and per-event fees (transfer, renewal, audit), and the undisclosed-amount fees listed above. Read AUV vs. EBITDA vs. owner income before using this.
Sources and provenance
Primary source: 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness) · issued 2026-03-18 · amended 2026-07-30. Find the FDD at Wisconsin Department of Financial Institutions — Franchise Registration Search. We cite source pages and do not redistribute PDFs.
View all sources, provenance and verification notes
| Document | Obtained from | Dates | Status |
|---|---|---|---|
| 2026 Franchise Disclosure Document — M. H. Franchise Company Inc. (Teriyaki Madness) Registry file 640360 · 298 pages Registered in Wisconsin with an effective date of 3/18/2026; the document itself is labelled "2026_07 FDD" and carries an issuance date of March 18, 2026 as amended July 30, 2026. It is the most recent document available from this registry. | Wisconsin Department of Financial Institutions — Franchise Registration Search | Issued 2026-03-18; amended 2026-07-30 Retrieved 2026-08-29 | Newest available at retrieval |
AI-assisted extraction from the archived FDD text, independently machine-verified against the cited source (two passes plus tie-break); not human-reviewed. Extracted 2026-08-29. Last updated 2026-09-05. AI-assisted extraction independently machine-verified against the cited source document (2026-09-01): two independent AI reading passes plus tie-break re-inspection of every disagreement; 72 of 77 material fields confirmed (60 with the exact page citation re-confirmed), 1 corrected, 0 unresolved, 5 confirmed not disclosed. No human has reviewed this profile. Fiscal year covered: FY2025 (Dec 31, 2025). See how we use AI and verify data.
Fields flagged as uncertain (5)
- item19.metrics — the average and median 2025 income statements (140 shops and six tenure cohorts of 19, 16, 25, 45 and 35 shops) and the individual shop profit and loss statements are embedded as images in the source PDF; the text layer contains only their headings, so no cost, expense or EBITDA figure could be read and none is recorded. item19.includes_cost_or_profit_data is set true because the item does present those statements.
- item19.metrics[].population_count for the quartile metrics — the FDD gives each quartile's high, low, average, median and the number and percentage of shops at or above the quartile average, but never states the number of shops in each quartile, so population_count is null for those rows.
- franchisor.business_since — Item 1 gives the date the franchisor was formed (February 12, 2016), the dates its predecessor entities were formed (2012) and the date the predecessor began franchising (June 2005), but does not state when the first Teriyaki Madness restaurant began operating, so the field is left null.
- units.us_only and item20.us_only — set true because every row of Item 20 Tables 3, 4 and 5 is a U.S. state and no non-U.S. outlet appears, but the FDD does not itself label the tables as U.S.-only.
- operations.owner_involvement — recorded as owner_operator_required because Item 15 says the business must be managed by the franchisee or Managing Owner and permits a Designated Manager only 'under certain circumstances' at the franchisor's discretion, rather than as a right.
Extraction notes (10)
- investment.franchise_fee_low and franchise_fee_high are recorded as the $72,500 sum of the two mandatory fees due at signing of the Franchise Agreement for a first single unit — the $45,000 Initial Franchise Fee to the franchisor and the $27,500 Shop Opening Assistance Fee to its affiliate MH International — per the rule that mandatory components of the initial fee be summed. Both components appear separately in investment.item7_line_items, and the evidence tier is 'derived' because the FDD never states the combined figure.
- All Item 7 Table A line items foot exactly to the disclosed totals of $392,967 and $1,122,005, and all three Item 20 Table No. 3 totals rows reconcile to the ending counts in Table No. 1.
- The cover page says $83,700 to $91,500 of the single-unit investment is payable to the franchisor or its affiliates, but the Table A rows payable to 'Us' or 'Our Affiliate' total $84,885 to $92,685. The difference is the three months of post-opening technology fee ($395 x 3) included in the Item 7 technology line but apparently not in the cover-page figure.
- Two of the Item 20 Table No. 2 state rows carry no transfers in any year (North Carolina, and Nevada in 2025); the 'Total' rows of 16, 8 and 8 were used, not any state row.
- The document is the current Wisconsin registration (effective March 18, 2026) and carries an amendment dated July 30, 2026, so both dates are recorded; documents.fdd-2026.is_current is true.
- fees.cooperative is omitted because Item 11 states no advertising councils or cooperatives have been formed and none are required; the point is recorded in fees.notes.
- Items 10 and 11 were split into their own files in this working set, contrary to the task note; item_10.txt and item_11.txt were read directly.
- Verification 2026-09-01: correct /fees/local_marketing {'value': 2, 'unit': 'pct_net_sales', 'range_high': None} → None
- Verification 2026-09-01: fix_page /units/total 82 → 83
- Verification 2026-09-01: fix_page /units/company_owned 82 → 83
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