About Pepper Palace Franchise
Pepper Palace is a specialty retail franchise featuring hand-crafted, award-winning hot sauces, barbeque sauces, wing sauces, salsas, seasonings, and rubs.
Franchisees operate a retail outlet selling these products directly to the general public.
The target customers are consumers interested in specialty sauces, spices, and condiments, and sales occur year-round.
Pepper Palace Franchise Cost & Fees
Minimum Investment
$211K
Average Investment
$250K
Maximum Investment
$288K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $50,000 | One-time payment upon signing |
| Royalty Fee | 6% of Gross Revenue of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 2% of Gross Revenues (local advertising) | National brand fund |
| Total Investment Range | $211,000 – $288,000 | Includes build-out, inventory, working capital |
The investment range of $211K–$288K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (6% of Gross Revenue) and marketing fee (2% of Gross Revenues (local advertising)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $50,000 | $50,000 |
| Traveling and Living Expenses while Training | $5,000 | $7,500 |
| Real Estate Rent Deposits and Prepaid Expenses (3 months) | $25,000 | $35,000 |
| Leasehold Improvements | $30,000 | $40,000 |
| Furniture, Fixtures, and Décor | $25,000 | $35,000 |
| Equipment | $4,000 | $6,000 |
| Computer and POS System | $5,000 | $7,500 |
| Initial Inventory and Supplies | $20,000 | $32,500 |
| Office supplies, TV, Cameras, and other equipment | $3,000 | $6,000 |
| Signage | $10,000 | $15,000 |
| Grand Opening Advertising | $2,000 | $5,000 |
| Licenses, Permits, and Certifications | $2,000 | $3,500 |
| Insurance (3 Months) | $2,500 | $5,000 |
| Professional Fees | $2,500 | $5,000 |
| Additional Funds (3 months) | $25,000 | $35,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $10,000 |
| Renewal Fee | $5,000 |
| Technology Fee | $300-$400 per month plus transaction costs (POS and Software Fees) |
| Audit Fee | Franchisee must pay any under-reported fees plus interest at 1.5% per month and cost of audit if underpayment of 2% or more |
| Grand Opening Advertising | $2,000 - $5,000 |
| Interest on Overdue Amounts | Lesser of 1.5% per month or highest commercial contract interest rate allowed by law |
| National Franchise Convention Fee | $500 |
| Maintenance and Refurbishing of Business | Franchisor's actual expenses |
| Insufficient Funds Fee | $75 |
| Relocation Assistance | Franchisor's actual cost |
| Retraining Fee | $500 per trainee per day |
| Additional Training or Assistance | $500 per day per person plus expenses |
| Testing of Products or Approval of New Suppliers | Not to exceed $1,000 |
| Customer Service Fee | Actual cost of reimbursement |
| E-mail Maintenance Fee | Up to $50/month per e-mail address |
| Management Fee | $500 per person per day plus other costs and expenses |
| De-Identification Reimbursement Fee | Actual costs incurred |
| Indemnification | Will vary |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | 30 total hours (7.5 hours classroom, 22.5 hours on-the-job) |
| Classroom Training | 7.5 hours |
| On-the-Job Training | 22.5 hours |
| Training Location | Affiliate location in Sevierville, Tennessee |
| Additional Training | Ongoing training programs, seminars, or webinars may be required, up to 2 sessions per calendar year, at $500 per person per day. Additional training for replacement managers at $500 per trainee per day. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Exclusive |
| Exclusive Territory | Yes |
| Territory Size | Normally a 3-mile radius around the outlet |
| Description | Exclusive territory defined by radius, zip codes, natural, or political boundaries. The franchisor will not establish company-owned or franchised outlets within the territory. However, the franchisor reserves the right to use other channels of distribution (Internet, catalog sales, telemarketing, direct marketing) within the territory. Territorial rights do not depend on sales volume or market penetration. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 10 years |
| Renewal Term | 10 years (successive terms) |
| Renewal Fee | $5,000 |
| Renewal Conditions | Must have fully complied with all provisions of the Franchise Agreement; made necessary capital expenditures for System uniformity; satisfied all monetary obligations; not be in default; given written notice of intent to renew 9-12 months before term end; sign then-current Franchise Agreement (which may have materially different terms); comply with current qualifications and training requirements; execute a general release; pay renewal fee. |
| Transfer Fee | $10,000 |
| Transfer Conditions | Must satisfy right of first refusal; all obligations paid; franchisee and transferee sign general release; transferee meets business and financial standards; transferee signs then-current Franchise Agreement; copy of all transfer-related contracts provided; transfer fee paid; transferee personally bound by all provisions; all third-party consents obtained; franchisee signs non-competition agreement; transferee completes initial training. |
| Termination for Cause | Immediate termination without cure for: failure to establish/open business; failure to complete training; loss of required licenses for 5+ business days; material misrepresentation; felony conviction; unauthorized use of confidential information; abandonment for 5+ consecutive days; unauthorized transfer; insolvency; misuse of Marks; repeated failures. 30-day cure period for other defaults; 10-day cure for insurance failures; 5-day cure for payment failures. |
| Non-Compete Period | 2 years |
| Non-Compete Details | For 2 years after termination or expiration, franchisee may not offer competitive business services within 25 miles of any Pepper Palace outlet or any franchisor-owned business, or solicit customers or business associates to compete with the franchisor. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | No |
| Participation Details | Either the franchisee or an approved Designated Manager must devote not less than 40 hours per week to the day-to-day operations. The Designated Manager is not required to own an equity interest in the franchisee entity. The Designated Manager must be approved by the franchisor and must complete the initial training program. |
| Required Suppliers | Franchisees must purchase all merchandise for retail sale (hot sauce, barbecue sauce, salsa, dry spice, drink mixes, snacks, wing sauces, sauces, and marinades) exclusively from the franchisor. Furniture, fixtures, equipment, computer hardware/software, signage, and uniforms must be purchased from designated or approved suppliers meeting franchisor specifications. |
| Supply Restrictions | Approximately 70% of establishment expenditures and 30% of ongoing expenditures must be from the franchisor, affiliates, approved suppliers, or suppliers meeting franchisor standards and specifications. |
| Franchisor Revenue from Suppliers | The franchisor may derive revenue from required purchases. Designated suppliers may make payments to the franchisor. In fiscal year ended December 31, 2024, no supplier rebates were received but may be in the future. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | The franchisor does not offer direct or indirect financing and does not guarantee any note, lease, or obligation. |
Pepper Palace Franchise Earnings — Item 19
Average Revenue
$349K
Median Revenue
$323K
Revenue Range
$157K – $915K
Sample Size
81 units
Past financial performance does not guarantee future results. Individual results will vary.
Pepper Palace Litigation & Risk Flags
Clean Litigation RecordPepper Palace has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Pepper Palace System Growth
Total Units
81
Franchised
0
Company-Owned
81
Pepper Palace currently operates 0 franchised locations and 81 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2022 | 6 | 0 | 145 |
| 2023 | 0 | 31 | 114 |
| 2024 | 0 | 33 | 81 |
Transfers: 0 | Closures: 33
State Registrations
Registered in 7 states: CA, MI, NY, RI, VA, WA, WI
Franchisor Financials (Item 21)
Total Assets
$100K
Audited by Smith, Buzzi & Associates, LLC for year ending December 31.
Pepper Palace Franchise — FAQ
The total investment to open a Pepper Palace franchise ranges from $211,000 to $288,000, per their Franchise Disclosure Document. This includes the initial franchise fee of $50,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Pepper Palace charges a royalty fee of 6% of Gross Revenue of gross sales, plus a 2% of Gross Revenues (local advertising) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Pepper Palace Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Pepper Palace to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Pepper Palace franchise owners report average revenue of $349K and median revenue of $323K. This is based on a sample of 81 units. Past performance does not guarantee future results.
Pepper Palace has been franchising since 2025. The FDD shows an investment range of $211,000-$288,000, a 6% of Gross Revenue royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $50,000 and the total investment ranges from $211,000 to $288,000 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Pepper Palace and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Pepper Palace or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com