Groutsmith Franchise
Cost, fees, owner earnings, closure rate and litigation for a Groutsmith franchise — pulled from the franchisor's own public FDD (2025), not its sales material.
Disclosure honesty
Groutsmith discloses little or no owner-earnings data (Item 19) — the franchisor won't put real profit in writing.
What their own earnings claim actually says
No financial performance representations made. Franchisor explicitly states no representations about franchisee future performance or outlet historical performance.
What a Groutsmith franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $34,900 | Item 5 — paid up front, before you open |
| Royalty | 0.96% of gross sales | Item 6 — charged on revenue, not profit |
| Total recurring fees | 0.96% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $42,500 – $49,400 | Item 7 — franchisor's own low/high estimate |
Royalty: $0 for 6 months, then $600-$1,250/month capped. Transfer fee $5,000 plus expenses.
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
Groutsmith system size and owner turnover
| Total outlets | 49 |
| Ceased operations | 0 |
| Terminated by franchisor | 6 |
| Transferred to new owners | 3 |
| Closure rate | 0.0% of outlets |
6 terminations in 2024; 2-3 annual transfers suggest instability despite no disclosed failures.
From Item 20 of the FDD 2025. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is Groutsmith worth it? — how it compares to 436 similar franchises
| Ongoing fees | 0.96% of sales | lower than most (median 8%) |
| Startup cost | from $42,500 | cheaper than most (median $138,750) |
| Disclosure honesty | Grade F | less honest than most of the category |
| Closure rate | 0.0% of outlets | better than most (median 1.5%) |
| Disclosed lawsuits | 0 | fewer than most |
Benchmarked against every other franchises franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a Groutsmith
The franchisor's framing: No financial performance representations made. Franchisor explicitly states no representat… We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
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Groutsmith franchise — frequently asked
- How much does a Groutsmith franchise cost?
- The FDD lists a total initial investment of about $42,500–$49,400, including a $34,900 initial franchise fee.
- How much do Groutsmith franchise owners make?
- Groutsmith discloses little or no earnings data (Item 19) — meaning the franchisor won't put real owner profit in writing. That's a red flag worth questioning.
- What are the Groutsmith franchise fees?
- Groutsmith's FDD discloses a $34,900 initial franchise fee, a 0.96% royalty on gross sales, for roughly 0.96% of gross sales in recurring fees before rent, labor, or debt service. Royalty: $0 for 6 months, then $600-$1,250/month capped. Transfer fee $5,000 plus expenses.
- What is the Groutsmith franchise profit margin?
- Groutsmith discloses no Item 19 earnings representation, so no profit margin can be derived from the FDD at all. Any margin figure quoted elsewhere is an estimate, not a disclosure.
- What is the Groutsmith franchise failure rate?
- 6 terminations in 2024; 2-3 annual transfers suggest instability despite no disclosed failures.
- How many Groutsmith locations are there?
- Groutsmith's FDD reports 49 total outlets, with 0 that ceased operations in the most recent reporting year and 3 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does Groutsmith have complaints or lawsuits?
- Groutsmith discloses no material litigation in Item 3 of the filing we reviewed. That's a positive signal, though it covers only what the franchisor is required to report.
- Is a Groutsmith franchise worth it?
- It depends on the numbers, not the pitch. Groutsmith scores F on disclosure honesty, carries about 0.96% of sales in ongoing fees. Get the real owner take-home before you sign.
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Source: MN CARDS 34584-202508-10 (Clean FDD 2025). FranchiseValidate is independent and not affiliated with Groutsmith or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.