Pepper Lunch vs Mad for Chicken

Candidates shopping “Asian fast casual” get handed both of these, and the two filings describe systems at opposite ends of their lives. Pepper Lunch has been franchising since 1998 from a 1994 founding, and shows six units in the 2024 count from the May 2024 comparative study of published FDDs, all six franchised and none company-operated. Mad for Chicken has been franchising since 2019 from a 2017 founding, and shows 12 units in its 2024 count, 2 franchised and 10 company, from an FDD issued 12 March 2025, against 19 units at year-end 2023 in its previous filing. Twenty-six years of franchising against six, and both systems have very small US franchised bases.

Two small systems, small in different ways

Six franchised outlets and two are both short validation lists, and that fact ought to govern the whole engagement. There is no version of diligence on either brand that does not involve calling nearly every franchisee in the system. The former-franchisee lists will be shorter still, and the openings-and-closures table matters more than the headline count.

Pepper Lunch’s US franchisor operates nothing itself, so everything a buyer can learn about running the format in the United States comes from those six franchisees; the brand’s own site claims over 500 locations across fifteen countries, and none of that international estate is what the US agreement delivers or supports. Mad for Chicken is the mirror image, with ten of twelve outlets in the franchisor’s hands. The operating knowledge sits inside the franchisor, which is the reason to ask how field support is staffed for the franchised pair.

The capital comparison only half exists

Mad for Chicken discloses $321,125–$691,700 for a full restaurant of 2,000–4,000 square feet, with a second express format disclosed at $243,500–$470,700, and its 3 May 2024 filing publishes Item 7 line items: leasehold improvements, construction or remodelling at $75,000–$235,000, furniture, fixtures and equipment at $85,000–$110,000, architectural plans at $10,000–$20,000, a POS system at $3,000–$15,000, and three months of additional funds at $51,375–$162,000.

Pepper Lunch discloses $609,200–$1,471,500 and nothing else of that kind. No square footage, no line items here, no working capital window. Its floor sits above the Mad for Chicken express format’s ceiling entirely, and the two full-restaurant ranges meet only between $609,200 and $691,700. So the projects are not in the same capital band except at one narrow strip, and the more expensive of them is the one whose composition is invisible here.

Hot-plate equipment and the ventilation it requires are exactly the lines that separate a low end from a high end, and whether the franchisor supplies them as a package changes both the number and who carries the risk on it. The request writes itself: the current Item 7 with footnotes, the disclosed footprint, the equipment specification, and the number of months of additional funds the franchisor assumes.

Fees look close and are disclosed with different amounts of daylight

Ranked, Pepper Lunch is 7% and Mad for Chicken is 8%. Pepper Lunch is a 5% royalty plus a 2% brand fund with no required local spend. Mad for Chicken is a 5% royalty, a 1% brand fund plus a 1% media marketing fee, and 1% local advertising — and its filing discloses that the brand fund and the media fee can each rise to 2%, which takes that column to ten points at its disclosed ceiling. Pepper Lunch’s row discloses no escalation language, which is a reason to read the current filing’s Item 6 carefully rather than an assurance that none exists.

Initial fees are $50,000 at Pepper Lunch and $35,000 at Mad for Chicken. Grand opening is $7,500–$15,000 against a flat $15,000. Both initial terms are ten years, but Mad for Chicken discloses two successor terms of ten years each while Pepper Lunch discloses one ten-year option, and Pepper Lunch’s renewal fee is stated as whatever the franchisor requires at renewal — an unpriced obligation a buyer should treat as a term to negotiate rather than a blank to ignore. Transfers cost 50% of the then-current franchise fee at Pepper Lunch and a flat $10,000 at Mad for Chicken, so the cost of selling is fixed on one side and indexed to a future fee on the other.

Territory is soft on both sides. Pepper Lunch’s is set from demographics and population density, with no radius stated. Mad for Chicken’s is expressly non-exclusive, with a minimum five-mile radius in the suburbs or a quarter-mile in a city, sized only after the site is approved. In both cases the buyer signs before knowing precisely what they have, which is normal and is still worth putting in writing.

Training splits sharply. Pepper Lunch requires 16 classroom hours and 192 on the job, a ratio of roughly twelve to one. Mad for Chicken requires 25 and 196, up from 106 in its previous filing. Pepper Lunch’s programme is overwhelmingly floor time on a live line, which tells a buyer something about what has to be learned by doing.

Where both filings stop

Both make a financial performance representation. Mad for Chicken’s is described — unaudited 2023 and 2024 gross revenue for affiliate and franchised outlets, revenue only, no costs, no profit, with four affiliate and two franchised outlets excluded because they closed before completing the year — and that description makes its limits legible. Pepper Lunch’s row carries no described population here, so its Yes is a prompt to open Item 19 in the current document and establish who is in the sample and who was excluded.

Neither column answers whether the buyer should be in teppan or in Korean fried chicken, and neither says what a store will earn. The comparison sets the capital question, the fee question and the size of the calling list. The rest is the current filings.