Bottom line
- Total investment $120K – $522K including a $60K franchise fee, 5.5% ongoing royalty.
- Average unit revenue of $1.2M/year (median $786K). Estimated payback in 0.9 years.
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 8 loans (below the industry average).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one 2nd Family unit return on the cash you put in?
Unlevered ROIC · per unit
73%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 2nd Family units return on equity?
Equity IRR · 5-yr
31.7%
3.96× MOIC
Year-1 DSCR
2.54×
EBITDA ÷ debt service
Equity required
$7.0M
on $17.1M purchase
Total debt
$10.1M
SBA $5.0M + senior + seller note
Overview
About
2nd Family franchisees operate [service/retail establishment]. Day-to-day operations involve [managing staff/customer interactions/service delivery], maintaining brand standards, and generating revenue through [primary business model]. Franchisees are responsible for local marketing, financial management, and customer relationship building within their protected territory.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 16 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Declining franchise system with unverified financial claims, high investment variability, and shrinking unit count creates elevated risk despite no litigation.
Score breakdown · what drove the 60 / 100 rating
- 01MEDUnit count declined 16.7% YoY (6 units) indicates system contraction and potential franchisee dissatisfaction
- 02HIGHNo Item 19 (Going Concern = False) means franchisor provided no financial performance representations, making revenue/income claims unverifiable
- 03MEDHigh investment range ($119K-$521K) with only 6 operating units suggests limited proven scalability and higher per-unit risk
- 04MINOR5.5% royalty on $1.18M average revenue = ~$65K annual royalty cost, consuming 19% of average net income ($338K)
- 05MINORWide investment spread ($401K variance) indicates inconsistent unit economics or location-dependent performance
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
20 numbers
One-time purchase · CSV download · Validation questions included
FDD download
2nd Family · FDD (2025) PDF