Bottom line
- Total investment $497K – $943K including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.9M/year.
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 4 loans (below the industry average).
- No protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
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 AMERICAN FREIGHT unit return on the cash you put in?
Unlevered ROIC · per unit
16%
Below typical band (30–60%)
Overview
About
American Freight franchisees operate furniture and appliance retail stores offering financing options to customers. Daily operations include inventory management, sales floor operations, customer financing coordination, and local marketing. The business model relies heavily on customer credit financing and competitive pricing in an economically-sensitive retail sector.
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 · 22 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
American Freight represents HIGH RISK due to negative franchisee profitability, unsustainable 400% growth masking unit economics problems, going concern status, corporate litigation history, and unprotected territories—creating a business model where most franchisees lose money despite significant capital investment.
Score breakdown · what drove the 52 / 100 rating
- 01MINORNegative average net income (-$157,938) indicates franchisees are losing money on average despite $1.9M revenue
- 02MINORExplosive 400% YoY unit growth is unsustainable and suggests aggressive recruitment masking underlying unit economics problems
- 03HIGHNo going concern status raises questions about corporate financial stability and ability to support franchisees
- 04MINORUnprotected territory creates direct competition between franchisees and corporate expansion
- 05HIGHAffiliate litigation (Buddy's) involving breach of contract and FTC antitrust settlement indicates corporate governance and competitive practice concerns
- 06MINORHigh initial investment ($496k-$943k) paired with negative profitability creates severe capital recovery risk
- 07MINOR5% royalty on gross sales is relatively high given franchisees operate at a loss
- 08MINORNo Item 19 financial performance representations limits transparency on actual franchisee outcomes
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
32 numbers
One-time purchase · CSV download · Validation questions included
FDD download
AMERICAN FREIGHT · FDD (2023) PDF