Bottom line
- Total investment $71K – $252K including a $25K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $716K/year (median $634K).
- Rated STRONG with a risk score of 46/100. SBA loan default rate of 0.0% across 22 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 Arthur Murray Dance Studio unit return on the cash you put in?
Unlevered ROIC · per unit
67%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Arthur Murray Dance Studio units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.3M
on $6.4M purchase
Total debt
$5.2M
SBA $3.2M + senior + seller note
Overview
About
Arthur Murray Dance Studio franchisees operate ballroom and Latin dance instruction studios, offering group classes, private lessons, and social dance events to adult students. Day-to-day operations include instructor scheduling, student billing/collections, marketing, and managing studio facilities. Revenue is primarily generated through lesson packages, monthly memberships, and special events like showcases and competitions.
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 · 10 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
Aging brand with regulatory baggage, opaque profitability metrics, stagnant unit growth, and recent franchisee disputes creates elevated risk despite protected territory.
Score breakdown · what drove the 46 / 100 rating
- 01MINOR1980 FTC Consent Decree still active — indicates ongoing regulatory scrutiny for unfair/deceptive practices in sales and contracts
- 02MEDNo Item 19 (Average Net Income) disclosed — cannot verify profitability claims; $715K avg revenue without net income transparency is concerning
- 03MEDDeclining unit count (237 units, only 3.0% YoY growth) — suggests market saturation, franchisee struggles, or brand decline
- 04MINORRecent 2024 arbitration filing against Honolulu franchisee for unpaid royalties — signals enforcement issues and potential franchisee financial distress
- 05MINORHigh royalty burden (5-10% of weekly gross) on dance studio margins — may compress profitability significantly
- 06MED5-year term with no disclosed renewal rates or franchise failure data — unclear exit strategy for underperforming locations
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
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Arthur Murray Dance Studio · FDD (2025) PDF