Bottom line
- Total investment $243K – $610K including a $35K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.3M/year.
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 4 loans (below the industry average).
- Emerging franchise — only 2 years of franchising with 3 units. Early-stage systems carry higher risk but may offer better territory availability.
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 Arwa Coffee unit return on the cash you put in?
Unlevered ROIC · per unit
38%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Arwa Coffee units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.6M
on $7.9M purchase
Total debt
$6.3M
SBA $3.9M + senior + seller note
Overview
About
Arwa Coffee franchisees operate specialty coffee retail locations, likely serving espresso-based beverages, specialty drinks, and coffee products. Daily operations include customer service, barista work, inventory management, and point-of-sale transactions in a café environment.
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 · 9 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
Arwa Coffee presents elevated risk due to going concern status, non-disclosure of net income, minimal 3-unit system size, and unclear unit economics—requiring extensive validation before investment.
Score breakdown · what drove the 60 / 100 rating
- 01HIGHGoing Concern status is False — indicates financial distress or operational uncertainty at franchisor level
- 02MEDNet Income not disclosed in Item 19 — impossible to validate actual profitability claims; only gross revenue ($1.31M avg) provided
- 03MEDOnly 3 units system-wide — extremely small franchise system with no disclosed growth trajectory; high risk of franchisor failure
- 04MINORWide investment range ($242.8K–$609.6K) suggests inconsistent unit economics or undefined build-out requirements
- 05HIGHNo litigation disclosed but going concern issues suggest potential hidden legal/financial problems
- 06MED4% royalty on undisclosed net margins creates unpredictable cost structure for franchisees
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
14 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Arwa Coffee · FDD (2025) PDF