Bottom line
- Total investment $330K – $506K including a $49K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $1.2M/year (median $727K).
- Rated STRONG with a risk score of 54/100. SBA loan default rate of 0.0% across 38 loans (below the industry average).
- System contracting at -14.3% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 Breadsmith unit return on the cash you put in?
Unlevered ROIC · per unit
25%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Breadsmith units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$485K
on $2.4M purchase
Total debt
$1.9M
SBA $1.2M + senior + seller note
Overview
About
Franchisees operate neighborhood bakery cafes featuring artisanal breads, pastries, and light food service. Day-to-day operations include baking, food preparation, customer service, inventory management, and retail sales in a small-format location (typically 1,200-1,800 sq ft).
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 · 8 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 shrinking unit count, undisclosed profitability metrics, and high capital requirements create material risk despite protected territories.
Score breakdown · what drove the 54 / 100 rating
- 01MEDUnit count declined 10% YoY (32 units down from ~36) indicating system contraction and potential viability concerns
- 02MEDNet income not disclosed in Item 19 — impossible to assess actual profitability despite $1.2M average revenue
- 03MINORHigh initial investment ($330K-$506K) with no transparency on break-even timeline or ROI benchmarks
- 04MINOR7% royalty on gross receipts (not net profit) means franchisees pay during unprofitable periods
- 05MINORBakery category historically challenged by commodity pricing, labor costs, and artisanal market saturation
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
11 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Breadsmith · FDD (2025) PDF