Bottom line
- Total investment $58K – $74K including a $50K franchise fee, 7.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated STRONG with a risk score of 54/100. SBA loan default rate of 0.0% across 11 loans (below the industry average).
- System growing at 22.6% CAGR over 3 years with 197 total units — strong expansion trajectory.
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 Challenge Island unit return on the cash you put in?
Unlevered ROIC · per unit
143%
Above typical band (30–60%)
Overview
About
Challenge Island franchisees operate experiential learning centers offering STEM/problem-solving activities and camps for children. Day-to-day operations include managing after-school programs, summer camps, birthday parties, and corporate team-building events, with responsibilities spanning staff hiring/training, facility management, marketing, and parent/client relations.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 29 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
Challenge Island presents elevated risk due to litigation history, missing financial disclosure (Item 19), slow unit growth, and unclear franchisor financial stability, making ROI assessment impossible.
Score breakdown · what drove the 54 / 100 rating
- 01MINORNo average revenue or net income disclosure (Item 19) — impossible to assess actual franchisee profitability
- 02HIGHTwo litigation settlements totaling $205,000 (2016 Virginia unregistered franchise sales; 2019 California fraud/misrepresentation) indicate regulatory and legal compliance issues
- 03MINORModest unit growth of 9.8% YoY with only 197 locations suggests slower-than-typical franchise expansion; no growth acceleration visible
- 04MINORHigh franchise fee ($49,900) combined with 7% royalty minimum creates significant fixed cost burden without transparent revenue benchmarks
- 05HIGHGoing Concern flagged as 'False' — unclear if this means concerns exist or notation is missing; requires clarification on franchisor financial health
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
85 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Challenge Island · FDD (2025) PDF