Bottom line
- Total investment $104K – $222K including a $50K franchise fee, 50.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated CAUTION with a risk score of 72/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- 10 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
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 Charles Schwab unit return on the cash you put in?
Unlevered ROIC · per unit
-137%
Negative
Overview
About
Charles Schwab franchisees operate licensed financial services offices providing investment advice, brokerage services, and asset management to retail and institutional clients. Day-to-day activities include client acquisition, portfolio management, compliance with securities regulations, and generating assets-under-management (AUM) to support the 50% asset-based royalty structure.
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 · 19 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
Charles Schwab franchising presents HIGH RISK due to extreme 50% royalties, shrinking unit base, regulatory entanglements, absent financial disclosures, unprotected territories, and documented franchisee disputes.
Score breakdown · what drove the 72 / 100 rating
- 01MINORRoyalty structure of 50% of Asset-Based Revenue is extremely high and creates severe profit margin compression for franchisees
- 02MINORFranchise system contracted 3.3% YoY despite parent company stability, indicating franchisee dissatisfaction or unsustainable unit economics
- 03HIGHMultiple regulatory settlements (SEC, FINRA, state securities boards) and class action litigation signal compliance and operational risks that franchisees inherit
- 04MINORNo financial disclosure (Avg Revenue, Avg Net Income, Item 19) prevents transparency and makes ROI projections impossible to validate
- 05MINORUnprotected territory means franchisees compete directly with other Schwab franchisees and the parent company's direct operations
- 06MINORDocumented arbitrations with former franchisees regarding termination/non-renewal suggest contentious franchisor-franchisee relationships
- 07MINOR7-year term with no territory protection creates exit risk and customer acquisition competition
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
22 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Charles Schwab · FDD (2026) PDF