Children’s Orchard
Bottom line
- Total investment $227K – $336K including a $25K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $419K/year (median $367K).
- Rated CAUTION with a risk score of 72/100. SBA loan default rate of 0.0% across 2 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 Children’s Orchard unit return on the cash you put in?
Unlevered ROIC · per unit
22%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Children’s Orchard units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$754K
on $3.8M purchase
Total debt
$3.0M
SBA $1.9M + senior + seller note
Overview
About
Children's Orchard franchisees operate retail stores specializing in consignment and resale of children's clothing, furniture, and accessories. Day-to-day operations include managing inventory intake from consignors, pricing merchandise, staffing the retail location, and handling customer transactions. Franchisees are responsible for marketing, local community building, and managing the consignor payment process.
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 · 13 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
Children's Orchard presents HIGH RISK due to a contracting unit base, substantial litigation history involving breach of contract and financial misrepresentation, zero net income transparency, and an unsustainably small franchise system.
Score breakdown · what drove the 72 / 100 rating
- 01MINORDeclining unit count: 13 units with -13.3% YoY contraction indicates system is shrinking, not growing
- 02HIGHTwo litigation settlements totaling $1.05M within recent history suggest systemic issues with contract enforcement and financial transparency
- 03MINORNo average net income disclosure despite $418,805 average revenue—inability or unwillingness to provide profitability data is a major transparency red flag
- 04MINORHigh initial investment ($226,700-$335,500) with only 4% royalty structure may indicate franchisor relies on upfront fees rather than franchisee success
- 05MED13-unit system is extremely small and vulnerable; franchisees have minimal peer support network and franchisor has limited resources
- 06MINOR10-year term locks franchisees into relationship with shrinking brand with no demonstrated path to profitability
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
21 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Children’s Orchard · FDD (2026) PDF