Coffee and Water Lab Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Coffee and Water Lab is a specialty coffee franchise serving single-origin coffee crafted with harmonized water in a social, third-wave setting. Franchisees run the cafes, managing baristas and counter service.
FranchiseVerdict summary · 2026
A Coffee and Water Lab franchise requires a total initial investment of $441K – $838K, including a $40K franchise fee and an ongoing 4.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.4M[2]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $441K – $838K
- 71st pct Service Resta…
- Avg gross sales
- $1.4M
- Company-owned onlyn=124th pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 1
- 3rd pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $441K – $838K including a $40K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.4M/year (median $1.4M) (company-owned outlets only - not franchisee performance).
- RISKVerdict C (Average), verdict score 40/100 (higher is better).
- FLAGRevenue data based on only 1 reporting unit. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Next Wave Coffee, LLC
- Parent company
- None
- CEO title
- Member
- Luis Pedroza
- Incorporated in
- WY
- HQ
- 30 N Gould St, Ste R, Sheridan, WY 82801
- Auditor
- Muhammad Zubairy, CPA PC
- Audited financials
Overview
About
- CEO
- Luis Pedroza
- Headquarters
- WY
- Founded
- 2024
- FDD year
- 2025
- States available
- 1
Can you afford it, and what does the money buy?
Entry cost is about average for a quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $40K | $40K |
| Working capital (3–6 mo) | $60K | $100K |
| Equipment, build-out, other | $341K | $698K |
| Total initial investment | $441K | $838K |
Source: Coffee and Water Lab 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $441K – $838K
- Bottom third — review vs category
- Liquid capital req'd
- $60K – $100K
- Bottom third — review vs category
- Franchise fee
- $40K – $40K
- Middle of category vs category
- Royalty
- 4.0%
- percentage · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 0.1%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $3K |
| Training fee | $500 |
| Transfer fee | $10K |
| Renewal fee | $0 |
| Inventory (initial) | $15K – $25K |
| Total fee load | 0.1% of rev |
A 0.1% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 16% above the quick-service restaurants norm.
Company-owned outlets only - not franchisee performance
Based on a single reporting unit - not a system average
Source: FDD 2025 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$238K
17.0% margin
Unlevered ROIC
33%
EBITDA / total invested capital
Payback
3.0 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Coffee and Water Lab unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
33%
Within the 30–60% "attractive franchise" band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Coffee and Water Lab units return on equity?
Equity IRR · 5-yr
35.8%
4.62× MOIC
Year-1 DSCR
2.29×
EBITDA ÷ debt service
Equity required
$4.8M
on $14.0M purchase
Total debt
$9.2M
SBA $5.0M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
Company-owned outlets only - not franchisee performance
Based on a single reporting unit - not a system average
- Avg gross sales
- $1.4M
- Per unit, per year
- Median gross sales
- $1.4M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales and gross profit
- Sample size
- 1
- vs category median 20 · small
- Reported figure
- $1.4M
- A single outlet — not a range
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 6 / 10
- vs category median 4 / 10 · above
Compared against 782 Quick-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.4M/year in gross sales. Revenue-to-investment ratio: 2.2x. Company-owned outlets only - not franchisee performance.
Fee burden
Total ongoing fee load of 0.1% — below the Quick-Service Restaurants average of 7.9%.
Disclosure
Transparency score 6/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence. Sample size of 1 unit — treat as directional only.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How Coffee and Water Lab Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1
- Opened
- 0
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 0%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 2
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 1 state reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
1
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Single-unit system with undisclosed financials and going concern issues presents extreme difficulty validating investment viability; franchisor stability is primary concern.
Litigation (Item 3)
No litigation is required to be disclosed in this Item.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Muhammad Zubairy, CPA PC
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 40 / 100 verdict
- 01MINOROnly 1 unit in system with unknown growth trajectory indicates nascent/stalled expansion
- 02HIGHGoing Concern status is FALSE — suggests financial instability or uncertainty about franchisor viability
- 03MEDNet Income not disclosed — unable to validate profitability claims or ROI on $441k-$838k investment
- 04MINORSingle unit makes validation impossible — no comparable franchisee performance data
- 05MINOR4% royalty is low but irrelevant if franchisor cannot support franchise system growth
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 0.1% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Territory type | exclusive |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory population | 40,000 |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Sheridan, Wyoming |
| Jury trial waiver | No |
| Governing law | WY |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation is required to be disclosed in this Item.
Items 10, 11
Training & Operations
- Classroom training
- 42 hrs
- On-the-job training
- 13 hrs
- Training location
- Our Location (San Jose, CA), Franchisee's Location, or Virtual
- Ongoing training
- Optional
- Time to open
- 9 mo
- From signing to launch
- Site selection
- Franchisee selects, franchisor approves
- Franchisor financing
- Not offered
- Item 10
- POS system
- Square POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Square POS
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Coffee and Water Lab franchise?
The total investment to open a Coffee and Water Lab franchise ranges from $441K – $838K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Coffee and Water Lab franchise owners earn?
According to Item 19 of the Coffee and Water Lab FDD, the average gross sales per unit is $1.4M. The median is $1.4M. Important context: Company-owned outlets only - not franchisee performance; Based on a single reporting unit - not a system average. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Coffee and Water Lab FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Coffee and Water Lab FDD and qualifies whose outlets they describe.
What is Coffee and Water Lab's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Coffee and Water Lab (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Coffee and Water Lab franchise locations are there?
As of their most recent FDD filing, Coffee and Water Lab has 1 total units in the United States, including 0 franchised units and 1 company-owned units.
Is Coffee and Water Lab a good franchise to buy?
FranchiseVerdict rates Coffee and Water Lab as a C-grade franchise with a verdict score of 40 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Coffee and Water Lab, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.