Bottom line
- Total investment $174K – $321K including a $0 franchise fee.
- Average unit revenue of $625K/year (median $580K).
- Rated STRONG with a risk score of 47/100. SBA loan default rate of 0.0% across 26 loans (below the industry average).
- 38 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 Cornwell Quality Tools unit return on the cash you put in?
Unlevered ROIC · per unit
39%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Cornwell Quality Tools units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.3M
on $6.3M purchase
Total debt
$5.0M
SBA $3.1M + senior + seller note
Overview
About
Cornwell Quality Tools franchisees operate as tool dealers, selling professional-grade tools and equipment to mechanics, contractors, and industrial customers. Day-to-day operations involve managing inventory, servicing customer accounts (often at jobsites), handling tool rentals/purchases, and managing cash flow through sales commissions. The business model appears heavily dependent on franchisor-supplied inventory financed by franchisees.
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 · 12 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
High-risk franchise with a shrinking network, significant litigation exposure, undisclosed profitability, and evidence of franchisee financial distress through aggressive collection actions.
Score breakdown · what drove the 47 / 100 rating
- 01MINORShrinking franchise system with only 2.3% YoY growth and 811 units suggests mature/declining network
- 02MINOR23 collection suits by franchisor against former franchisees indicates systemic cash flow problems and potential predatory inventory practices
- 03MINORMultiple class action lawsuits regarding dealer misclassification under labor laws create legal exposure and suggest franchisor control disputes
- 04MEDNo disclosed average net income despite $625K average revenue makes ROI impossible to validate
- 05MINORZero franchise fee raises questions about franchisor's revenue model and financial sustainability
- 06MINORUnprotected territory with no mention of exclusivity creates direct competition risk from other franchisees
- 07MINORRegulatory actions in Maryland and Minnesota regarding franchise registration renewals suggest compliance violations
- 08HIGHData breach litigation indicates inadequate cybersecurity and potential customer/franchisee exposure
- 09MINORUnknown franchise term creates uncertainty around long-term investment protection
- 10MINORDeclining or stagnant unit growth combined with collection actions suggests franchisees are struggling
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
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Cornwell Quality Tools · FDD (2026) PDF