Costa Oil
Bottom line
- Total investment $132K – $213K including a $55K franchise fee, 6.5% ongoing royalty.
- Average unit revenue of $291K/year. Estimated payback in 2.5 years.
- Rated MODERATE with a risk score of 59/100. SBA loan default rate of 0.0% across 26 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 Costa Oil unit return on the cash you put in?
Unlevered ROIC · per unit
24%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Costa Oil units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$554K
on $2.8M purchase
Total debt
$2.2M
SBA $1.4M + senior + seller note
Overview
About
Costa Oil franchisees operate fuel/petrol stations or convenience retail operations, likely including fuel sales, automotive products, and ancillary retail. Day-to-day responsibilities typically include inventory management, customer service, payment processing, compliance with fuel regulations, and maintaining equipment.
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 · 23 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
Small, undocumented system with concerning corporate financials, missing performance data, and unfavorable unit economics relative to initial investment.
Score breakdown · what drove the 59 / 100 rating
- 01MEDNo Item 19 (Financial Performance Representations) disclosed — cannot verify if $68,331 average net income is realistic or survivorship-biased
- 02MINOROnly 13 units system-wide with unknown growth trajectory — cannot assess market demand or expansion momentum
- 03HIGHGoing Concern status is FALSE — suggests potential financial instability at corporate level
- 04MEDHigh initial investment ($131,750–$212,900) relative to disclosed net income ($68,331) yields only 32–52% ROI annually, creating extended payback period
- 05MINORMinimum weekly royalty ($150/week = $7,800/year) creates fixed cost burden even during low-revenue periods
- 06MINORFranchise fee ($54,900) represents 41% of minimum total investment — high front-loaded cost with no revenue offset
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
32 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Costa Oil · FDD (2022) PDF