Bottom line
- Total investment $44K – $55K including a $36K franchise fee.
- Average unit revenue of $175K/year.
- Rated STRONG with a risk score of 49/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- System contracting at -14.3% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 Drama Kids unit return on the cash you put in?
Unlevered ROIC · per unit
53%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Drama Kids units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$315K
on $1.6M purchase
Total debt
$1.3M
SBA $0.8M + senior + seller note
Overview
About
Drama Kids franchisees operate after-school drama classes and performance programs for children, typically renting studio space and managing small instructor teams. Day-to-day operations involve scheduling classes, managing student enrollment, delivering theatrical instruction, organizing recitals/productions, and handling marketing to local schools and parents.
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 · 20 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
Undisclosed profitability, anemic unit growth, and opaque financial performance create meaningful investment risk despite lack of litigation.
Score breakdown · what drove the 49 / 100 rating
- 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot verify if $174,740 avg revenue translates to positive net income
- 02MINORMinimal unit growth (2.4% YoY) suggests market saturation or franchisee struggles in a children's entertainment sector with high competition
- 03MEDHigh initial investment ($43,500–$54,500) relative to disclosed revenue without profitability data creates ROI uncertainty
- 04MINORRoyalty structure heavily favors franchisor (8% of gross sales) with escalating minimums ($500/month by year 3 = $6,000 annually), compressing margins on thin revenue
- 05MINOR7-year term is longer than industry standard for entertainment franchises, reducing exit flexibility
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
42 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Drama Kids · FDD (2026) PDF