Bottom line
- Total investment $311K – $708K including a $60K franchise fee, 4.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated AVOID with a risk score of 85/100.
- No Item 19 financial performance representation. Without franchisor-disclosed revenue data, you'll need to gather unit economics directly from existing franchisees.
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 Duan Chun Zhen unit return on the cash you put in?
Unlevered ROIC · per unit
24%
Below typical band (30–60%)
Overview
About
Duan Chun Zhen appears to operate a food service or beverage concept (likely Chinese cuisine based on the brand name), with franchisees managing day-to-day operations including food preparation, customer service, inventory management, and local marketing. Specific operational details and service model are not publicly available.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 9 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.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Avoid this franchise: going concern doubts, active litigation for misrepresentation and regulatory violations, only 3 units with no profitability disclosure, and no territorial protection create extreme risk of total investment loss.
Score breakdown · what drove the 85 / 100 rating
- 01HIGHGoing Concern status is FALSE — indicates the franchisor may not be financially viable as an ongoing business
- 02HIGHLitigation history includes misrepresentation of authority to sell franchises and multi-state registration violations (NY, CA, WA), suggesting regulatory non-compliance and potential fraud
- 03MINOROnly 3 existing units with unknown growth trajectory — minimal proof of concept and severe lack of franchisee success data
- 04MEDAverage Revenue and Net Income not disclosed — complete opacity on franchisee profitability makes ROI assessment impossible
- 05MINORNo protected territory — franchisees face direct competition from other franchisees in the same area
- 06MINOREscalating royalty structure (4% to 5%) combined with high investment range ($311k–$708k) creates cash flow pressure without proven unit economics
- 07MINORMaster Franchisor involved in breach of contract disputes — raises questions about franchisor reliability and contract enforcement
- 08MINORHigh franchise fee ($60k) relative to tiny system size (3 units) suggests fee-driven growth model rather than sustainable franchising
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
9 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Duan Chun Zhen · FDD (2025) PDF