Dunn Brothers Coffee®
Bottom line
- Total investment $456K – $799K including a $40K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $600K/year (median $570K).
- Rated MODERATE with a risk score of 64/100. SBA loan default rate of 0.0% across 35 loans (below the industry average).
- System contracting at -17.0% 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 DUNN BROTHERS COFFEE® unit return on the cash you put in?
Unlevered ROIC · per unit
9%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 DUNN BROTHERS COFFEE® units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$360K
on $1.8M purchase
Total debt
$1.4M
SBA $0.9M + senior + seller note
Overview
About
Franchisees operate coffee shop retail locations serving specialty beverages, pastries, and light food items. Day-to-day operations include staffing management, inventory ordering, customer service, equipment maintenance, and local marketing within a protected territory.
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 · 7 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
DUNN BROTHERS COFFEE presents HIGH RISK due to a contracting unit base, undisclosed profitability metrics, franchisor going concern status, and thin revenue-to-investment ratios that suggest systemic viability challenges.
Score breakdown · what drove the 64 / 100 rating
- 01MEDUnit decline of 10.2% year-over-year indicates shrinking franchise system despite mature brand
- 02MEDNet income not disclosed in Item 19 — inability to assess actual profitability or franchisee ROI
- 03HIGHGoing Concern status is FALSE — potential financial instability or viability concerns at franchisor level
- 04MINORAverage revenue of $600k against $455k-$799k investment suggests thin margins with high failure risk
- 05MINORRoyalty escalation clause (5% to 6% for non-compliance) is punitive and indicates potential franchisor cash flow problems
- 06MED48 total units is extremely small system with limited support infrastructure and purchasing power
- 07MED10-year term locks franchisees into declining brand with limited 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
49 numbers
One-time purchase · CSV download · Validation questions included
FDD download
DUNN BROTHERS COFFEE® · FDD (2025) PDF