Bottom line
- Total investment $392K – $680K including a $60K franchise fee, 7.5% ongoing royalty.
- Average unit revenue of $850K/year (median $760K).
- Rated STRONG with a risk score of 47/100. SBA loan default rate of 0.0% across 248 loans (below the industry average).
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
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 Ellie Mental Health unit return on the cash you put in?
Unlevered ROIC · per unit
22%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Ellie Mental Health units return on equity?
Equity IRR · 5-yr
46.1%
6.66× MOIC
Year-1 DSCR
1.95×
EBITDA ÷ debt service
Equity required
$2.4M
on $10.6M purchase
Total debt
$8.2M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate teletherapy/mental health clinics, managing licensed clinician networks and patient care delivery. Day-to-day operations include scheduling, patient intake, billing/insurance claims, EHR management, and clinical oversight. The franchisor provides business systems, credentialing support, billing infrastructure, and marketing templates.
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 · 37 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
Growing but litigation-plagued mental health franchise with undisclosed profitability, misrepresentation claims around core business infrastructure, and franchisor-initiated legal action indicating deteriorating franchisee relationships.
Score breakdown · what drove the 47 / 100 rating
- 01HIGHActive litigation from franchisees alleging misrepresentation of critical backend services (EHR, billing, credentialing) — core to operations
- 02MINORNet income deliberately withheld from FDD Item 19 despite $850K average revenue disclosure — opacity suggests inconsistent profitability
- 03MINORFranchisor pursuing aggressive non-compete enforcement suggests franchisee dissatisfaction and potential exit disputes
- 04MINORHigh unit growth rate (31.1% YoY) may mask underlying churn; 255 units is still small system vulnerable to reputation damage
- 05MINORInitial investment spread ($392K-$680K) with 7.5% royalty on collected (not gross) revenue creates cash flow pressure for slow-paying practices
- 06MINORHealthcare compliance exposure: mental health licensing, telehealth regulations, HIPAA liability not clearly addressed
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
88 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Ellie Mental Health · FDD (2025) PDF