Bottom line
- Total investment $183K – $488K including a $35K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $671K/year (median $614K).
- Rated STRONG with a risk score of 50/100. SBA loan default rate of 0.0% across 5 loans (below the industry average).
- System growing at 16.7% CAGR over 3 years with 31 total units — strong expansion trajectory.
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 Fat Shack unit return on the cash you put in?
Unlevered ROIC · per unit
27%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Fat Shack units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.0M
on $5.0M purchase
Total debt
$4.0M
SBA $2.5M + senior + seller note
Overview
About
Fat Shack franchisees operate quick-service restaurant locations specializing in casual fried/indulgent food offerings (likely sandwiches, sides, beverages). Day-to-day operations include food prep, counter service, inventory management, staffing, and local marketing to drive foot traffic and delivery orders.
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 · 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.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Fat Shack presents moderate-to-cautionary risk: healthy growth trajectory and protected territory offset by undisclosed profitability data, small system size, and wide investment variance requiring deeper validation.
Score breakdown · what drove the 50 / 100 rating
- 01MEDNet income not disclosed in FDD Item 19 — impossible to validate profitability claims against $670k average revenue
- 02MINORSmall unit count (31 locations) limits system maturity and reduces franchisee support infrastructure
- 03MINORHigh investment range ($183k-$487k) creates ambiguity; unclear what drives 2.7x cost variance
- 04HIGHGoing Concern flag is FALSE but requires clarification — does franchisor have adequate capitalization and reserves?
- 05MINORModest unit growth (16.7% YoY) is healthy but from tiny base; vulnerable to single-unit closures skewing percentages
- 06HIGHNo litigation disclosed is positive, but small systems often lack visibility into franchisee disputes
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
33 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Fat Shack · FDD (2026) PDF