Bottom line
- Total investment $517K – $2.7M including a $50K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $1.1M).
- Rated STRONG with a risk score of 54/100. SBA loan default rate of 0.0% across 52 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 Fatburger unit return on the cash you put in?
Unlevered ROIC · per unit
10%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Fatburger units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.6M
on $8.0M purchase
Total debt
$6.4M
SBA $4.0M + senior + seller note
Overview
About
Fatburger franchisees operate fast-casual burger restaurants serving made-to-order hamburgers, hot dogs, and sides. Daily operations include food preparation, kitchen management, customer service, and point-of-sale management. Franchisees manage staffing, inventory, local marketing, and must maintain brand standards across a 15-year agreement.
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 · 13 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
Declining unit count, withheld profitability data, active litigation, and going concern status present elevated risk for a burger franchise requiring half-million dollar investment.
Score breakdown · what drove the 54 / 100 rating
- 01MINORUnit count declining 4.8% YoY indicates shrinking franchise system and potential market saturation or brand weakness
- 02MEDNet income not disclosed in FDD Item 19 — impossible to assess actual profitability despite $1.14M average revenue
- 03HIGHMultiple litigation cases including pending securities class action, franchise registration disputes, and breach of contract claims suggest systemic franchisor-franchisee relationship issues
- 04MEDHigh investment range ($517K–$2.66M) paired with undisclosed profitability creates significant downside risk with unclear return potential
- 05HIGHGoing concern disclosure raises questions about franchisor financial stability and long-term support capabilities
- 06MINOR6% royalty on top of operating costs in declining QSR category may create unsustainable unit economics
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
89 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Fatburger · FDD (2026) PDF