Bottom line
- Total investment $473K – $2.6M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.4M/year (median $1.3M). Estimated payback in 24.1 years.
- Rated MODERATE with a risk score of 57/100. SBA loan default rate of 0.0% across 27 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 Fazoli's unit return on the cash you put in?
Unlevered ROIC · per unit
12%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Fazoli's units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.9M
on $9.5M purchase
Total debt
$7.6M
SBA $4.7M + senior + seller note
Overview
About
Fazoli's franchisees operate fast-casual Italian-American restaurants, serving pasta, sandwiches, and salads through counter-service and delivery channels. Daily operations include food preparation, inventory management, staff scheduling, and customer service with corporate support for marketing, supply chain, and brand standards. Franchisees must maintain P&L discipline given the 4.8% average net margin and compete against regional and national chains in their unprotected 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 · 28 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
Fazoli's presents a CAUTION-to-HIGH RISK profile: declining unit count, pending litigation against franchisor, razor-thin franchisee margins, and unprotected territories create substantial downside risk despite reasonable average unit volumes.
Score breakdown · what drove the 57 / 100 rating
- 01MINORSystem declining at -7.3% YoY with only 195 units; indicates shrinking franchise base and weakening brand momentum
- 02MINORPending putative investor class action against parent and officers creates uncertainty about franchisor financial stability and management credibility
- 03MINORUnprotected territory exposes franchisees to cannibalization; franchisor can place competing units in your service area
- 04MINORExtremely thin net margins: $64,718 avg net income on $1.36M revenue (4.8% net margin) leaves minimal profit after 5% royalty and operating expenses
- 05HIGHHigh initial investment ($472.5K-$2.64M) with minimal investment protection given system contraction and litigation exposure
- 06HIGHGoing concern status indicates potential financial distress at parent company level
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
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Fazoli's · FDD (2025) PDF