Bottom line
- Total investment $178K – $1.0M including a $45K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.3M/year (median $1.3M).
- Rated STRONG with a risk score of 50/100. SBA loan default rate of 0.0% across 15 loans (below the industry average).
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 Fosters Freeze unit return on the cash you put in?
Unlevered ROIC · per unit
33%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Fosters Freeze units return on equity?
Equity IRR · 5-yr
42.1%
5.79× MOIC
Year-1 DSCR
2.05×
EBITDA ÷ debt service
Equity required
$3.1M
on $11.6M purchase
Total debt
$8.5M
SBA $5.0M + senior + seller note
Overview
About
Foster's Freeze franchisees operate quick-service restaurants serving frozen desserts and light food items. Day-to-day operations include managing point-of-sale systems, staffing and training crew members, maintaining food safety standards, and driving local marketing to maintain the ~$1.28M average annual revenue.
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 · 4 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
Foster's Freeze presents a cautionary profile due to unit contraction, lack of net income transparency, and unclear unit economics across a wide investment range.
Score breakdown · what drove the 50 / 100 rating
- 01MEDSystem shrinking: 61 units with -3.2% YoY decline indicates contraction and potential market saturation concerns
- 02MINORNo Item 19 (Net Income) disclosure: Cannot verify actual profitability; $1.28M average revenue doesn't guarantee positive returns after $178K-$1M investment
- 03MINORWide investment range ($178K-$1M): Suggests vastly different unit economics; unclear what drives 465% variance in initial investment
- 04MINORRoyalty structure complexity: 4-8% royalties on gross (not net) sales creates cash flow burden regardless of profitability
- 05MINORModest average revenue: $1.28M for quick-service/frozen dessert is acceptable but tight margin for covering 4-8% royalties plus labor and COGS
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
67 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Fosters Freeze · FDD (2024) PDF