Bottom line
- Total investment $60K – $98K including a $25K franchise fee.
- Average unit revenue of $292K/year (median $212K).
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 1 loans (below the industry average).
- System contracting at -15.9% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 FranNet unit return on the cash you put in?
Unlevered ROIC · per unit
34%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 FranNet units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$408K
on $2.0M purchase
Total debt
$1.6M
SBA $1.0M + senior + seller note
Overview
About
FranNet franchisees operate as independent consulting brokers, primarily matchmaking between business buyers and sellers, and connecting business owners with financing, accounting, and legal service providers. Revenue is earned through consulting fees and referral commissions. Day-to-day activities include prospecting for clients, managing client relationships, conducting business valuations/exit planning consultations, and facilitating transactions.
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 · 23 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
FranNet presents meaningful acquisition risks due to system contraction, missing profitability data, prior fraud litigation, and aggressive royalty structure on lower-revenue franchisees, warranting careful validation before investment.
Score breakdown · what drove the 60 / 100 rating
- 01MINORUnit count declining 9.4% YoY (58 units) indicates system contraction and potential franchisee dissatisfaction
- 02MEDNo average net income disclosed in FDD — inability to validate profitability claims against $59,550–$97,527 investment
- 03HIGHFraud litigation in 2016 involving referral representations and Business Opportunity Statute violation, though settled
- 04MINORNo protected territory — franchisees compete directly with other FranNet consultants and independent competitors
- 05MEDTiered royalty structure heavily favors franchisor at lower revenue levels (10% up to $500k) with no disclosed breakeven threshold
- 06MINORAverage revenue of $291,700 suggests many franchisees fall in highest royalty bracket (10%), limiting net income potential
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
41 numbers
One-time purchase · CSV download · Validation questions included
FDD download
FranNet · FDD (2026) PDF