Bottom line
- Total investment $163K – $455K including a $20K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $313K/year.
- Rated STRONG with a risk score of 52/100.
- 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 Freddo unit return on the cash you put in?
Unlevered ROIC · per unit
16%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Freddo units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$595K
on $3.0M purchase
Total debt
$2.4M
SBA $1.5M + senior + seller note
Overview
About
Freddo franchisees operate quick-service restaurants or food service concepts (exact format unclear from data provided). Day-to-day operations likely include food preparation, customer service, inventory management, and local marketing to drive the reported ~$313k average unit volume.
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.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Freddo presents moderate-to-caution risk: undisclosed profitability metrics, unprotected territories, and a small system size limit visibility into unit economics and scalability.
Score breakdown · what drove the 52 / 100 rating
- 01MEDNet income not disclosed in FDD Item 19 — unable to validate profitability claims against $313k average revenue
- 02MINORUnprotected territory creates direct competition risk and cannibalization potential among 18 units
- 03MEDSmall franchise system (18 units) with modest 88.9% YoY growth suggests limited scale and market penetration
- 04MEDHigh investment range ($163k-$455k) relative to disclosed average revenue without profitability transparency
- 05MINOR5-year term is shorter than industry standard (10 years), creating renewal uncertainty and reduced ROI window
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
16 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Freddo · FDD (2025) PDF