Bottom line
- Total investment $154K – $663K including a $30K franchise fee.
- Average unit revenue of $580K/year (median $465K).
- Rated CAUTION with a risk score of 72/100. SBA loan default rate of 0.0% across 1 loans (below the industry average).
- 20 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
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 Great Steak unit return on the cash you put in?
Unlevered ROIC · per unit
21%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Great Steak units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$928K
on $4.6M purchase
Total debt
$3.7M
SBA $2.3M + senior + seller note
Overview
About
Great Steak franchisees operate quick-service sandwich/steak shops, likely comparable to Philly cheesesteak or premium sandwich concepts. Day-to-day operations involve food preparation, inventory management, staff scheduling, and counter service. The model appears volume-dependent given the high average revenue baseline ($579,903), requiring consistent customer traffic and operational efficiency.
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 · 7 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
Great Steak presents HIGH RISK due to declining unit base (-4% YoY), undisclosed profitability, multiple active litigations including franchise law violations, unprotected territory, and aggressive royalty floors relative to system revenue.
Score breakdown · what drove the 72 / 100 rating
- 01MINORSystem shrinking at -4.0% YoY (24 units) indicates declining franchisee success and potential market saturation
- 02HIGHMultiple ongoing litigations including Washington Franchise Investment Protection Act violations and misrepresentation claims suggest franchisor credibility issues
- 03MINORNo average net income disclosure (Item 19) prevents accurate ROI assessment despite $153.5K-$662.8K investment range
- 04MINORRoyalty floor of $400/week ($20,800/year) is aggressive relative to average revenue of $579,903, creating cash flow pressure in slow periods
- 05MINORUnprotected territory creates direct competition risk from other Great Steak franchisees in same market
- 06HIGHLitigation history includes state administrative consent orders, indicating regulatory enforcement actions
- 07MEDHigh investment ceiling ($662,850) with unit decline suggests franchisor pushing larger formats that underperform
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
8 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Great Steak · FDD (2024) PDF