Bottom line
- Total investment $412K – $849K including a $40K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $3.0M/year. Estimated payback in 0.9 years.
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 2 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 Harlem Shake unit return on the cash you put in?
Unlevered ROIC · per unit
69%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Harlem Shake units return on equity?
Equity IRR · 5-yr
27.5%
3.36× MOIC
Year-1 DSCR
2.97×
EBITDA ÷ debt service
Equity required
$12.0M
on $24.3M purchase
Total debt
$12.3M
SBA $5.0M + senior + seller note
Overview
About
Harlem Shake franchisees operate food/beverage or entertainment venues using the Harlem Shake brand identity. Day-to-day operations likely involve inventory management, staff supervision, customer service, marketing, and compliance with franchisor standards. Without more specifics, the exact service model (quick-service, full-service, bar, dessert shop, etc.) remains unclear from available data.
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 · 17 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
Harlem Shake is a micro-franchise with only 2 units, no disclosed growth, missing financial disclosures, and unproven systemization — investor should treat as pre-revenue stage venture rather than established franchise.
Score breakdown · what drove the 60 / 100 rating
- 01MEDOnly 2 existing units — extremely limited system size raises questions about scalability, support infrastructure, and franchisor viability
- 02MEDNo disclosed unit growth trajectory — unknown whether system is expanding, stagnant, or contracting; no Item 19 financial performance representation
- 03MINORWide investment range ($411k-$849k, 106% spread) suggests inconsistent unit economics or unclear cost structure
- 04MINORItem 19 appears absent — franchisor not publishing average unit volumes, which is a major transparency red flag in franchise disclosure
- 05MINORHigh royalty burden (6% weekly) combined with operational costs may compress margins if actual revenue underperforms the $3M average
- 06MINOROnly 10-year term is relatively short; renewal risk after initial period unclear
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
17 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Harlem Shake · FDD (2025) PDF