Hello Sugar
Bottom line
- Total investment $91K – $736K including a $50K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $719K/year (median $566K). Estimated payback in 2.2 years.
- Rated STRONG with a risk score of 42/100. SBA loan default rate of 0.0% across 30 loans (below the industry average).
- System growing at 210.0% CAGR over 3 years with 108 total units — strong expansion trajectory.
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 Hello Sugar unit return on the cash you put in?
Unlevered ROIC · per unit
35%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Hello Sugar units return on equity?
Equity IRR · 5-yr
49.5%
7.46× MOIC
Year-1 DSCR
1.89×
EBITDA ÷ debt service
Equity required
$2.0M
on $10.1M purchase
Total debt
$8.0M
SBA $5.0M + senior + seller note
Overview
About
Hello Sugar franchisees operate dessert/confectionery retail locations (likely sweet treats, baked goods, or specialty candies) focused on point-of-sale transactions and walk-in traffic. Day-to-day operations include inventory management, customer service, food preparation/display, and local marketing to drive foot traffic to their protected territory.
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 · 16 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
Hello Sugar shows explosive growth without financial transparency (no Item 19), raising concerns about unit quality, sustainability, and whether advertised revenues are representative.
Score breakdown · what drove the 42 / 100 rating
- 01MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify the $718,919 average revenue claim
- 02MINORExplosive 52.5% YoY unit growth is unsustainable and suggests potential quality control issues or aggressive recruitment over franchisee success
- 03MINORWide investment range ($90,984–$736,250) indicates highly variable unit economics and undefined cost structure
- 04MINOR6% royalty on gross revenue (not net) means franchisees pay during unprofitable months
- 05HIGHGoing Concern = False suggests franchisor financial stability concerns, though not explicitly stated as a threat
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
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Hello Sugar · FDD (2025) PDF