Bottom line
- Total investment $83K – $130K including a $60K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $1.2M/year. Estimated payback in 0.3 years.
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- Emerging franchise — only 2 years of franchising with 3 units. Early-stage systems carry higher risk but may offer better territory availability.
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 Hole in the Wall unit return on the cash you put in?
Unlevered ROIC · per unit
103%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Hole in the Wall units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$946K
on $4.7M purchase
Total debt
$3.8M
SBA $2.4M + senior + seller note
Overview
About
Hole in the Wall franchisees operate a food/beverage establishment (likely casual dining or specialty food concept) generating approximately $1.18M in annual revenue. Day-to-day operations involve managing customer service, inventory, staffing, food preparation/service, and POS systems while remitting 6% royalties to the franchisor.
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 · 10 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
Hole in the Wall presents caution-level risk: a micro-franchise system with unverified financial claims, unclear franchisor stability, and insufficient operating units to validate the business model.
Score breakdown · what drove the 60 / 100 rating
- 01MINOROnly 3 units in system with unknown growth trajectory indicates extremely small/stagnant franchise
- 02MEDNo Item 19 (Financial Performance Representations) disclosed despite $364k average net income claim - cannot verify earnings
- 03HIGHGoing Concern status is False, suggesting potential financial instability or unclear long-term viability of franchisor
- 04MINORHigh royalty burden (6% + minimum) on $1.18M average revenue reduces net margins significantly
- 05MINORFranchise fee of $59,500 is substantial (73% of minimum investment) with only 3 reference franchisees available
- 06MINORUnknown growth rate with only 3 units raises questions about franchisee demand and system expansion
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
Hole in the Wall · FDD (2025) PDF