Bottom line
- Total investment $148K – $202K including a $60K franchise fee.
- Average unit revenue of $584K/year (median $584K). Estimated payback in 0.9 years.
- Rated STRONG with a risk score of 49/100. SBA loan default rate of 0.0% across 56 loans (below the industry average).
- System growing at 366.7% CAGR over 3 years with 43 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 HomeSmiles unit return on the cash you put in?
Unlevered ROIC · per unit
28%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 HomeSmiles units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$467K
on $2.3M purchase
Total debt
$1.9M
SBA $1.2M + senior + seller note
Overview
About
HomeSmiles franchisees operate a home services or dental/cosmetic smile-related business (likely teeth whitening, cosmetic dentistry support, or home-based smile care services). Day-to-day activities include client acquisition, service delivery/treatment provision, appointment scheduling, marketing in protected territory, and managing recurring revenue from customer retention programs.
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 · 21 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
Hypergrowth franchise with opaque franchisor financials, aggressive royalty structure, and no earnings claim substantiation presents meaningful execution and profitability risk despite strong unit economics on paper.
Score breakdown · what drove the 49 / 100 rating
- 01MINORExtreme unit growth (366.7% YoY) suggests either aggressive recruitment or system instability—unsustainable expansion raises retention/profitability concerns
- 02MINORMinimum monthly royalty fee structure (greater of 6% or minimum) may be onerous for franchisees in slower markets and creates cash flow risk
- 03HIGHGoing Concern = False is absent/unclear; lack of transparency on franchisor financial health is a major red flag
- 04MINORHigh franchise fee ($59,500) combined with wide investment range ($148k-$202k) and aggressive royalty structure creates elevated break-even pressure
- 05MEDNo Item 19 (Earnings Claim Document) disclosed—cannot independently verify if $205k average net income is achievable or realistic
- 06HIGHRapid expansion without disclosed litigation may indicate emerging disputes or franchisee dissatisfaction not yet surfaced in legal filings
- 07MINORWide investment range spread ($54k delta) suggests inconsistent territory setup costs or undefined support/infrastructure scaling
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
42 numbers
One-time purchase · CSV download · Validation questions included
FDD download
HomeSmiles · FDD (2026) PDF