Bottom line
- Total investment $198K – $584K including a $35K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $699K/year (median $667K). Estimated payback in 5.1 years.
- Rated CAUTION with a risk score of 68/100. SBA loan default rate of 0.0% across 8 loans (below the industry average).
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 House of Bread unit return on the cash you put in?
Unlevered ROIC · per unit
15%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 House of Bread units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$420K
on $2.1M purchase
Total debt
$1.7M
SBA $1.0M + senior + seller note
Overview
About
House of Bread franchisees operate neighborhood bakery retail locations, likely producing and selling fresh baked goods (breads, pastries, etc.) to walk-in customers. Daily operations involve inventory management, production scheduling, customer service, and staff management in a food service environment with seasonal demand volatility.
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 · 31 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
House of Bread presents HIGH RISK due to rapid unit contraction, going concern status, marginal unit profitability, and system too small to provide reliable data or franchisee support infrastructure.
Score breakdown · what drove the 68 / 100 rating
- 01MEDSystem contraction: 20% unit decline YoY (6 units) signals franchisee dissatisfaction or system failure
- 02HIGHGoing Concern warning: Financial viability of franchisor is questioned, increasing operational support risk
- 03MINORThin unit margins: Net income of only $76,767 on $699,495 revenue (11% net margin) leaves little buffer for cost increases or underperformance
- 04MINORSmall system size: Only 6 units makes system-wide data unreliable and limits peer support/learning network
- 05MINORHigh investment-to-earnings ratio: $198k-$584k investment against $76k average net income yields 2.6-7.6 year simple payback with zero growth trajectory
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
33 numbers
One-time purchase · CSV download · Validation questions included
FDD download
House of Bread · FDD (2025) PDF