Bottom line
- Total investment $552K – $1.4M including a $35K franchise fee, 4.8% ongoing royalty.
- Average unit revenue of $818K/year (median $810K).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 85 loans (below the industry average).
- System contracting at -14.6% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 Huddle House unit return on the cash you put in?
Unlevered ROIC · per unit
12%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Huddle House units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.3M
on $6.7M purchase
Total debt
$5.4M
SBA $3.4M + senior + seller note
Overview
About
Franchisees operate casual dining restaurants serving breakfast, lunch, and dinner in a quick-service or fast-casual format. Day-to-day operations include managing kitchen and front-of-house staff, inventory procurement, food preparation, customer service, and local marketing to drive foot traffic and repeat business across day-parts.
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 · 9 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
Contracting franchise system with litigation history, missing profitability data, and high capital requirements presents meaningful risk for ROI recovery.
Score breakdown · what drove the 52 / 100 rating
- 01MINORUnit count declining 6.5% YoY (272 units) signals system contraction and potential market saturation or franchisee dissatisfaction
- 02HIGHNine total legal actions including fraudulent inducement and breach of contract claims suggest governance and disclosure issues
- 03MINORNo Average Net Income disclosure (Item 19) prevents ROI validation despite $818k average revenue — critical transparency gap
- 04MEDHigh initial investment range ($551k–$1.43M) combined with undisclosed profitability creates significant capital risk
- 05MINOR4.75% royalty on declining sales base may become unsustainable as system shrinks further
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
99 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Huddle House · FDD (2025) PDF