Bottom line
- Total investment $224K – $452K including a $30K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $654K/year. Estimated payback in 3.3 years.
- Rated MODERATE with a risk score of 63/100. SBA loan default rate of 0.0% across 4 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 I Scream Gelato unit return on the cash you put in?
Unlevered ROIC · per unit
27%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 I Scream Gelato units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.2M
on $5.9M purchase
Total debt
$4.7M
SBA $2.9M + senior + seller note
Overview
About
Franchisees operate small-format gelato retail shops, managing daily production/service of Italian-style frozen desserts, inventory, staffing, and customer operations. The business model relies on high-margin frozen dessert sales in protected territories with ongoing royalty payments 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 · 14 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
Micro-franchise system with unproven growth, franchisor financial concerns, and insufficient disclosure depth creates substantial execution and viability risk.
Score breakdown · what drove the 63 / 100 rating
- 01MINOROnly 5 operating units with unknown growth trajectory indicates minimal system traction and high concentration risk
- 02HIGHGoing Concern = False suggests franchisor financial instability or accounting red flags requiring immediate clarification
- 03MED15.8% net profit margin is modest for food retail; combined with 6% royalty leaves limited cushion for franchisee profitability
- 04MINORWide investment range ($223k-$451k) lacks transparency on what drives 102% cost variance between low and high estimates
- 05MINORNo Item 19 financial data disclosure limits ability to validate the $653k average revenue claim across only 5 units
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
14 numbers
One-time purchase · CSV download · Validation questions included
FDD download
I Scream Gelato · FDD (2024) PDF