Bottom line
- Total investment $58K – $72K including a $50K franchise fee, 8.0% ongoing royalty.
- Average unit revenue of $306K/year (median $156K).
- Rated MODERATE with a risk score of 67/100. SBA loan default rate of 0.0% across 5 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 KidzArt unit return on the cash you put in?
Unlevered ROIC · per unit
46%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 KidzArt units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$183K
on $917K purchase
Total debt
$733K
SBA $0.5M + senior + seller note
Overview
About
KidzArt franchisees operate art instruction centers offering classes, camps, and workshops for children. Day-to-day operations include scheduling classes, teaching or managing instructors, managing student enrollment, and handling facility operations. Revenue derives from class tuition, seasonal camps, birthday parties, and retail art supply sales.
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
Contracting system with going concern uncertainty, opaque profitability, and unsustainable unit economics raises serious viability concerns.
Score breakdown · what drove the 67 / 100 rating
- 01MEDSystem contracting sharply: 15.4% unit decline YoY (12 units) indicates franchisee attrition and potential model stress
- 02HIGHGoing Concern status is FALSE — franchisor may face existential financial or operational challenges
- 03MEDNet Income not disclosed in Item 19 — impossible to assess actual franchisee profitability; $305k avg revenue is meaningless without expense data
- 04MINORHigh franchise fee ($49,500) relative to system size (12 units) suggests weak recruitment momentum and potential franchisor cash flow dependency
- 05MINOR8% royalty on gross revenue is punitive if net margins are thin — high leverage to royalty burden without profitability transparency
- 06MINORTiny, shrinking franchise system (12 units) lacks scale, peer support network, and vendor leverage; high franchise failure risk
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
32 numbers
One-time purchase · CSV download · Validation questions included
FDD download
KidzArt · FDD (2026) PDF