Koala InsulationFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Koala Insulation franchise requires a total initial investment of $195K – $242K, including a $50K franchise fee. Per the 2026 FDD, average unit revenue was $1.3M[2]. SBA 7(a) loans show a 5.9% charge-off rate across 85 loans[1]. Verdict grade: B. Run a live ROI scan →
Data last verified June 21, 2026 · figures per the 2026 FDD issuance
Overview
- Investment
- $195K – $242K
- 69th pct Home Services
- Avg gross sales
- $1.3M
- 36th pct Home Services
- Royalty
- N/A
- Units
- 333
- 73rd pct Home Services
- SBA default
- 5.9%
- system-wide median varies by category
Quick verdict · Home Services · color = vs category peers
Green = >15% above Home Services avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Each dollar invested generates 5.9x in gross revenue, well above the typical 1.5-2.5x range.
Started franchising in 2023. Newer systems carry more uncertainty but may offer better territories.
The system contracted 14% year-over-year. Investigate why units are closing.
97% cash-on-cash return. Above the 20% threshold most investors target.
Bottom line
- Total investment $195K – $242K including a $50K franchise fee.
- Average unit revenue of $1.3M/year (median $1.0M), with an estimated 97% cash-on-cash return.
- Verdict B (Above Average) with a risk score of 55/100. SBA loan charge-off rate of 5.9% across 85 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Koala Insulation Franchisor, LLC
- Parent company
- Empower Brands Franchising, LLC
- Incorporated in
- DE
- HQ
- 445 West Drive, Melbourne, FL 32904
- Auditor
- Smith + Howard PC
- Audited financials
- Franchisor revenue
- $79.5M
- vs $96.8M prior year
Overview
About
Koala Insulation franchisees provide residential and commercial insulation installation and retrofitting services. Daily operations involve managing installation crews, scheduling jobs, sourcing materials, and customer service. The business model relies on local market penetration, repeat customers, and referrals.
- CEO
- Scott Zide
- Headquarters
- FL
- Founded
- 2023
- FDD year
- 2026
- States available
- 37
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $50K | $50K |
| Working capital (3–6 mo) | $50K | $50K |
| Equipment, build-out, other | $95K | $142K |
| Total initial investment | $195K | $242K |
Source: Koala Insulation 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$155K
12.0% margin
Unlevered ROIC
58%
EBITDA / total invested capital
Payback
21 mo
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $195K – $242K
- Below avg, review vs category
- Liquid capital req'd
- $50K – $50K
- Below avg, review vs category
- Franchise fee
- $50K – $50K
- Better than avg vs category
- Royalty
- Greater of (i) aggregate of monthly Minimum Royalty Fees …
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 4.5%
- vs 9–13% typical
- Payback period
- 1.0 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $344 |
| Transfer fee | $10K |
| Renewal fee | $5K |
| Total fee load | 4.5% of rev |
A 4.5% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
Financial Performance
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.0M
- Avg net income
- $212K
- Cash-on-cash
- 97.1%
- Based on Net Income / investment midpoint
- Item 19 type
- gross_sales
- Sample size
- 76 units
- vs category median 25 · large
- Range (low → high)
- $261K→$4.3M
- Cohort dispersion (min → max)
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 349 Home Services brands
Revenue is 5.9x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
vs Home Services averages
How Koala Insulation Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 333
- Opened
- 26
- Last reporting year
- Closed
- 85
- Turnover rate
- 25.5%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -13.5%
- Net unit change last year
- 3-yr CAGR
- +2.1%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 30
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 36 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 85
- Loan volume
- $19.7M
- Median loan
- $251K
- 50th percentile
- Charge-off rate
- 5.9%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 76.2%
- 5-yr charge-off
- 23.8%
- Loans approved 2021+
- Active lenders
- 25
- Defaults
- 5
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Koala Insulation's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 6-year lending trend
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Declining franchise system with active litigation, unclear franchisor financial health, and unverified income claims presents elevated risk for new franchisees.
Audited financials (Item 21)
Yes · Smith + Howard PC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 55 / 100 rating
- 01MEDSystem contracting sharply with 13.5% unit decline YoY (333 units), indicating franchisee attrition or closure problems
- 02HIGHActive litigation with founder-level stakeholder (Salim Makhlouf/Lotus & The Rooster) alleging misrepresentation and inadequate training—suggests systemic franchisor issues
- 03HIGHGoing Concern status is FALSE, raising questions about franchisor financial viability and ability to support franchisees
- 04MINORHigh royalty burden: 3.5-6.5% of sales PLUS minimum monthly fees ($0-$1,218.75), creating dual-fee structure that could exceed 10% of net income
- 05MINORNo Item 19 (Financial Performance Representations) provided—unable to validate the claimed $211,897 average net income or $1,290,342 revenue figures independently
- 06MINORWide investment range ($194,885-$241,736) and wide royalty range (3.5-6.5%) suggests inconsistent unit economics or territorial pricing variability
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Geography / Population |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Florida |
| Litigation count | 1 |
Items 10, 11
Training & Operations
- Classroom training
- 42 hrs
- On-the-job training
- 39 hrs
- POS system
- QuickBooks and designated Customer Database Software
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: QuickBooks and designated Customer Database Software
Item 20 · call current owners
Franchisee Contacts
122 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Koala Insulation · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Koala Insulation franchise?
The total investment to open a Koala Insulation franchise ranges from $195K – $242K, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Koala Insulation franchise owners earn?
According to Item 19 of the Koala Insulation FDD, the average gross sales per unit is $1.3M. The median is $1.0M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Koala Insulation's franchise failure rate?
Based on SBA 7(a) loan data, Koala Insulation has a charge-off rate of 5.9% across 85 loans, meaning 5.9% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Koala Insulation franchise locations are there?
As of their most recent FDD filing, Koala Insulation has 333 total units in the United States, including 326 franchised units and 0 company-owned units. 26 new units were opened in the latest reporting year.
Is Koala Insulation a good franchise to buy?
FranchiseVerdict rates Koala Insulation as a B-grade franchise with a risk score of 55 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.