Bottom line
- Total investment $195K – $242K including a $50K franchise fee.
- Average unit revenue of $1.3M/year (median $1.0M). Estimated payback in 1.0 years.
- Rated STRONG with a risk score of 46/100. SBA loan default rate of 0.0% across 176 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 Koala Insulation unit return on the cash you put in?
Unlevered ROIC · per unit
58%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Koala Insulation 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 $6.5M purchase
Total debt
$5.2M
SBA $3.2M + senior + seller note
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.
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 · 25 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
Declining franchise system with active litigation, unclear franchisor financial health, and unverified income claims presents elevated risk for new franchisees.
Score breakdown · what drove the 46 / 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
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
55 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Koala Insulation · FDD (2026) PDF