Bottom line
- Total investment $642K – $937K including a $45K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $908K/year (median $906K). Estimated payback in 6.2 years.
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 43 loans (below the industry average).
- System contracting at -12.5% 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 Kolache Factory unit return on the cash you put in?
Unlevered ROIC · per unit
10%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Kolache Factory units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$363K
on $1.8M purchase
Total debt
$1.5M
SBA $0.9M + senior + seller note
Overview
About
Kolache Factory franchisees operate quick-service bakery/café units specializing in Czech-style pastries (kolaches), coffee, and light breakfast/lunch items. Day-to-day operations include pre-dawn baking or receiving par-baked products, point-of-sale management, inventory control, and staffing in high-traffic locations (typically 1,500–2,500 sq ft retail spaces).
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 · 7 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 high capital requirements, undisclosed financial performance standards, and modest profit margins relative to investment creates meaningful risk despite clean litigation history.
Score breakdown · what drove the 52 / 100 rating
- 01MINORUnit count declining 6.7% YoY indicates system contraction and potential franchisee dissatisfaction
- 02MEDNo Item 19 financial performance representation disclosed—actual franchisee earnings may differ significantly from $127k average net income
- 03MINORHigh initial investment ($641k–$937k) relative to modest average net income ($127k) yields 5-7 year payback with no guarantee of achieving averages
- 04MINOR6% royalty on $908k average revenue equals ~$54.5k annual fee, consuming 43% of average net income
- 05MINORDeclining unit base suggests difficulty recruiting and retaining franchisees; may indicate operational or market challenges not yet public
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
30 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Kolache Factory · FDD (2025) PDF