Bottom line
- Total investment $594K – $1.2M including a $49K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $4.5M/year (median $4.2M). Estimated payback in 0.6 years.
- Rated MODERATE with a risk score of 56/100.
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 Magnolia Bakery 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 Magnolia Bakery units return on equity?
Equity IRR · 5-yr
37.0%
4.83× MOIC
Year-1 DSCR
2.23×
EBITDA ÷ debt service
Equity required
$4.4M
on $13.4M purchase
Total debt
$9.0M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate premium artisan bakery retail locations featuring signature cupcakes, cakes, and baked goods, managing daily production, staffing, inventory, and customer-facing sales. Operations require baking expertise or trained staff, retail space management, and adherence to brand recipes and presentation standards.
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 · 15 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.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Magnolia Bakery presents cautionary risk due to a micro-sized system with no published financials, prior international disputes, and limited growth visibility despite attractive per-unit economics.
Score breakdown · what drove the 56 / 100 rating
- 01MINOROnly 11 units system-wide with unknown/stagnant growth trajectory raises scalability and viability concerns
- 02HIGHNo Item 19 financial performance representations (Going Concern: False) limits ability to validate the $1.39M average net income claim
- 03MINOR2017 international arbitration settlement ($349K over 48 months) indicates management/execution challenges and operational disputes
- 04MINORHigh initial investment ($594K-$1.19M) relative to small franchise system size creates heightened franchisee risk
- 05MINOR6% royalty on $4.46M average revenue ($267K annually) is substantial margin erosion with unproven unit economics transparency
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
19 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Magnolia Bakery · FDD (2025) PDF