Mellow Mushroom
Bottom line
- Total investment $1.3M – $4.8M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.7M/year (median $2.6M).
- Rated STRONG with a risk score of 54/100. SBA loan default rate of 0.0% across 177 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 Mellow Mushroom unit return on the cash you put in?
Unlevered ROIC · per unit
13%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Mellow Mushroom units return on equity?
Equity IRR · 5-yr
28.7%
3.53× MOIC
Year-1 DSCR
2.82×
EBITDA ÷ debt service
Equity required
$10.0M
on $21.5M purchase
Total debt
$11.4M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate fast-casual pizzerias serving specialty pies, craft beer, and casual dining. Day-to-day responsibilities include managing kitchen and front-of-house staff, managing inventory/food costs, executing brand recipes and quality standards, and driving local marketing and customer acquisition.
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
Mellow Mushroom presents meaningful caution due to declining unit count, missing profitability data, and high capital requirements relative to system contraction.
Score breakdown · what drove the 54 / 100 rating
- 01MEDUnit count declined 3.1% YoY (161 units) indicating system contraction and potential market saturation or franchisee struggles
- 02MEDNet income not disclosed in Item 19 — impossible to assess actual profitability despite $2.68M average revenue; royalty burden at 5% unclear without expense breakdown
- 03MINORHigh investment range ($1.33M-$4.84M) with wide variance suggests inconsistent unit economics or significant location-dependent costs
- 04MINOR15-year term locks franchisee into long commitment with shrinking support network and declining peer learning community
- 05HIGHNo litigation disclosed but declining units may mask underlying franchisee disputes, quality issues, or brand weakness
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
92 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Mellow Mushroom · FDD (2026) PDF