Bottom line
- Total investment $94K – $266K including a $49K franchise fee.
- Average unit revenue of $161K/year (median $155K).
- Rated CAUTION with a risk score of 71/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
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 Neighborhood Barre unit return on the cash you put in?
Unlevered ROIC · per unit
24%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Neighborhood Barre units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$739K
on $3.7M purchase
Total debt
$3.0M
SBA $1.8M + senior + seller note
Overview
About
Neighborhood Barre franchisees operate boutique fitness studios offering barre, yoga, and dance-inspired cardio classes to suburban clientele. Daily operations include managing instructors, scheduling classes, managing member retention through studios typically ranging 2,000-3,000 sq ft, and handling membership billing and customer service.
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 · 9 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
High-risk franchise with opaque profitability, litigation-plagued parent company, regulatory violations, and stagnant unit growth—investment protection severely compromised.
Score breakdown · what drove the 71 / 100 rating
- 01HIGHExtensive litigation across parent company involving fraud allegations, breach of contract, and multi-state franchise registration violations affecting CEO and related brands
- 02MINORNo average net income disclosure despite $94K-$266K investment requirement and $160K average revenue — profitability metrics completely opaque
- 03MINOROnly 22 units with unknown growth trajectory in a mature fitness/wellness category suggests stagnant or declining system expansion
- 04MEDHigh royalty burden (greater of 7% or $250/week = $13K annually minimum) on $160K revenue creates thin margin risk without disclosed net income
- 05HIGHGoing concern status indicates parent company financial instability despite franchise obligations
- 06MINORMulti-state regulatory actions for franchise disclosure violations suggest systemic compliance failures in FDD documentation
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
18 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Neighborhood Barre · FDD (2025) PDF