Bottom line
- Total investment $1.0M – $1.4M including a $40K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.2M/year (median $2.1M). Estimated payback in 3.5 years.
- Rated STRONG with a risk score of 53/100. SBA loan default rate of 0.0% across 8 loans (below the industry average).
- System contracting at -9.6% 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 Newk's Eatery unit return on the cash you put in?
Unlevered ROIC · per unit
28%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Newk's Eatery units return on equity?
Equity IRR · 5-yr
29.4%
3.62× MOIC
Year-1 DSCR
2.75×
EBITDA ÷ debt service
Equity required
$9.2M
on $20.2M purchase
Total debt
$11.1M
SBA $5.0M + senior + seller note
Overview
About
Newk's Eatery franchisees operate fast-casual restaurants serving fresh, made-to-order sandwiches, salads, and beverages. Daily operations include food preparation, inventory management, customer service, staffing, and point-of-sale management in a limited-service format with dine-in and take-out options.
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 · 11 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
Newk's presents moderate-to-cautionary risk: declining unit growth, unverified financial claims, and high capital requirements relative to profit margins suggest careful validation is essential before investment.
Score breakdown · what drove the 53 / 100 rating
- 01MINORUnit count declining 2.9% YoY suggests system contraction and potential franchisee dissatisfaction
- 02MINORNo Item 19 financial performance representations limits ability to validate average revenue/income claims
- 03MINORHigh initial investment ($1.02M-$1.41M) with modest 16% average net profit margin creates extended break-even period
- 04MINORRelatively low royalty rate (5%) may indicate tight franchisor margins and reduced support capacity
- 05MEDMid-tier unit count (95 units) provides limited brand recognition and purchasing power vs. larger chains
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
66 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Newk's Eatery · FDD (2025) PDF