Bottom line
- Total investment $343K – $637K including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $1.1M). Estimated payback in 2.4 years.
- Rated MODERATE with a risk score of 63/100.
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 Pappalecco unit return on the cash you put in?
Unlevered ROIC · per unit
22%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Pappalecco units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$894K
on $4.5M purchase
Total debt
$3.6M
SBA $2.2M + senior + seller note
Overview
About
Pappalecco franchisees operate Italian casual dining establishments serving traditional Italian cuisine. Day-to-day operations include food preparation, kitchen management, front-of-house service, inventory control, and customer relationship management in a sit-down dining environment.
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 12 · 1 state reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
1
states with franchisees (per FDD Item 12)
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
Pappalecco presents caution-level risk: a micro-franchise system with only 2 units, unverified financial claims, and insufficient franchisor revenue to support meaningful franchisee support.
Score breakdown · what drove the 63 / 100 rating
- 01MINOROnly 2 operating units represents an extremely small, unproven franchise system with no demonstrated growth trajectory
- 02HIGHNo Item 19 financial performance representation ('Going Concern: False') limits ability to verify the $1.1M average revenue claim independently
- 03MINORHigh initial investment ($343K-$636.5K) relative to system size creates significant risk if franchisee underperforms or system contracts
- 04HIGHAbsence of disclosed litigation is notable but not reassuring given the minimal unit count and short operating history
- 05MINOR5% royalty on $1.1M revenue generates only $55,750 annually in franchisor revenue per unit, potentially insufficient to support franchise operations and support infrastructure
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
1 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Pappalecco · FDD (2025) PDF