B61/100

Pappalecco — Financial Models

Food & Beverage - Coffee & Tea · Investment: $343K – $637K · Avg revenue: $1.1M

Blue values = direct from FDD (Item 7 investment, Item 19 revenue)Gray values = category-benchmarked estimate — override any field

What one unit earns on your invested capital

Model A · Single-Unit Return

Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC — below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.

Note: Item 19 revenue is what the franchisor discloses — it's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.

Returns model · single-unit ROIC

What would one Pappalecco unit return on the cash you put in?

From FDDCategory estimateYou overrode an FDD value

Revenue · per unit, per yearFDD

FDD Item 19 reports $1,117,491 per unit

Franchisor take · royalty + ad fundFDD

RoyaltyFDDtyp 6–8%

Ad fundFDDtyp 3–5%

Operating costs · restaurant category estimateest.

COGSest.

Laborest.

Rent / occupancyest.

Other operatingest.

Total invested capital · what you put in to openFDD

Initial investmentFDD

FDD Item 7: $343K–$637K (midpoint used)

Working capitalFDD

FDD reports $50K–$80K

Unlevered ROIC · per unit

22%

Below the 30–60% attractive-franchise band

0%30–60% attractive band80%

Store EBITDA · annual

$123K

EBITDA margin

11.0%

Total invested

$555K

Payback

54 mo

Single-unit only. A multi-unit portfolio gives up roughly 5–15% of this to shared services (corporate G&A) before reaching the ~10-unit break-even point.

What 25 units return when you use SBA financing

Model B · Return on Equity — Debt-Financed Acquisition

Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).

This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.

What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K — including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.

Levered LBO scenario · Yale Crease Capital framing

What would 25 Pappalecco units return on equity?

Edit assumptions

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

These models are for research and scenario planning only — not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.