Pepper Palace
Bottom line
- Total investment $211K – $288K including a $50K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $349K/year (median $323K).
- Rated MODERATE with a risk score of 65/100.
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 Pepper Palace unit return on the cash you put in?
Unlevered ROIC · per unit
18%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Pepper Palace units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$489K
on $2.4M purchase
Total debt
$2.0M
SBA $1.2M + senior + seller note
Overview
About
Franchisees operate small retail specialty stores selling premium spices, seasonings, pepper blends, and related culinary products. Day-to-day operations include customer service, inventory management, point-of-sale transactions, product sampling/demonstrations, and local marketing to drive foot traffic in mall or street-front locations.
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 · 16 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.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Pepper Palace presents elevated risk due to non-disclosure of profitability data, unclear franchisor financial health, small undocumented unit base, and inability to independently verify claimed $349k average revenue.
Score breakdown · what drove the 65 / 100 rating
- 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot validate $349k avg revenue claim or actual profitability
- 02HIGHGoing Concern = False indicates potential financial instability or uncertain future viability of franchisor
- 03MEDOnly 81 units system-wide suggests limited scale, unproven model, and higher failure risk vs. established chains
- 04MEDNet income not disclosed — franchisees cannot assess true earning potential after 6% royalties + operating costs
- 05MINORUnit growth trajectory unknown — cannot determine if system is expanding, stagnant, or contracting
- 06MEDHigh initial investment ($211k-$288k) relative to small system size and undisclosed profitability
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
17 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Pepper Palace · FDD (2025) PDF