Resting Rainbow
Bottom line
- Total investment $285K – $629K including a $55K franchise fee.
- Average unit revenue of $659K/year (median $715K). Estimated payback in 2.1 years.
- Rated MODERATE with a risk score of 57/100. SBA loan default rate of 0.0% across 214 loans (below the industry average).
- Emerging franchise — only 3 years of franchising with 3 units. Early-stage systems carry higher risk but may offer better territory availability.
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 Resting Rainbow unit return on the cash you put in?
Unlevered ROIC · per unit
23%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Resting Rainbow units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.3M
on $6.6M purchase
Total debt
$5.3M
SBA $3.3M + senior + seller note
Overview
About
Resting Rainbow appears to operate a wellness or lifestyle service-based franchise (exact service model unclear from data provided). Franchisees likely manage daily client/customer interactions, scheduling, inventory, staffing, and local marketing while paying 7% of revenue or a $1,500 monthly minimum royalty to corporate.
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
Early-stage franchise with corporate going concern issues, minimal unit base, and high fixed royalties create significant operational and financial viability risks.
Score breakdown · what drove the 57 / 100 rating
- 01MINOROnly 3 units in system with unknown growth trajectory suggests early-stage or stalled expansion
- 02HIGHGoing Concern status is FALSE — potential financial instability or viability questions at corporate level
- 03MINORHigh royalty floor of $1,500/month ($18,000 annually) creates cash flow pressure even during slow revenue periods
- 04MINORNo Item 19 financial performance representation — cannot independently verify claimed $658k avg revenue or $221k net income
- 05MINORDual royalty structure (7% or $1,500 minimum) heavily favors franchisor on lower-revenue units, limiting franchisee upside
- 06MEDExtremely limited franchisee base (3 units) makes validation and peer support network minimal
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
15 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Resting Rainbow · FDD (2025) PDF