Rocky Mountain Chocolate Factory
Bottom line
- Total investment $176K – $872K including a $35K franchise fee.
- Average unit revenue of $614K/year (median $557).
- Rated MODERATE with a risk score of 57/100. SBA loan default rate of 0.0% across 186 loans (below the industry average).
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
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 Rocky Mountain Chocolate Factory unit return on the cash you put in?
Unlevered ROIC · per unit
12%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Rocky Mountain Chocolate Factory units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$491K
on $2.5M purchase
Total debt
$2.0M
SBA $1.2M + senior + seller note
Overview
About
Franchisees operate retail chocolate shops selling premium chocolates, candy, and confections under the Rocky Mountain Chocolate Factory brand. Daily operations include inventory management, point-of-sale transactions, customer service, seasonal product promotions, and potential catering/corporate sales. Stores typically occupy 1,000-1,500 sq ft in malls, street-front locations, or outlet centers.
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 · 19 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
Declining franchise system with active litigation, undisclosed profitability, going concern status, and an opaque royalty structure presents meaningful risk despite protected territory.
Score breakdown · what drove the 57 / 100 rating
- 01MINORSystem declining 7.4% YoY with only 140 units remaining—suggests weakening brand momentum and potential saturation
- 02HIGHMultiple active litigation cases including fraudulent inducement and breach of contract claims raise concerns about corporate practices and transparency
- 03MEDNet income not disclosed in FDD Item 19—prevents accurate ROI calculation and suggests weak or inconsistent franchisee profitability
- 04HIGHGoing concern status indicates potential financial instability at corporate level, affecting support and long-term viability
- 05MINORWide royalty range (4-6%) and initial 5% rate on gross sales (not net) creates unpredictable cost structure and incentivizes corporate revenue extraction over franchisee profitability
- 06MEDHigh investment ceiling ($871,700) with undisclosed profit data creates disproportionate risk-to-reward scenario
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
84 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Rocky Mountain Chocolate Factory · FDD (2025) PDF