Bottom line
- Total investment $92K – $168K including a $60K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $2.1M/year.
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 2 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 SD TECH unit return on the cash you put in?
Unlevered ROIC · per unit
222%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 SD TECH units return on equity?
Equity IRR · 5-yr
30.4%
3.76× MOIC
Year-1 DSCR
2.65×
EBITDA ÷ debt service
Equity required
$8.1M
on $18.7M purchase
Total debt
$10.6M
SBA $5.0M + senior + seller note
Overview
About
SD TECH franchisees operate technology-focused service delivery businesses generating approximately $2.08M in gross revenue per location. Day-to-day operations likely involve client management, service delivery, and business development within a protected territory, though specific service offerings are not detailed.
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 · 15 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
Pre-revenue-stage franchise system with only 2 units, undisclosed profitability metrics, and unproven unit economics poses substantial validation and scalability risk.
Score breakdown · what drove the 60 / 100 rating
- 01MEDOnly 2 existing units with unknown growth trajectory indicates extremely limited operating history and system validation
- 02MEDNet income not disclosed despite $2M+ average revenue suggests franchisor may be hiding profitability concerns or unit performance is highly variable
- 03MINORHigh initial investment range ($91,650-$168,000) relative to only 2 proven locations creates unvalidated ROI model
- 04MINORMassive gap between lowest and highest investment suggests inconsistent unit economics or undefined build-out standards
- 05MINOR6% royalty on gross revenue (not net) compounds cash flow risk if unit profitability is marginal
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
20 numbers
One-time purchase · CSV download · Validation questions included
FDD download
SD TECH · FDD (2025) PDF