Bottom line
- Total investment $1.2M – $2.3M including a $40K franchise fee, 5.5% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated MODERATE with a risk score of 63/100. SBA loan default rate of 0.0% across 18 loans (below the industry average).
- System contracting at -20.7% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 Smashburger unit return on the cash you put in?
Unlevered ROIC · per unit
6%
Below typical band (30–60%)
Overview
About
Franchisees operate fast-casual burger restaurants serving premium smashed-beef patties, specialty toppings, and craft beverages. Day-to-day operations include food preparation, staff management, inventory control, POS systems, and customer service in dine-in/carry-out environments.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
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.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Smashburger presents HIGH RISK due to accelerating unit decline, material litigation history, absent financial transparency, and substantial capital requirements in a contracting franchise system.
Score breakdown · what drove the 63 / 100 rating
- 01MEDUnit count declined 16.7% YoY (194 units), indicating system contraction and potential franchisee struggles
- 02MEDNo Item 19 financial performance data disclosed — unable to validate claimed profitability or ROI
- 03HIGHTwo significant litigation settlements (2023 and 2025) suggest operational/marketing compliance issues and reputational risk
- 04MINORHigh initial investment ($1.2M–$2.3M) paired with declining unit base creates elevated failure risk for new franchisees
- 05MED5.5% royalty on undisclosed average revenue means true net margins are unknowable; cash flow sustainability unclear
- 06MINOR15-year term locks franchisees into declining brand with no performance benchmarks to assess exit viability
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
76 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Smashburger · FDD (2025) PDF