Bottom line
- Total investment $240K – $465K including a $40K franchise fee.
- Average unit revenue of $337K/year (median $295K).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 7 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 StarCycle unit return on the cash you put in?
Unlevered ROIC · per unit
27%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 StarCycle units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.6M
on $7.8M purchase
Total debt
$6.2M
SBA $3.9M + senior + seller note
Overview
About
StarCycle franchisees operate boutique indoor cycling studios offering fitness classes on stationary bikes with music-driven, instructor-led workouts. Day-to-day operations include managing class schedules, instructor hiring/training, facility maintenance, member billing/retention, and marketing to build a recurring revenue customer base in their protected territory.
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.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
StarCycle presents moderate-to-cautious risk as an early-stage franchise system with undisclosed profitability data, limited unit maturity, and fixed royalty obligations that may strain cash flow for lower-performing locations.
Score breakdown · what drove the 52 / 100 rating
- 01MEDNet income not disclosed in FDD — unable to validate profitability claims against $337k average revenue
- 02MINORSmall unit count (14 locations) limits data reliability and suggests early-stage system with unproven model at scale
- 03MINORHigh royalty floor of $500/month ($6,000 annually) creates fixed cost burden regardless of revenue performance
- 04MINOR22.2% YoY unit growth modest for franchise sector and insufficient to offset any potential attrition
- 05MINORWide investment range ($240k-$465k) suggests significant variability in startup costs and unclear path to 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
32 numbers
One-time purchase · CSV download · Validation questions included
FDD download
StarCycle · FDD (2024) PDF