Stem Guys Tire Supplies
Bottom line
- Total investment $91K – $237K including a $50K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $439K/year (median $451K). Estimated payback in 1.4 years.
- Rated CAUTION with a risk score of 70/100.
- Emerging franchise — only 2 years of franchising with 1 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 Stem Guys Tire Supplies unit return on the cash you put in?
Unlevered ROIC · per unit
33%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Stem Guys Tire Supplies units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$615K
on $3.1M purchase
Total debt
$2.5M
SBA $1.5M + senior + seller note
Overview
About
Stem Guys franchisees operate retail tire supply shops selling tire stems, valves, and related accessories to automotive service centers, dealerships, and DIY customers. Day-to-day operations include inventory management, customer sales, and potentially installation or consulting services for tire maintenance products.
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 12 · 1 state reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
1
states with franchisees (per FDD Item 12)
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Stem Guys presents extreme risk due to going concern status, single-unit system, absence of financial disclosures, and unproven scalability in a niche tire supplies market.
Score breakdown · what drove the 70 / 100 rating
- 01HIGHGoing Concern status is FALSE — indicates franchisor financial instability or operational viability concerns
- 02MINOROnly 1 unit in system with unknown growth trajectory — suggests early-stage, unproven concept or system collapse
- 03MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify claimed $439K revenue and $118K net income figures
- 04MINORHigh franchise fee ($49,500) relative to single-unit track record — disproportionate upfront cost for unvalidated business model
- 05MINOR7% royalty on gross revenue (not net) — franchisee bears revenue risk while franchisor takes fixed percentage regardless of 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
1 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Stem Guys Tire Supplies · FDD (2025) PDF