Bottom line
- Total investment $91K – $195K including a $45K franchise fee, 8.0% ongoing royalty.
- Average unit revenue of $224K/year (median $178K).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 20 loans (below the industry average).
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 STEMTREE unit return on the cash you put in?
Unlevered ROIC · per unit
18%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 STEMTREE units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$269K
on $1.3M purchase
Total debt
$1.1M
SBA $0.7M + senior + seller note
Overview
About
STEMTREE franchisees operate STEM (Science, Technology, Engineering, Mathematics) education centers, likely delivering after-school programming, summer camps, and skill-building classes to K-12 students. Day-to-day operations include curriculum delivery, student enrollment management, instructor supervision, facility maintenance, and community marketing.
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 · 13 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
STEMTREE presents caution-level risk due to undisclosed profitability data, going concern uncertainty, rapid growth velocity, and thin margin structure relative to investment size.
Score breakdown · what drove the 52 / 100 rating
- 01MINORNo net income disclosure (Item 19) prevents accurate ROI analysis and profitability verification
- 02HIGHGoing Concern status is FALSE — suggests potential financial instability or structural concerns with franchisor
- 03MINORRapid unit growth (33.3% YoY) is atypical for STEM education franchises and may indicate unsustainable expansion or recruitment-driven model
- 04MEDHigh initial investment ($90.7K-$195.3K) relative to disclosed average revenue ($223.7K) yields marginal profit margins before royalties
- 05MINORMinimum royalty of $325/month ($3,900/year) creates breakeven pressure for underperforming locations
- 06MEDOnly 17 total units suggests early-stage system with limited operational track record and stability
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
25 numbers
One-time purchase · CSV download · Validation questions included
FDD download
STEMTREE · FDD (2025) PDF