Bottom line
- Total investment $166K – $1.7M including a $20K franchise fee.
- Average unit revenue of $496K/year (median $456K).
- Rated MODERATE with a risk score of 56/100. SBA loan default rate of 0.0% across 18 loans (below the industry average).
- System contracting at -6.9% 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 Straw Hat Pizza unit return on the cash you put in?
Unlevered ROIC · per unit
6%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Straw Hat Pizza units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$397K
on $2.0M purchase
Total debt
$1.6M
SBA $1.0M + senior + seller note
Overview
About
Franchisees operate casual/quick-service pizza restaurants under the Straw Hat brand, managing kitchen operations, customer service, inventory, staffing, and local marketing. Daily responsibilities include food preparation, order fulfillment, POS management, and vendor relations within assigned (but unprotected) territories.
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.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Small, stagnant franchise system with non-disclosed profitability, unprotected territories, and unclear cost structures creates moderate-to-high execution risk.
Score breakdown · what drove the 56 / 100 rating
- 01MEDNet income not disclosed in Item 19 — unable to validate actual profitability against $165,500–$1,662,000 investment range
- 02MINOROnly 27 units with unknown growth trajectory — suggests stagnant or declining system (mature brands typically have 100+ units)
- 03MINORNo protected territory — franchisees compete directly with other Straw Hat locations and corporate stores
- 04MINORWide investment variance ($165,500–$1,662,000) indicates inconsistent unit economics and unclear cost structure
- 05MINORRoyalty tied to 'Adjusted Gross Sales' (undefined term) — potential for disputes over what counts toward 4% fee
- 06MEDAverage revenue of $496,214 is modest for pizza — suggests below-average unit volumes or limited marketing support
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
10 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Straw Hat Pizza · FDD (2025) PDF