Sub Station II
Bottom line
- Total investment $318K – $926K including a $20K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $615K/year (median $592K).
- Rated MODERATE with a risk score of 57/100. SBA loan default rate of 0.0% across 16 loans (below the industry average).
- System contracting at -5.9% 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 Sub Station II unit return on the cash you put in?
Unlevered ROIC · per unit
14%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Sub Station II units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$984K
on $4.9M purchase
Total debt
$3.9M
SBA $2.5M + senior + seller note
Overview
About
Sub Station II franchisees operate quick-service submarine sandwich restaurants, managing inventory, food preparation, customer service, and daily P&L. Day-to-day operations include sandwich assembly, order fulfillment, staff management, and maintaining food safety standards in a small-format retail location.
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 · 5 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
Sub Station II presents caution-level risk due to missing profitability data, stagnant unit growth, and unclear franchisor financial health despite reasonable royalty rates and protected territories.
Score breakdown · what drove the 57 / 100 rating
- 01MINORNo Net Income disclosure (Item 19) prevents ROI validation and profitability assessment
- 02MINORMinimal unit growth of 3.2% YoY suggests market saturation or franchisee dissatisfaction
- 03MINORWide investment range ($318K–$926K) indicates inconsistent startup costs and unclear capital requirements
- 04HIGHNo 'Going Concern' statement indicates potential franchisor financial instability
- 05MEDAverage revenue of $614K with undisclosed net income suggests thin margins or hidden losses
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
34 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Sub Station II · FDD (2026) PDF