Bottom line
- Total investment $60K – $1.5M including a $250K franchise fee, 30.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated CAUTION with a risk score of 72/100.
- No Item 19 financial performance representation. Without franchisor-disclosed revenue data, you'll need to gather unit economics directly from existing franchisees.
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 Techstars unit return on the cash you put in?
Unlevered ROIC · per unit
-6%
Negative
Overview
About
Techstars franchisees operate as accelerator program operators or investment fund managers, sourcing early-stage startups, providing mentorship and structured programming, and managing carried interest (profit-sharing from portfolio company exits). Day-to-day activities include founder recruitment, curriculum delivery, investor networking events, and portfolio company support.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 3 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.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Techstars presents HIGH RISK due to active litigation involving executive misconduct, an inactive franchise system (1 unit), opaque unit economics, and a predatory royalty structure with no performance disclosure.
Score breakdown · what drove the 72 / 100 rating
- 01HIGHLitigation involving key executive (CIO Andrew Cleland) alleging breach of fiduciary duty and fraud raises governance and integrity concerns
- 02MEDExtreme royalty structure (30% of carried interest + 15-30% sponsorship revenue) creates unusually high cost burden with no disclosed average revenue to assess viability
- 03MINOROnly 1 franchisee unit with unknown growth trajectory suggests failed or stalled franchise system expansion
- 04MEDNo disclosed average revenue or net income makes it impossible to validate ROI on $250,000 franchise fee + $60,000-$1.535M investment
- 05MINOR4-year term is unusually short and suggests parent company uncertainty or high franchisee turnover
- 06MINORUnprotected territory means direct competition from other Techstars franchisees or corporate operations in same market
- 07MINORNo Item 19 financial performance representations indicates either no franchisees or unwillingness to disclose unit economics
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
14 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Techstars · FDD (2025) PDF