Terrace Up
Bottom line
- Total investment $186K – $356K including a $60K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $2.2M/year. Estimated payback in 0.5 years.
- Rated MODERATE with a risk score of 60/100.
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
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 Terrace Up unit return on the cash you put in?
Unlevered ROIC · per unit
69%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Terrace Up units return on equity?
Equity IRR · 5-yr
41.0%
5.57× MOIC
Year-1 DSCR
2.09×
EBITDA ÷ debt service
Equity required
$3.3M
on $11.9M purchase
Total debt
$8.6M
SBA $5.0M + senior + seller note
Overview
About
Terrace Up franchisees operate a restaurant/hospitality venue with an outdoor terrace or elevated dining concept, managing daily food/beverage service, staff, inventory, and customer experience. Revenue modeling suggests full-service restaurant operations with estimated $2.16M in gross annual sales at maturity.
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
Terrace Up presents caution-level risk: a single-unit franchise system with unproven scalability, unprotected territory, and financial claims unsupported by multi-unit franchisee data.
Score breakdown · what drove the 60 / 100 rating
- 01MINOROnly 1 unit in system with unknown growth trajectory—insufficient data to validate model scalability or franchisee success rates
- 02MINORNo protected territory creates direct competition risk and limits franchisee exclusivity
- 03MINORHigh initial investment range ($186K-$356K) relative to single-unit validation and early-stage system maturity
- 04MINORSignificant gap between average net income ($562K) and typical franchisee experience unclear—may reflect outlier performance
- 05MINOR7-year term is relatively short for franchise relationship and capital recovery timeline
- 06MINORNo Item 19 financial performance representations provided to independent franchisees
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
4 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Terrace Up · FDD (2026) PDF