Bottom line
- Total investment $1.4M – $4.5M including a $50K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $5.0M/year (median $3.1M).
- Rated CAUTION with a risk score of 70/100. SBA loan default rate of 0.0% across 1 loans (below the industry average).
- 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 TGI Fridays unit return on the cash you put in?
Unlevered ROIC · per unit
24%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 TGI Fridays units return on equity?
Equity IRR · 5-yr
24.3%
2.96× MOIC
Year-1 DSCR
3.53×
EBITDA ÷ debt service
Equity required
$22.7M
on $39.6M purchase
Total debt
$16.9M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate casual dining restaurants serving American cuisine with an emphasis on appetizers, burgers, and beverages. Day-to-day operations include managing 50-150+ staff, controlling food/labor costs in a high-overhead venue, maintaining brand standards across marketing and service, and competing in a declining casual dining sector.
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 · 19 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
TGI Fridays represents a high-risk investment with a collapsing franchise network, going concern warning, and undisclosed profitability metrics despite massive capital requirements.
Score breakdown · what drove the 70 / 100 rating
- 01MEDSevere unit decline of 37.2% year-over-year indicates systemic franchise system collapse
- 02HIGHGoing concern warning suggests parent company financial distress and viability uncertainty
- 03MINORNo net income disclosure combined with $4.9M average revenue raises profitability questions
- 04MINORUnprotected territory creates direct competition risk from other franchisees in same market
- 05MINORHigh investment range ($1.4M-$4.5M) with 4% royalty requires $198K+ annual sales just to break even on fees
- 06MINORDeclining unit count suggests franchisees are not renewing or are exiting the system
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
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
TGI Fridays · FDD (2025) PDF