The Coffee Bean & Tea Leaf
Bottom line
- Total investment $532K – $1.4M including a $25K franchise fee, 5.5% ongoing royalty.
- Average unit revenue of $1.3M/year (median $1.2M).
- Rated CAUTION with a risk score of 72/100.
- System contracting at -14.8% 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 The Coffee Bean & Tea Leaf unit return on the cash you put in?
Unlevered ROIC · per unit
13%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 The Coffee Bean & Tea Leaf units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$915K
on $4.6M purchase
Total debt
$3.7M
SBA $2.3M + senior + seller note
Overview
About
Franchisees operate specialty coffee and tea retail locations, preparing beverages, managing point-of-sale operations, and handling inventory. Daily operations include staff management, customer service, maintaining equipment, and executing marketing in a protected territory.
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 · 4 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
Contracting franchise system with active litigation, undisclosed unit economics, and questionable franchisor financial health presents elevated risk for capital-intensive coffee retail investment.
Score breakdown · what drove the 72 / 100 rating
- 01MEDUnit count declined 10.4% YoY (179 units) indicating system contraction and potential franchisee struggles
- 02HIGHMultiple active litigation cases involving deceptive trade practices and misrepresentation — suggests franchisor credibility issues
- 03MEDNet income not disclosed in Item 19 — prevents accurate ROI analysis and may indicate poor franchisee profitability
- 04MINORInvestment range of $531K–$1.43M carries high capital burden relative to average revenue of $1.31M with unknown net margins
- 05MINOR5.5% royalty on gross revenues (not net) combined with declining unit economics suggests margin compression
- 06HIGHNo 'Going Concern' status is false — indicates potential franchisor financial stability concerns
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
The Coffee Bean & Tea Leaf · FDD (2025) PDF