Bottom line
- Total investment $506K – $673K including a $60K franchise fee.
- Average unit revenue of $712K/year (median $687K). Estimated payback in 2.7 years.
- Rated MODERATE with a risk score of 61/100. SBA loan default rate of 0.0% across 385 loans (below the industry average).
- 81 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
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 LITTLE GYM® unit return on the cash you put in?
Unlevered ROIC · per unit
34%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 THE LITTLE GYM® units return on equity?
Equity IRR · 5-yr
31.8%
3.97× MOIC
Year-1 DSCR
2.54×
EBITDA ÷ debt service
Equity required
$7.0M
on $17.1M purchase
Total debt
$10.1M
SBA $5.0M + senior + seller note
Overview
About
The Little Gym franchisees operate children's fitness facilities (typically ages 4 months-12 years) offering classes in gymnastics, sports skills, dance, and movement activities. Day-to-day operations include instructing multiple class sessions, managing staff, handling parent/customer relations, facility maintenance, and marketing to local families. Revenue is generated through monthly membership fees, class packages, birthday parties, and seasonal camps.
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 · 22 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
The Little Gym presents HIGH RISK due to significant franchisor litigation involving fraud allegations, lack of financial disclosure (no Item 19), slow unit growth, and unresolved going concern questions—requiring extensive validation before investment.
Score breakdown · what drove the 61 / 100 rating
- 01HIGHExtensive litigation history involving franchisor and parent company (Unleashed Brands) with fraud and misrepresentation claims raises credibility and trustworthiness concerns
- 02MINORSlow unit growth (6.9% YoY) with 186 total units suggests market saturation or franchisee satisfaction issues in a children's fitness category
- 03MINORNo Item 19 (Financial Performance Representations) disclosure limits ability to validate the $215k average net income claim independently
- 04HIGHGoing Concern status is FALSE, indicating potential financial instability at franchisor level that could affect support and system viability
- 05MINORHigh royalty floor of $2,500/month ($30k annually) creates significant fixed costs that may exceed 8% royalty for lower-revenue locations
- 06MINORInitial investment of $506k-$673k is substantial for a children's fitness concept with unproven ROI transparency
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 LITTLE GYM® · FDD (2024) PDF