Bottom line
- Total investment $221K – $1.6M including a $35K franchise fee, 4.5% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated CAUTION with a risk score of 75/100.
- 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 The Red Collection unit return on the cash you put in?
Unlevered ROIC · per unit
9%
Below typical band (30–60%)
Overview
About
The Red Collection operates boutique hospitality properties (likely upscale hotel or vacation rental properties based on 'Gross Room Revenues' metric). Franchisees manage day-to-day operations including guest services, housekeeping, maintenance, marketing, and revenue optimization for branded properties under the franchisor's standards and quality controls.
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 · 7 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
Critical viability concerns: tiny 5-unit system, going concern status, active litigation pattern, zero financial disclosure, and recent collection actions signal systemic operational and financial distress.
Score breakdown · what drove the 75 / 100 rating
- 01HIGHGoing Concern status is FALSE — indicates potential financial instability or operational viability questions at corporate level
- 02MINOROnly 5 units system-wide with unknown/likely stagnant growth — minimal scale and no evidence of expansion momentum
- 03MINORThree active legal disputes (1 pending breach/tortious interference, 2 collection actions in 2024) plus concluded Maryland franchise registration violations — pattern of compliance and relationship issues
- 04MEDZero financial transparency — no Item 19 average revenue or net income disclosed, making ROI analysis impossible
- 05MEDHigh investment range ($220K–$1.57M) combined with 4.5% royalty with no performance benchmarks or disclosed unit economics
- 06MINORRecent collection actions by affiliate against franchisees in 2024 suggest cash flow stress among operators and potential franchisor financial pressure
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
11 numbers
One-time purchase · CSV download · Validation questions included
FDD download
The Red Collection · FDD (2025) PDF