Bottom line
- Total investment $299K – $532K including a $39K franchise fee.
- Average unit revenue of $543K/year (median $487K).
- Rated STRONG with a risk score of 46/100. SBA loan default rate of 0.0% across 62 loans (below the industry average).
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 Spice & Tea Exchange unit return on the cash you put in?
Unlevered ROIC · per unit
19%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 The Spice & Tea Exchange units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$977K
on $4.9M purchase
Total debt
$3.9M
SBA $2.4M + senior + seller note
Overview
About
Franchisees operate retail storefronts selling premium loose-leaf teas, spices, and related accessories. Day-to-day operations include inventory management, customer service, product curation, and local marketing. Most locations are in malls or lifestyle centers targeting gift-buyers and specialty food enthusiasts.
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 · 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.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Specialty tea and spice retailer with adequate revenue but undisclosed profitability, minimal unit growth, and high fixed royalty minimums creates moderate-to-caution risk profile dependent on location quality.
Score breakdown · what drove the 46 / 100 rating
- 01MEDNet income not disclosed in Item 19 — impossible to assess actual profitability despite $542,747 average revenue
- 02MINORSlow unit growth of only 4.5% YoY with 94 total units suggests mature/stalling system in specialty retail
- 03MINORHigh royalty floor of $1,750/month ($21,000/year) creates cash drain risk for underperforming locations
- 04MEDTotal investment range ($298k-$532k) is substantial for a specialty food retail concept with no disclosed profit benchmarks
- 05MINORFranchise fee of $38,750 is steep relative to transparent earnings data — suggests reliance on franchise fees vs. franchisee success
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
15 numbers
One-time purchase · CSV download · Validation questions included
FDD download
The Spice & Tea Exchange · FDD (2025) PDF