Bottom line
- Total investment $847K – $1.4M including a $100K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $1.0M/year. Estimated payback in 6.9 years.
- Rated MODERATE with a risk score of 57/100. SBA loan default rate of 0.0% across 20 loans (below the industry average).
- Emerging franchise — only 2 years of franchising with 8 units. Early-stage systems carry higher risk but may offer better territory availability.
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 Town Square 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 Town Square units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.7M
on $8.3M purchase
Total debt
$6.7M
SBA $4.2M + senior + seller note
Overview
About
Town Square operates as a [retail/service/experience venue] model where franchisees manage day-to-day operations including customer service, inventory/scheduling, staff management, and local marketing within their protected territory. Franchisees are responsible for executing brand standards while generating revenue to cover the 7% royalty, operating expenses, and debt service on the substantial upfront capital investment.
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 · 23 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
Early-stage, micro-system (8 units) with undisclosed franchisor financial distress, unvalidated unit economics, and net margins that may not support the 7% royalty burden.
Score breakdown · what drove the 57 / 100 rating
- 01HIGHGoing Concern warning indicates financial instability at franchisor level despite franchise fee revenue
- 02MINOROnly 8 units with 40% YoY growth suggests very early/unproven system (could be volatile)
- 03MINORNet income of $161,949 on $1.04M revenue yields ~15.5% net margin—below typical retail/service benchmarks and concerning given 7% royalty burden
- 04MINORNo Item 19 financial performance representation limits ability to validate claimed average revenue figures
- 05MINORHigh initial investment ($847K-$1.39M) relative to small franchise base creates liquidity and support risk
- 06MINORSpread between low and high investment range suggests high variance in unit economics or unclear startup costs
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
29 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Town Square · FDD (2024) PDF