Town SquareFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Town Square franchise requires a total initial investment of $847K – $1.4M, including a $100K franchise fee and an ongoing 7.0% royalty[2]. Per the 2024 FDD, average unit revenue was $1.0M[2]. SBA 7(a) loans show a 0.0% charge-off rate across 10 loans[1]. Verdict grade: B. Run a live ROI scan →
Data last verified June 16, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $847K – $1.4M
- 64th pct Education
- Avg gross sales
- $1.0M
- 35th pct Education
- Royalty
- 7.0%
- 17th pct Education
- Units
- 8
- 22nd pct Education
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Education · color = vs category peers
Green = >15% above Education avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Only 0.0% of 10 SBA loans charged off, well below the 16% franchise average.
Started franchising in 2024. Newer systems carry more uncertainty but may offer better territories.
Bottom line
- Total investment $847K – $1.4M including a $100K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $1.0M/year, with an estimated 15% cash-on-cash return (based on P&L Bottom Line).
- Verdict B (Above Average) with a risk score of 59/100. SBA loan charge-off rate of 0.0% across 10 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Revenue data based on only 1 reporting unit. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Town Square Franchising LLC
- Parent company
- SH Town Square Franchising, Inc.
- Incorporated in
- DE
- HQ
- 9708 Belair Road, Perry Hall, Maryland 21236
- Auditor
- Citrin Cooperman & Company, LLP
- Audited financials
Affiliated brands
- of ours
Other brands the franchisor or its parent operates (Item 1).
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.
- CEO
- Peter Ross
- Headquarters
- MD
- Founded
- 2023
- FDD year
- 2024
- States available
- 5
FDD Item 7 · 2024 filing · 16 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $100K | $100K | |
| Travel and Living Expenses While Training | $2K | $7K | |
| Lease, Utility, and Security Deposits | $30K | $60K | |
| Building Permit | $2K | $30K | |
| Construction | $500K | $800K | |
| Signage | $10K | $22K | |
| Furniture & Fixtures and Equipment (including Computer System) | $35K | $64K | |
| Supplies | $10K | $20K | |
| Grand Opening and Initial Advertising | $10K | $20K | |
| Business Licenses | $1K | $4K | |
| Legal/Professional Fees | $30K | $46K | |
| Insurance | $13K | $25K | |
| Recruitment | $5K | $15K | |
| Additional Funds (3 months) | $50K | $100K | |
| Project Management Fee | $25K | $25K | |
| Architecture Design | $25K | $50K | |
| Total initial investment | $847K | $1.4M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$156K
15.0% margin
Unlevered ROIC
13%
EBITDA / total invested capital
Payback
7.6 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $847K – $1.4M
- Near category avg vs category
- Liquid capital req'd
- $50K – $100K
- Near category avg vs category
- Franchise fee
- $100K – $100K
- Below avg, review vs category
- Royalty
- 7.0%
- Gross Sales · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
- Payback period
- 6.9 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 7.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $500 |
| Transfer fee | $25K |
| Inventory (initial) | $10K – $20K |
| Total fee load | 8.0% of rev |
Financial Performance
- Avg gross sales
- $1.0M
- Per unit, per year
- Median gross sales
- N/A
- Avg p&l bottom line
- $162K
- Reported as P&L Bottom Line in FDD Item 19
- Cash-on-cash
- 14.5%
- Based on P&L Bottom Line / investment midpoint
- Item 19 type
- Historical and Estimated
- Sample size
- 1 units
- vs category median 14 · small
- Transparency tier
- revenue_only
- Categorical assessment of disclosure depth
- Transparency
- 9 / 5
- vs category median 4 / 5 · above
Compared against 237 Education brands
Revenue is only 0.9x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
vs Education averages
How Town Square Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 8
- Opened
- 2
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 88%
- vs corporate-owned
- Multi-unit owners
- 9.1%
- Net growth (yr3)
- +40.0%
- Net unit change last year
3-year detail · Item 20
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 11
- Franchisor's next-year forecast
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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 10
- Loan volume
- $21.0M
- Median loan
- $2.1M
- average
- Charge-off rate
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 7
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
With a 0.0% charge-off rate across 10 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
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.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Largest disclosed settlement: $200,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Citrin Cooperman & Company, LLP
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 59 / 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
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Circular boundary |
| Protected territory | Yes |
| Territory radius | 3 mi |
| Territory population | 25,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Maryland |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 123 hrs
- On-the-job training
- 0 hrs
- Site selection
- joint
- Franchisor financing
- Offered
- Item 10
- POS system
- XCITE!
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: XCITE!
Item 20 · call current owners
Franchisee Contacts
29 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Town Square · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Town Square franchise?
The total investment to open a Town Square franchise ranges from $847K – $1.4M, with an initial franchise fee of $100K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Town Square franchise owners earn?
According to Item 19 of the Town Square FDD, the average gross sales per unit is $1.0M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Town Square's franchise failure rate?
Based on SBA 7(a) loan data, Town Square has a charge-off rate of 0.0% across 10 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Town Square franchise locations are there?
As of their most recent FDD filing, Town Square has 8 total units in the United States, including 1 franchised units and 1 company-owned units. 2 new units were opened in the latest reporting year.
Is Town Square a good franchise to buy?
FranchiseVerdict rates Town Square as a B-grade franchise with a risk score of 59 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.