Varsity Zone
Bottom line
- Total investment $204K – $269K including a $60K franchise fee.
- Average unit revenue of $1.4M/year.
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
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 Varsity Zone unit return on the cash you put in?
Unlevered ROIC · per unit
52%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Varsity Zone units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$828K
on $4.1M purchase
Total debt
$3.3M
SBA $2.1M + senior + seller note
Overview
About
Varsity Zone appears to operate youth sports training, athletic development, or sports facility franchises. Franchisees likely manage day-to-day operations including coaching/training services, facility management, member/client scheduling, and local marketing to generate the $1.38M average revenue reported.
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 · 16 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
Micro-franchise system with pending fraud litigation, undisclosed profitability, going concern status, and governance disputes creates substantial operational and financial risk despite protected territory and reasonable initial investment.
Score breakdown · what drove the 60 / 100 rating
- 01MINOROnly 6 units system-wide with unknown growth trajectory suggests minimal scale and market validation
- 02HIGHActive litigation including fraud allegations against affiliate and governance disputes at parent company level indicates serious legal/operational instability
- 03MEDNet income not disclosed in FDD despite $1.38M average revenue — lack of profitability transparency is a major red flag
- 04HIGHGoing concern notation combined with pending arbitration over ownership disputes suggests potential financial or structural viability issues
- 05MEDTiered royalty structure with $500/month minimum means early-stage franchisees may pay 5-6% effective rate on thin margins with no disclosed profit data
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
18 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Varsity Zone · FDD (2025) PDF