Bottom line
- Total investment $1.1M – $2.7M including a $35K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.9M/year (median $1.8M).
- Rated CAUTION with a risk score of 72/100. SBA loan default rate of 0.0% across 7 loans (below the industry average).
- 21 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
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 Village Inn unit return on the cash you put in?
Unlevered ROIC · per unit
17%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Village Inn units return on equity?
Equity IRR · 5-yr
29.0%
3.58× MOIC
Year-1 DSCR
2.78×
EBITDA ÷ debt service
Equity required
$9.5M
on $20.8M purchase
Total debt
$11.2M
SBA $5.0M + senior + seller note
Overview
About
Village Inn franchisees operate casual dining restaurants serving breakfast, lunch, and dinner to families and individuals. Day-to-day operations include managing kitchen and front-of-house staff, inventory procurement, food preparation, customer service, and facility maintenance across typically 4,000-6,000 sq ft locations. Franchisees are responsible for local marketing, P&L management, and maintaining brand standards while paying 4.0% royalties on gross sales.
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 · 18 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
Village Inn presents HIGH RISK due to a contracting franchise system (-3.3% YoY), substantial litigation and regulatory history, undisclosed net income figures, and a high capital requirement relative to average unit revenue in a declining casual dining segment.
Score breakdown · what drove the 72 / 100 rating
- 01MEDShrinking franchise system: 114 units with -3.3% YoY decline indicates contracting brand momentum and potential market viability concerns
- 02HIGHExtensive litigation history: Multiple concluded arbitration cases involving breach of contract, misrepresentation, and franchise law violations signal franchisor credibility and governance issues
- 03MINORNo Item 19 financial disclosure: Average Net Income not provided despite $1.89M average revenue — inability or unwillingness to substantiate profitability claims
- 04MINORHigh investment-to-revenue ratio: $1.075M-$2.74M initial investment against $1.89M average revenue creates extended breakeven timeline and capital risk
- 05MINORRegulatory action history: State administrative actions for registration and disclosure violations suggest franchisor compliance problems that may disadvantage franchisees
- 06MINORDeclining unit count: -3.3% YoY contraction raises questions about unit-level economics, franchisee satisfaction, and brand relevance in casual dining market
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
73 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Village Inn · FDD (2025) PDF