How we score, where the data comes from, what we don't know.

• Franchise Disclosure Documents (FDDs)

  Brand-specific filings franchisors must give prospective franchisees under FTC rule 16 CFR 436. Items 1, 3, 5, 6, 7, 11, 12, 17, 19, and 20 are the financial and contract sections we extract. Source PDFs come from state regulator portals (CA, MN, NY, ND, RI, VA, WA, WI, plus NASAA/state-administrator records).

  Coverage · 3,188 FDD-extracted brands · FDD years 2017–2026

• SBA loan disclosures

  Public records released under FOIA, covering Small Business Administration loans guaranteed under the 7(a) and 504 programs. We join these to FDD brand names so you can see real charge-off rates per brand. 3,492 brands have SBA loan history.

  Coverage · 126,612 7(a) loans · 16,915 504 loans · 3,492 brands with lending records

  Charge-off rates are computed against resolved loans (charged off + paid in full), not total originations. Loans still being repaid are excluded from the denominator because their final outcome is unknown. This produces a more accurate picture of actual loss experience but means rates may differ from raw origination-based calculations.

  Sub-program note: 7(a) totals include all sub-programs (Standard 7(a), SBA Express, CAPLines, Export Express, and Community Advantage). SBA Express loans carry a lower guarantee percentage and historically show higher charge-off rates than Standard 7(a). 504 totals include both regular purchase and refinance loans. Lender-level charge-off rates reflect each lender's full portfolio mix across these sub-programs.

  Charge-off rate = charged-off loans / (charged-off + paid in full), cumulative since 2000. Loans still active or in disbursement are excluded from the denominator.

• Brand logos

  Logos are sourced from Google's favicon service using each brand's website domain. Where no favicon exists, a monogram tile renders the brand initials.

How the score is built

Under the hood, the model computes a deterministic internal risk score from 5–100 where lower is better. We invert it for display into the public Verdict Score (0–100, higher is better) shown in the scale above — the two are the same measurement on opposite axes. The steps below describe that internal risk score: it is a deterministic, multi-layer model, so the same data always produces the same score. It blends six independent risk dimensions, then calibrates against real-world loan outcomes and applies hard floors.

Layer 1 — six risk dimensions

Each dimension is scored 0-100 from the FDD data, then combined weakest-link style (a weighted average blended roughly 55/45 with the single worst dimension) so one serious red flag carries weight rather than being averaged away:

• Financial health (~22%): going-concern and audit status, franchisor net income and net worth (Item 21)
• Unit economics (~20%): revenue-to-investment ratio and cash-on-cash return (Items 7 + 19)
• Unit growth (~16%): net unit growth and franchisee turnover (Item 20)
• Scale (~15%): system size and years franchising — a larger, longer-running system is more proven
• Legal (~15%): litigation count and bankruptcy disclosure (Items 3 + 4)
• Transparency (~12%): whether Item 19 earnings are disclosed and financials are audited

Layer 2 — outcome calibration

• SBA 7(a) charge-off rate — the only outcome-validated signal in the model. Low rates on ≥10 loans lower the score; high rates raise it. Requires ≥10 loans for standard tiers, ≥5 for extreme rates.
• FDD staleness — older filings carry more uncertainty and nudge the score up. A 2017 FDD is less certain than a 2025 one.

Layer 3 — hard floors & caps

• SBA hard floor: very high charge-off rates floor the grade regardless of clean FDD language.
• Going-concern cap: an auditor's going-concern doubt caps the letter grade.
• Mega-system representativeness guard: proven 2,000+ unit systems are exempt from mild small-sample floors, so a 24-loan SBA sample doesn't drag down a McDonald's or Papa John's.

The internal risk score is clamped to 5–100 (lower = better) and mapped to a letter grade: A (<54), B (54–62), C (63–69), D (70–77), F (≥78). These are the same grades shown in the scale above, which lists the equivalent public Verdict Score ranges (higher = better) — e.g. an internal risk score below 54 is a Verdict Score of 58–100, both grade A. Approximate weights are shown; exact contribution varies per brand because some signals are absent (e.g. no SBA data means the calibration step is skipped and the dimensions carry the score).

Manual overrides

0 brands have a manually reviewed score override. These are cases where the automated model produces a misleading grade due to data anomalies (e.g., name collisions in SBA matching, unusual FDD structures, or known extraction errors). Each override is documented internally with a justification. We aim to reduce overrides as data quality improves.

SBA-only brands

1,671 brands have SBA 7(a) loan data but no FDD on file. Their Verdict score is based solely on lending outcomes: charge-off rate is the primary signal, with adjustments for loan volume confidence and recent performance trends. These brands are marked “SBA data only” throughout the site.

All financial data is free to browse. There is no subscription. The $49 unlock applies only to the franchisee phone numbers (and AI- generated validation questions) for a single brand. One-time purchase.

• Free: investment ranges, royalty rates, Item 19 revenues, unit growth, SBA charge-off rates, ratings, contract terms, litigation summaries, comparison and matrix views.
• $49 / brand: ~100 franchisee phone numbers from that brand's FDD Item 20, plus AI-generated questions to ask owners during validation calls.

FDDs are filed annually with state regulators. We re-extract a brand when its filing year changes. SBA 7(a) data is refreshed quarterly when SBA publishes new FOIA datasets. The data ticker on the home page reflects the current totals; each brand page stamps the FDD year it was extracted from.