2 document warnings1 thing to verifyFranchisor financials: moderate concern

Five Star Bath Solutions — full diligence report

The average Five Star Bath Solutions unit reports $162k/mo in revenue.

Opening one costs $162k–$334k.

DisclosedItem 19 · 62 units reporting · Item 7 · 348 open units

Both figures are the franchisor’s own, straight out of the disclosure document. What is masked below is the rest of the analysis — and the capital check that follows measures your cash against that opening range.

13 sections · 113 cited figures · 10 operational tripwires · 14 diligence questions

Everything below is in the report. Every figure is cited to an FDD Item and page, and labelled with where the number came from. The labels are free. The numbers are what you are buying.

Franchise Edge automates franchise diligence. We read the franchisor’s own Franchise Disclosure Document — the filing a franchisor is legally required to hand you at least 14 days before you sign anything or pay anything — and run the work that takes a buyer weeks by hand: every disclosed cost, the unit economics behind the headline, the full fee stack, and what happened to the units that opened before you.

Your analysis is ready. The framework is below — every section, every cited figure, every question, exactly as it appears in the report.

New to FDDs? Here is what is in one

An FDD runs to 23 numbered Items and a few hundred pages. Four of them do most of the work in this report:

Item 7— what it costs to open, low to high. That is the range above, and it is the franchisor’s own estimate.
Item 19 — what units actually earn. A franchisor is not required to publish one at all; when it is missing, or when it reports profit where you expected revenue, that is itself a finding.
Item 20 — openings, closures, transfers and terminations, year by year. This is where churn shows up, and where a growth story either holds or does not.
Item 6 — the ongoing fees. Royalty and ad fund get quoted on a discovery call; the rest of the list usually does not.

Every figure in the report is cited to its Item and page, so you can check any of it against the document yourself.

Questions before you buy? jason@foundersplinko.com — a person, not a ticket queue.

Disclosedstated in this FDDDerivedour calculation from disclosed figuresBenchmarkour industry range, because the FDD does not disclose itInferredAI classification

Capital available

Drag to enter the capital you have available.

Against the total investment the franchisor discloses in Item 7. What it means for your loan, your coverage ratio and your payback is locked.

What it costs to open

16 locked

Item 7, as the franchisor states it. 16 line items.

Initial Franchise FeeDisclosedItem 7, pp. 26-27Locked

Quick Start Package (QSP)DisclosedItem 7, pp. 26-27Locked

Optional QSP Add-on: TrailerDisclosedItem 7, pp. 26-27Locked

Annual Conference Registration DepositDisclosedItem 7, pp. 26-27Locked

MarketingDisclosedItem 7, pp. 26-27Locked

Business Licenses and PermitsDisclosedItem 7, pp. 26-27Locked

Warehouse/Premises and Show DisplaysDisclosedItem 7, pp. 26-27Locked

Supplies, Inventory, and EquipmentDisclosedItem 7, pp. 26-27Locked

Computer Equipment and Software/License FeesDisclosedItem 7, pp. 26-27Locked

Travel and Living Expenses to Attend TrainingDisclosedItem 7, pp. 26-27Locked

Vehicle/Trailer (and wrap)DisclosedItem 7, pp. 26-27Locked

InsuranceDisclosedItem 7, pp. 26-27Locked

Professional ServicesDisclosedItem 7, pp. 26-27Locked

Recruiting and PersonnelDisclosedItem 7, pp. 26-27Locked

Working Capital (Additional Funds and Living Expenses – 3 Months)DisclosedItem 7, pp. 26-27Locked

Total investmentDisclosedItem 7, pp. 26-27Locked

Buyer-fit underwriting

5 locked

What the deal asks of you, against what you told us you have.

Capital gapDerivedLocked

Loan neededDerivedLocked

Net worth requirementDisclosedItem 5Locked

Liquid capital requirementDisclosedItem 5Locked

Margin after fees, rent and debtDerivedLocked

The cash ladder — Network Average

13 locked

13 rungs, monthly, from disclosed revenue down to what the operator actually keeps. Every rung is labelled with where its number came from.

1. Gross revenueDisclosedLocked

2. − Franchise feesDisclosedLocked

3. − Fixed monthly feesDisclosedLocked

4. − Rent & occupancyDisclosedLocked

5. = Margin after fees & rentDerivedLocked

Not profit. Cost of goods, labor and operating costs have not been subtracted yet.

6. − Cost of goodsBenchmarkLocked

7. − LaborBenchmarkLocked

8. − Other operating costsBenchmarkLocked

9. = Operating EBITDABenchmarkLocked

Before debt service, owner compensation, depreciation and taxes.

10. − Debt serviceDerivedLocked

11. = Cash after debt, before owner drawBenchmarkLocked

All cash, so this is rung 9 unchanged. The operator has not been paid out of this yet.

12. Debt-service coverage ratioDerivedLocked

13. Years to recover the build-outBenchmarkLocked

Recovery of the build-out only. It does not include the operator's own time.

How you pay for it

9 locked

The loan this unit would need, and whether the unit can carry it.

Loan amountDerivedLocked

RateBenchmarkLocked

TermBenchmarkLocked

Monthly paymentDerivedLocked

Cash you put inDerivedLocked

Cash after debtDerivedLocked

Return on your cashDerivedLocked

Debt-service coverage ratioDerivedLocked

What this unit could supportDerivedLocked

Ongoing fees and hidden costs

15 locked

15 separate charges in the agreement. Most buyers find four.

RoyaltyDisclosedItem 6Locked

Brand fundDisclosedItem 6Locked

Local advertisingDisclosedItem 6Locked

Call Center Monthly FeeDisclosedItem 6Locked

Operations Software Monthly Support FeeDisclosedItem 6Locked

Call Center Per-Minute FeeDisclosedItem 6Locked

Text/Chat Conversation FeeDisclosedItem 6Locked

Annual Convention and Trade Show FeeDisclosedItem 6Locked

Territory Marketing Requirement (10% of Gross Revenue)DisclosedItem 6Locked

Minimum Monthly Royalty (3+ Years)DisclosedItem 6Locked

Minimum Monthly Marketing Fee (3+ Years)DisclosedItem 6Locked

Non-Reporting FeeDisclosedItem 6Locked

Warranty Escrow on TransferDisclosedItem 6Locked

Transferee CommissionDisclosedItem 6Locked

Mandatory Monthly Marketing Spend, Phased In By Month ThreeDisclosedItem 6Locked

What units actually make

12 locked

The franchisor's own numbers, and how wide the spread really is.

All Non-Company-Controlled Franchisees - 2025 Full YearDisclosedItem 19, pp. 57-65Locked

First Full Year Franchisees (12-24 months) - All Locations 2025DisclosedItem 19, pp. 57-65Locked

First Full Year Franchisees (12-24 months) - 1-Location Owners 2025DisclosedItem 19, pp. 57-65Locked

First Full Year Franchisees (12-24 months) - Multi-Location Owners 2025DisclosedItem 19, pp. 57-65Locked

Established Franchisees (25-36 months) - All Locations 2025DisclosedItem 19, pp. 57-65Locked

Established Franchisees (25-36 months) - 1-Location Owners 2025DisclosedItem 19, pp. 57-65Locked

Established Franchisees (25-36 months) - Multi-Location Owners 2025DisclosedItem 19, pp. 57-65Locked

Mature Franchisees (37+ months) - Non-Company-Controlled 2025DisclosedItem 19, pp. 57-65Locked

Mature Franchisees (37+ months) - 1-Location Owners 2025DisclosedItem 19, pp. 57-65Locked

Mature Franchisees (37+ months) - Multi-Location Owners 2025DisclosedItem 19, pp. 57-65Locked

Network averageDisclosedItem 19, pp. 57-65Locked

Units reportedDisclosedItem 19, pp. 57-65Locked

What we found in the document

0 locked

23 Items located and parsed. Every figure above cites one of them.

Item 1Item 2Item 3Item 4Item 5Item 6Item 7Item 8Item 9Item 10Item 11Item 12Item 13Item 14Item 15Item 16Item 17Item 18Item 19Item 20Item 21Item 22Item 23

Before you commit

1 locked

1 things this document cannot settle, and how to settle them.

Operational tripwires

Locked finding

Franchisor financial condition

10 locked

10 findings from the audited statements.

1 medium

Locked finding

Operational tripwires

10 locked

10 clauses that change what you signed up for. 3 are rated high.

3 high7 medium

Locked finding

System scale and turnover

5 locked

Item 20, year-end.

Total unitsDisclosedItem 20, p. 66Locked

OpenedDisclosedItem 20, p. 66Locked

ClosedDisclosedItem 20, p. 66Locked

Changed handsDisclosedItem 20, p. 66Locked

Owner turnoverDerivedLocked

303 outlets is this record's reconstruction of the starting count, worked back from the year-end total and the year's openings and closures rather than read from Item 20 Table 1. Every rate below is a share of that starting count, not of today's. Check the reconstruction against Table 1 in your own copy.

Leaving — renewal, exit and transfer

Not yet read for this brand

Item 17 — how long you are in, what ends the agreement, what it takes to sell the business, and what you are still bound by after you leave.

How long you are inHow it endsHow you sell itWhat happens after

Who to call, and what to ask

13 locked

14 questions, grouped for operators running a unit today, operators who left last year, placing whoever answers the phone.

What do you actually run for cost of goods, as a percent of sales?

Locked finding

Who runs it

4 locked

4 executives, with tenure and prior operating history.

Brand PresidentChief Revenue OfficerChief Growth OfficerVice President of Operations

Locked finding

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