2 document warnings3 things to verifyFranchisor financials: moderate concern
SPENGA — full diligence report
The average SPENGA unit reports $51k/mo in revenue.
Opening one costs $552k–$790k.
DisclosedItem 19 · 44 units reporting · Item 7 · 45 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.
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.
Disclosedstated in this FDDDerivedour calculation from disclosed figuresBenchmarkour industry range, because the FDD does not disclose itInferredAI classification
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
20 locked
Item 7, as the franchisor states it. 20 line items.
Initial Franchise FeeDisclosedItem 7, pp. 15-20Locked
Lease - Security DepositDisclosedItem 7, pp. 15-20 – Locked
Lease Expenses - 3 MonthsDisclosedItem 7, pp. 15-20 – Locked
Leasehold ImprovementsDisclosedItem 7, pp. 15-20 – Locked
Other Equipment, Furniture, Fixtures, and EquipmentDisclosedItem 7, pp. 15-20 – Locked
Grand Opening Marketing Expense and Pre-Opening Activity ExpensesDisclosedItem 7, pp. 15-20 – Locked
SignageDisclosedItem 7, pp. 15-20 – Locked
Computer Hardware and SoftwareDisclosedItem 7, pp. 15-20 – Locked
Opening SuppliesDisclosedItem 7, pp. 15-20 – Locked
InsuranceDisclosedItem 7, pp. 15-20 – Locked
Other Deposits (Utilities, Banks, Alarm, etc.)DisclosedItem 7, pp. 15-20 – Locked
Professional FeesDisclosedItem 7, pp. 15-20 – Locked
Initial Training ExpensesDisclosedItem 7, pp. 15-20 – Locked
Additional Permits, Approvals and QualificationsDisclosedItem 7, pp. 15-20 – Locked
Initial Inventory of Retail ItemsDisclosedItem 7, pp. 15-20 – Locked
Audio Video PackageDisclosedItem 7, pp. 15-20 – Locked
Employee RecruitingDisclosedItem 7, pp. 15-20 – Locked
Construction Design and Review ComplianceDisclosedItem 7, pp. 15-20 – Locked
Additional Funds - 3 MonthsDisclosedItem 7, pp. 15-20 – Locked
Total investmentDisclosedItem 7, pp. 15-20 – Locked
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 — Item 19 top line
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 revenueDerivedLocked
2. − Franchise feesDerivedLocked
3. − Fixed monthly feesDerivedLocked
4. − Rent & occupancyDerivedLocked
5. = Margin after fees & rentDerivedLocked
6. − Cost of goodsDerivedLocked
7. − LaborDerivedLocked
8. − Other operating costsDerivedLocked
9. = Operating EBITDADerivedLocked
10. − Debt serviceDerivedLocked
11. = Cash after debt, before owner drawDerivedLocked
12. Debt-service coverage ratioDerivedLocked
13. Years to recover the build-outDerivedLocked
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
26 locked
26 separate charges in the agreement. Most buyers find four.
11 clauses that change what you signed up for. 2 are rated high.
2 high8 medium1 low
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System scale and turnover
5 locked
Item 20, year-end.
Total unitsDisclosedItem 20, p. 71Locked
OpenedDisclosedItem 20, p. 71Locked
ClosedDisclosedItem 20, p. 71Locked
Changed handsDisclosedItem 20, p. 71Locked
Owner turnoverDerivedLocked
50 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?
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Who runs it
6 locked
6 executives, with tenure and prior operating history.
Chief Executive OfficerExecutive Vice PresidentVice President of OperationsVice President of FitnessVice President of Construction and DevelopmentDirector of Operations