3 things to verifyFranchisor financials: high concern

The Back Nine — full diligence report

The average The Back Nine unit reports $20k/mo in revenue.

Opening one costs $307k–$734k.

DisclosedItem 19 · 45 units reporting · Item 7 · 124 open units · 2026 FDD

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.

14 sections · 119 cited figures · 3 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

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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

14 locked

Item 7, as the franchisor states it. 14 line items.

Initial Franchise FeeDisclosedItem 7, pp. 15-16Locked

Travel expenses while trainingDisclosedItem 7, pp. 15-16Locked

Real Estate ImprovementsDisclosedItem 7, pp. 15-16Locked

SignageDisclosedItem 7, pp. 15-16Locked

EquipmentDisclosedItem 7, pp. 15-16Locked

Miscellaneous SuppliesDisclosedItem 7, pp. 15-16Locked

Initial Supply of Advertising MaterialsDisclosedItem 7, pp. 15-16Locked

Marketing Launch Ad SpendDisclosedItem 7, pp. 15-16Locked

Premises DepositDisclosedItem 7, pp. 15-16Locked

FurnitureDisclosedItem 7, pp. 15-16Locked

Business Licenses and PermitsDisclosedItem 7, pp. 15-16Locked

Professional FeesDisclosedItem 7, pp. 15-16Locked

Security/AutomationDisclosedItem 7, pp. 15-16Locked

Utility DepositsDisclosedItem 7, pp. 15-16Locked

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 — Middle 60% Average (Open 6+ Months)

13 locked

13 rungs, monthly, from disclosed revenue down to what the operator actually keeps. Every rung is labeled 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

The operator has not been paid out of this yet.

12. Debt-service coverage ratioBenchmarkLocked

Lenders typically want 1.25 or better: $1.25 of operating profit for every $1.00 of loan payment.

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

7 locked

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

Royalty FeeDisclosedItem 6Locked

Local Advertising RequirementDisclosedItem 6Locked

Marketing System FeeDisclosedItem 6Locked

Internal Systems FeeDisclosedItem 6Locked

Full Swing Simulator Software Annual Software & Maintenance FeeDisclosedItem 6Locked

Internal Systems Fee IncreaseDisclosedItem 6Locked

Marketing System Fee IncreaseDisclosedItem 6Locked

What units actually make

6 locked

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

Top 10% Average (Open 6+ Months)DisclosedItem 19, pp. 36-37Locked

Middle 60% Average (Open 6+ Months)DisclosedItem 19, pp. 36-37Locked

Bottom 30% Average (Open 6+ Months)DisclosedItem 19, pp. 36-37Locked

Network Average (Open 6+ Months)DisclosedItem 19, pp. 36-37Locked

Network averageDisclosedItem 19, pp. 36-37Locked

Units reportedDisclosedItem 19, pp. 36-37Locked

What we found in the document

0 locked

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

Item 1Item 5Item 6Item 7Item 11Item 12Item 17Item 19Item 20Item 21

Before you commit

3 locked

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

The fee stackOperational tripwiresFranchisor financial condition

Locked finding

Franchisor financial condition

8 locked

8 findings from the audited statements.

1 high

Locked finding

Operational tripwires

3 locked

3 clauses that change what you signed up for. 1 is rated high.

1 high2 medium

Locked finding

System scale and turnover

5 locked

Item 20, year-end.

Item 20's own outlet table does not close: the outlets the franchisor states were open at the start of the year, plus the year's openings, less the year's closures, do not come to the year-end count in the same table. One of those four figures is wrong, or Table 3 breaks closures out in a column this reading missed. Ask the franchisor to walk you from Table 1 to Table 3 before you rely on any turnover figure — the one on this page or the one in the document.

Total unitsDisclosedItem 20, pp. 38-41Locked

OpenedDisclosedItem 20, pp. 38-41Locked

ClosedDisclosedItem 20, pp. 38-41Locked

Changed handsDisclosedItem 20, pp. 38-41Locked

Owner turnoverDerivedLocked

27 outlets were open at the start of the year, as Item 20 Table 1 discloses. Every rate below is a share of that starting count, not of today's.

Leaving — renewal, exit and transfer

30 locked

Item 17, counted rather than characterised. 18 terms the table states, across how long you are in, how it ends, how you sell it and what happens after — plus the grounds it gives each side to end the agreement, and 12 questions to take to a franchisee.

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

Initial termDisclosedItem 17, pp. 31-35Locked

RenewalDisclosedLocked

Longest possible holdDisclosedLocked

Cost to renewDisclosedLocked

Renewal is on the then-current agreementDisclosedLocked

Franchisor may terminate without causeDisclosedLocked

Defaults you can cureDisclosedLocked

Defaults you cannot cureDisclosedLocked

Franchisor approval required to transferDisclosedLocked

Conditions for approvalDisclosedLocked

Right of first refusalDisclosedLocked

On death or disabilityDisclosedLocked

Non-compete after you leaveDisclosedLocked

RadiusDisclosedLocked

Non-compete while you are inDisclosedLocked

How disputes are resolvedDisclosedLocked

WhereDisclosedLocked

Under which state's lawDisclosedLocked

Locked finding

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

3 locked

3 executives, with tenure and prior operating history.

Founder & CEOCOODirector of Franchise Sales

Locked finding

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