2 document warnings4 things to verifyFranchisor financials: high concern

The Original Rainbow Cone — full diligence report

The average The Original Rainbow Cone unit reports $21k/mo in revenue.

Opening one costs $209k–$5.0M.

DisclosedItem 19 · 26 units reporting · Item 7 · 27 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 · 137 cited figures · 9 operational tripwires · 10 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
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

55 locked

Item 7, as the franchisor states it. 55 line items.

Initial Franchise Fee — Free Standing / In-LineDisclosedItem 7, pp. 16-31Locked
Initial Franchise Fee — ExpressDisclosedItem 7, pp. 16-31Locked
Land Acquisition (Free Standing Ground-Up)DisclosedItem 7, pp. 16-31Locked
Site Work (Free Standing Ground-Up)DisclosedItem 7, pp. 16-31Locked
Construction of Building (Free Standing Ground-Up)DisclosedItem 7, pp. 16-31Locked
Design and Architect Fees — Free Standing LeasedDisclosedItem 7, pp. 16-31Locked
Design and Architect Fees — In-LineDisclosedItem 7, pp. 16-31Locked
Design and Architect Fees — ExpressDisclosedItem 7, pp. 16-31Locked
Lease, Utility and Security Deposits — Free Standing LeasedDisclosedItem 7, pp. 16-31Locked
Lease, Utility and Security Deposits — In-LineDisclosedItem 7, pp. 16-31Locked
Lease, Utility and Security Deposits — ExpressDisclosedItem 7, pp. 16-31Locked
Lease Rental Payments – First 3 Months — Free Standing LeasedDisclosedItem 7, pp. 16-31Locked
Lease Rental Payments – First 3 Months — In-LineDisclosedItem 7, pp. 16-31Locked
Lease Rental Payments – First 3 Months — ExpressDisclosedItem 7, pp. 16-31Locked
Leasehold Improvements — Free Standing LeasedDisclosedItem 7, pp. 16-31Locked
Leasehold Improvements — In-LineDisclosedItem 7, pp. 16-31Locked
Leasehold Improvements — ExpressDisclosedItem 7, pp. 16-31Locked
Travel and Living Costs While Training — Free Standing Ground-UpDisclosedItem 7, pp. 16-31Locked
Travel and Living Costs While Training — Free Standing LeasedDisclosedItem 7, pp. 16-31Locked
Travel and Living Costs While Training — In-LineDisclosedItem 7, pp. 16-31Locked
Travel and Living Costs While Training — ExpressDisclosedItem 7, pp. 16-31Locked
Initial Inventory and Supplies — Free Standing Ground-UpDisclosedItem 7, pp. 16-31Locked
Initial Inventory and Supplies — Free Standing LeasedDisclosedItem 7, pp. 16-31Locked
Initial Inventory and Supplies — In-LineDisclosedItem 7, pp. 16-31Locked
Initial Inventory and Supplies — ExpressDisclosedItem 7, pp. 16-31Locked
Furniture, Fixtures and Equipment (excl. Sign Package and POS) — Free StandingDisclosedItem 7, pp. 16-31Locked
Furniture, Fixtures and Equipment (excl. Sign Package and POS) — In-LineDisclosedItem 7, pp. 16-31Locked
Furniture, Fixtures and Equipment (excl. Sign Package and POS) — ExpressDisclosedItem 7, pp. 16-31Locked
Sign Package — Free StandingDisclosedItem 7, pp. 16-31Locked
Sign Package — In-LineDisclosedItem 7, pp. 16-31Locked
Sign Package — ExpressDisclosedItem 7, pp. 16-31Locked
POS System — Free StandingDisclosedItem 7, pp. 16-31Locked
POS System — In-LineDisclosedItem 7, pp. 16-31Locked
POS System — ExpressDisclosedItem 7, pp. 16-31Locked
Miscellaneous Expenses — Free StandingDisclosedItem 7, pp. 16-31Locked
Miscellaneous Expenses — In-LineDisclosedItem 7, pp. 16-31Locked
Miscellaneous Expenses — ExpressDisclosedItem 7, pp. 16-31Locked
Grand Opening Advertising and Marketing — Free StandingDisclosedItem 7, pp. 16-31Locked
Grand Opening Advertising and Marketing — In-LineDisclosedItem 7, pp. 16-31Locked
Grand Opening Advertising and Marketing — ExpressDisclosedItem 7, pp. 16-31Locked
On-Site Training Fee — Free StandingDisclosedItem 7, pp. 16-31Locked
On-Site Training Fee — In-LineDisclosedItem 7, pp. 16-31Locked
On-Site Training Fee — ExpressDisclosedItem 7, pp. 16-31Locked
Additional Funds – 3 Months — Free StandingDisclosedItem 7, pp. 16-31Locked
Additional Funds – 3 Months — In-LineDisclosedItem 7, pp. 16-31Locked
Additional Funds – 3 Months — ExpressDisclosedItem 7, pp. 16-31Locked
Food Truck FeeDisclosedItem 7, pp. 16-31Locked
Vehicle Purchase Including Delivery Fees (Food Truck)DisclosedItem 7, pp. 16-31Locked
Outfitting of Truck (Food Truck)DisclosedItem 7, pp. 16-31Locked
Opening Inventory (Food Truck)DisclosedItem 7, pp. 16-31Locked
Insurance (Food Truck)DisclosedItem 7, pp. 16-31Locked
POS System (Food Truck)DisclosedItem 7, pp. 16-31Locked
Professional Fees, Licenses and Permits (Food Truck)DisclosedItem 7, pp. 16-31Locked
Additional Funds – 3 Months (Food Truck)DisclosedItem 7, pp. 16-31Locked
Total investmentDisclosedItem 7, pp. 16-31Locked

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

14 locked

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

RoyaltyDisclosedItem 6Locked
Brand fundDisclosedItem 6Locked
Local advertisingDisclosedItem 6Locked
Technology FeeDisclosedItem 6Locked
Required Software and Applications (Monthly)DisclosedItem 6Locked
PCI DSS ComplianceDisclosedItem 6Locked
POS and Computer System Annual MaintenanceDisclosedItem 6Locked
Mandatory Affiliate Architect/Design Fee (Deposit)DisclosedItem 6Locked
Supplier Rebates to FranchisorDisclosedItem 6Locked
Customer Satisfaction ReimbursementDisclosedItem 6Locked
Non-Compliance FeeDisclosedItem 6Locked
Supplemental / Additional Training FeesDisclosedItem 6Locked
Re-inspection FeeDisclosedItem 6Locked
Mandatory Remodel at RenewalDisclosedItem 6Locked

What units actually make

1 locked

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

Units reportedDisclosedItem 19, pp. 61-71Locked

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

4 locked

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

Disclosures to reviewOperational tripwiresFranchisor financial conditionItem 19 earnings basis
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Franchisor financial condition

7 locked

7 findings from the audited statements.

1 high
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Operational tripwires

9 locked

9 clauses that change what you signed up for. 5 are rated high.

5 high4 medium
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System scale and turnover

5 locked

Item 20, year-end.

Total unitsDisclosedItem 20, pp. 72-74Locked
OpenedDisclosedItem 20, pp. 72-74Locked
ClosedDisclosedItem 20, pp. 72-74Locked
Changed handsDisclosedItem 20, pp. 72-74Locked
Owner turnoverDerivedLocked

27 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

9 locked

10 questions, grouped for operators running a unit today, operators who left last year.

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.

ManagerExecutive Vice PresidentManager and Vice President of Real EstateChief Financial OfficerSenior Vice President of MarketingLearning and Development Manager
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The Original Rainbow Cone Franchise Review (2026): Cost, Item 19 Earnings, Fees — from the actual FDD