We cross-reference FDD claims with 89,609 real SBA 7(a) loan outcomes across 5,461 franchise brands. No other FDD tool does this.
The Problem
Franchise Disclosure Documents are written by franchisors and their attorneys. Item 19 — the financial performance section — is entirely optional. When disclosed, there's no independent verification.
Half of all franchisors choose not to disclose any financial performance data. You're asked to invest $200K+ with zero earnings information.
When Item 19 is disclosed, franchisors choose what to include. They can cherry-pick top performers, exclude closed units, and present favorable averages.
The FTC Franchise Rule requires disclosure, not accuracy. Item 21 financial statements show franchisor health — not franchisee unit economics.
Our Data
We analyze actual SBA 7(a) loan data published by the U.S. Small Business Administration — the same loans franchise buyers use to fund their investments. Default rates don't lie.
Track the percentage of SBA 7(a) loans that went into default for each franchise system. Compare against the ~8% national average.
See average and median loan sizes by brand. A system requiring $500K+ loans suggests higher investment risk and longer payback periods.
Track whether SBA approvals for a brand are increasing or declining year-over-year. Declining approvals often precede broader system contraction.
15+ years of loan data captures full economic cycles — including 2008 recovery, COVID disruptions, and current inflationary environment.
Live Examples
Here's what our SBA dataset reveals about four well-known franchises. Every FranchiseIQ report includes this level of detail.
FDD says: FDD shows declining unit count — network shrunk by 6,000+ locations since 2015.
FDD says: FDD confirms strongest unit economics in QSR. Average unit volume exceeds $8M.
FDD says: Strong SBA performance despite high initial investment ($970K–$4.2M). Recurring revenue model reduces default risk.
FDD says: 0% default rate on 47 loans. Rapid expansion with clean loan performance — though early-stage data should be monitored.
Data reflects SBA 7(a) loan outcomes from 2010–2024. Default rates are calculated as loans charged off ÷ total approved.
How We Use This
FranchiseIQ doesn't just extract your FDD. We interrogate it. Every report includes a dedicated SBA Intelligence section that surfaces what the franchisor's document conveniently omits.
"Item 19 shows average gross sales of $850,000 per unit."
But 12.3% of SBA borrowers in this system defaulted — 1.5× the national average. Actual cash flow may not support debt service.
"Franchisor omits Item 19 entirely — no financial performance data disclosed."
SBA data shows 187 loans approved since 2015, with a 9.6% default rate. Above the 8% national average — warrants Item 20 franchisee interviews.
"FDD reports 400 new unit openings last year, 98% renewal rate."
SBA data corroborates: 1.8% default rate on 892 loans since 2018. Consistent with strong unit economics. Data aligned.
Every FranchiseIQ report includes the full SBA Intelligence section. Upload your FDD and see what the data reveals.