Sample data — illustrative, not for citation
SBA-eligible · directory code S0449 since 2017
Culver's
qsr-burger · Culver Franchising System · est. 1984
Culver's is a quick-service restaurant chain known for its ButterBurgers and frozen custard, served through dine-in and drive-thru. A franchisee builds and operates a freestanding restaurant, managing a full crew serving families and travelers in suburban and small-town markets.
Culver's net unit count grew +21.5% from 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Not enough disclosure
Distress
No verified FDD extraction to judge from. Any figures shown are labelled sample data or independent federal records.
SBA loan defaults
2.2%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 929 | 1,023 | 1,128 |
| Opened | 101 | 112 | 123 |
| Transfers | 30 | 34 | 37 |
| Terminations | 3 | 3 | 4 |
| Non-renewals | 1 | 1 | 1 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 3 | 3 | 3 |
| Outlets at end | 1,023 | 1,128 | 1,243 |
| Net change | +94 | +105 | +115 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 1,017 SBA-backed loans to Culver's franchisees since 1992. Of the 580 that have resolved, 2.2% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
2.2%
13 of 580 resolved defaulted
66.6%
avg. charged-off $ ÷ approved $
1.5%
default rate × loss severity
$1,492,138
what recent franchisees borrowed
78 mo
approval → charge-off, defaulted loans
26 vs 36
distinct banks still lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO CULVER'S BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
Who finances it
Bank Five Nine
21.9% of this brand's loans
Who buys it
61.7%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
−1.5pp
multi-unit vs single-unit owners
Owners of multiple units default at 1.5%; single-unit owners at 3.0%.
Computed from 1,017 SBA 7(a)/504 loans to Culver's franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
To open (Item 7)
$2.3M–$6.5M
all-in investment range
Franchise fee (Item 5)
$55K
upfront, one-time
Royalty (Item 6)
4%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$40K
4% of sales, before profit
Over a 10-yr term
$400K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for Culver's with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 37 wage cases against operators of this system, recovering $35K in back wages for 87 workers, including 30 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
37
Back wages owed
$35K
Employees affected
87
Since 2020
20
30 of these cases involved child-labor violations, covering 432 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual Culver's franchisees — separately owned businesses operating under the brand name — not Culver's itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2025.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
Edwardsville Culver's to Have Extensive Renovations, Closes from July 14 to Reopening on July 19
news:RiverBender.com · 12mo ago
'Deadnamed' | Culver's hit by lawsuit alleging it fired a trans employee who reported harassment
news:HR Grapevine · 21mo ago
news:Advocate.com · 21mo ago
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing Culver's's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →