FRANCHISE·WATCH·DESK

Verified — real FDD extraction

Not found in the SBA Franchise Directory under this name — though SBA loans to its franchisees exist; verify eligibility with your lender

BOXDROP

Other · independent · est. —

BoxDrop is a discount mattress and furniture retail concept selling brand-name inventory at reduced prices from low-overhead locations. A franchisee operates a warehouse-style showroom, often by-appointment, buying overstock inventory and selling direct to value-focused consumers.

BOXDROP net unit count declined -25.7% from 20232025 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

Showing strain

Distress

0
STABLE

The disclosed record shows weakness — shrinking units, elevated exits, or churn — worth reading closely before going further.

Exit rate · latest year

40.2%

fiscal 2025, per Item 20

Cost to open

$67K–$202K

Item 7 total investment range

SBA loan defaults

Too few resolved

1 loans exist; too few resolved to rate

Behind the verdict

the record, factor by factor · Item 20

hi-1.0.0
Net unit growth35%

3-yr trend · Item 20 Table 1

Weak
Exit quality25%

terminations + ceased-ops vs. all exits · Table 3

Weak
Transfer / churn15%

transfers vs. base · Table 3

Strong
Promise-keeping10%

actual vs. projected openings · Table 5

Strong
Transparency15%

Item 19 disclosure + completeness

Weak

Systemwide units

2023–2025

-25.7%
171202318620241272025

Survival record

FDD Item 20 · outlet status by year

In fiscal 2025, 74 of 184 franchised outlets left the system — a 40.2% annualized exit rate. Not every exit is a failure — but this is the measurable floor.

Show the outlet tables
Status (FTC)202320242025
Outlets at start158171186
Opened442515
Transfers536
Terminations600
Non-renewals000
Reacquired by franchisor000
Ceased — other reasons251174
Outlets at end171186127
Net change+13+15-59

The lender's view

SBA 7(a)/504 loan performance · FY1991–present

Banks have made 1 SBA-backed loans to BOXDROP franchisees since 2025. Most are still open, so there is not yet a resolved cohort large enough to rate.

Charge-off rate

0 resolved · too thin to rate

Loss given default

avg. charged-off $ ÷ approved $

Expected loss

default rate × loss severity

Avg. loan · FY2020+

$300,000

what recent franchisees borrowed

Median time to default

approval → charge-off, defaulted loans

Lenders · FY21+ vs FY16–20

distinct banks lending

Charge-off rate by loan approval year (%)

SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO BOXDROP BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL

What it costs — and what it drags

FDD Items 5–7 · fees, investment, royalty

Buying in means a $15K franchise fee (Item 5) and a total investment of $67K–$202K (Item 7). The franchisor publishes no earnings claim (Item 19) — ask current and former franchisees for real numbers.

To open (Item 7)

$67K–$202K

all-in investment range

Franchise fee (Item 5)

$15K

upfront, one-time

Royalty (Item 6)

of sales, ongoing

If a unit does this in annual sales…$1M/yr

Your figure — this brand discloses no Item 19 earnings; validate with current & former owners.

Royalty you'd pay / yr

$0

0% of sales, before profit

Over a 10-yr term

$0

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 BOXDROP with an independent CPA

Distress signals

news-sourced · bankruptcies, closures, lawsuits

No recent closures, bankruptcies, or major lawsuits found in the news for BOXDROP. That's a good sign — but it reflects news coverage, not a guarantee.

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A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing BOXDROP's numbers, including talking you out of a bad deal.

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BOXDROP franchise questions, answered from the filings

What percentage of BOXDROP franchises closed last year?

In BOXDROP's latest FDD Item 20 (fiscal 2025), 74 of 184 franchised outlets left the system — an annualized exit rate of 40.2%. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.

How much does a BOXDROP franchise cost?

Per BOXDROP's 2026 FDD, buying in requires an initial franchise fee of $15K (Item 5) and a total initial investment of $67K–$202K (Item 7).

Does BOXDROP disclose earnings (Item 19)?

No — BOXDROP's 2026 FDD makes no financial performance representation in Item 19. That is legal and common, but it means the franchisor publishes no earnings claim; ask current franchisees for real numbers.

Is BOXDROP a good franchise to buy? Health score, exit rate & costs (2026) · Franchise Watch Desk