From the filed FDD — automated extraction, check the source
2026 FDD
SBA-eligible · directory code S0448 since 2017
Culligan
Water treatment & softening · parent company: not identified
Culligan is a water treatment company that sells and services water softeners, filtration systems, and drinking-water products for homes and businesses. A franchisee runs a local dealership with technicians who install equipment, deliver salt and bottled water, and maintain systems on recurring service contracts.
Culligan net unit count declined 0.7% over 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. Most numbers on this page come from that document; others come from federal SBA loan records and labor and census data, each labelled with its source:
- 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, transferred and left the system, the main basis for our verdict, which rates how strong the disclosed record is, or says when the system is too new, the filing too old, or the disclosure too thin to judge.
Our rating · opinion
Proven & steady
A real track record, solid rather than standout. Units held flat (2023–2025: 554 → 550); the fiscal 2025 exit rate was 0.7%, below the 7.4% median across 82 comparable systems (home services). SBA loans to its franchisees approved FY1991–2020 charged off far less often than franchise loans of the same years (0 vs about 15 expected, 0×).
Exit rate · fiscal 2025
0.7%
vs 7.4% median across 82 comparable systems (home services)
Cost to open
$130K–$816K
Item 7 total investment range
SBA loan losses · vs same-year loans
0×
0 of 102 charged off vs ~15 expected
Market density · Minnesota
Dense market
30% denser than the national average
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Data as of 2026-10-29. Figures come from Culligan's public FDD filings (latest: MN 2026, extracted 2026-07-23) and SBA FOIA loan records (through FY2026), extracted by us and possibly containing errors. The rating is our opinion, not investment, legal, or tax advice. Franchisor or owner and see something wrong? Report a correction — we review every request.
Buying an existing Culligan? Transfer fee and conditions, resale record and asking-price check →
What each source says
FDD record · SBA loans · model · auditor
The sources broadly agree, and the verdict follows the FDD's operating record.
FDD record · Item 20
Steady operating record
Units held flat (2023–2025: 554 → 550); exit rate 0.7% (fiscal 2025) vs 7.4% median.
SBA loans · vs same-year loans
Far fewer defaults than expected (0×)
0 charge-offs among 102 resolved loans approved FY1991–2020; about 15 expected.
Modeled risk
Lower risk
The brand's own loan record contradicts this prediction; the record leads.
Auditor opinion · Item 21
Clean opinion
Unqualified audit, 2026 FDD. Says nothing about franchisee results.
Behind the verdict
the record, factor by factor · Item 20
latest consecutive years · 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 · shown, not counted in the verdict
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 3 of 458 franchised outlets left the system — an exit rate of 0.7% (fiscal 2025), vs a 7.4% median across 82 comparable systems (home services). An exit is not a failure: this counts terminations, non-renewals and "ceased — other reasons" as reported, and excludes transfers to new owners.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 556 | 554 | 551 |
| Opened | 3 | 3 | 1 |
| Transfers | 16 | 7 | 13 |
| Terminations | 1 | 3 | 1 |
| Non-renewals | 0 | 0 | 0 |
| Reacquired by franchisor | 32 | 14 | 18 |
| Ceased — other reasons | 5 | 3 | 2 |
| Outlets at end | 554 | 551 | 550 |
| Net change | -2 | -3 | -1 |
The franchisor's own finances
FDD ITEM 21 · AUDITED STATEMENTS · 2026 FDD
Ernst & Young LLP gave an unmodified (clean) opinion on the statements in the 2026 FDD.
This is the company selling the franchise, not any franchisee. A clean opinion means the statements are fairly presented — not that the business is healthy.
Revenue
not extracted
2026 FDD
Net income
not extracted
2026 FDD
Revenue mix
Royalty share not extracted
initial-fee share not extracted
Show the statement figures ↓Hide the evidence ↑
No statement figures extracted from the 2026 FDD.
The lender's view
SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years
Banks have made 123 SBA-backed loans to Culligan franchisees since 1991. Of the 102 approved FY1991–2020 that have resolved, 0 charged off — where about 15 would be expected for franchise loans made in the same years. That is 0× the expected rate: these loans defaulted far less often than comparable franchise loans.
All-time, 0 of 102 resolved loans charged off (0.0%). That raw figure mixes every approval year since 1991 — loans made in 2006–08 failed at several times the rate of loans made in 2010–13 across all franchises — so it is shown as evidence, not as the score.
0×
0 of 102 resolved (FY1991–2020) vs ~15 expected
0.0%
0 of 102 resolved, every approval year
—
charged-off $ ÷ approved $, defaulted loans
$713,000
what recent franchisees borrowed
—
shown with 10+ defaults
6 vs 3
distinct banks still lending
Charge-off rate by loan approval year (%) · dashed line = all franchise loans that year
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO CULLIGAN BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD
The owner's side of the deal
FDD × federal loan record
Who finances it
Wells Fargo Bank National Association
14.8% of this brand's loans
That lender charges off 15.6% of its resolved SBA loans to other franchise brands in the FOIA file, vs 14.8% nationally — a read on that lender's portfolio mix, not a finding about the bank.
Who buys it
55.4%
borrowers with no other franchise SBA loan on record
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators have charged off less often than brands sold mostly to newcomers (see methodology).
Does experience help here?
+0.0pp
multi-unit vs single-unit owners
Owners of multiple units default at 0.0%; single-unit owners at 0.0% (each on 15+ resolved loans, owners identified by borrower-name matching).
Computed from 123 SBA 7(a)/504 loans matched to Culligan by SBA franchise code in the SBA FOIA file. Debt service assumes level amortization at the average disclosed term and rate. Owner-level splits rely on borrower-name matching and may misclassify. 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
Buying in means a $40,601 franchise fee (Item 5) and a total investment of $130K–$816K (Item 7). The franchisor publishes no earnings claim (Item 19) — ask current and former franchisees for real numbers.
To open (Item 7)
$130K–$816K
all-in investment range
Franchise fee (Item 5)
$40,601
upfront, one-time
Royalty (Item 6)
2%
of sales, ongoing
Starts at a placeholder of $500K — a round figure for the sector, not from Culligan’s filings. This brand's FDD makes no Item 19 earnings claim; set your own figure and check it with current and former owners.
Royalty you'd pay / yr
$10K
2% of sales, before profit
Over a 10-yr term
$100K
royalties alone, excl. ad fund
This estimate is computed by software from the brand's public filings and any inputs you enter. No CPA prepared it for you and no assurance is provided on it. Actual results will differ, and the differences may be material.
This is not profit. It covers what the FDD fixes: what you put in, and the royalty you owe on sales. Your take-home depends on labor, vehicles, supplies, insurance, and the months to breakeven, none of which the FDD fixes for your unit (some Item 19s include cost data — read it).
Build a real pro-forma for Culligan with a buyer-paid CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 5 wage cases against operators of this system, recovering $12K in back wages for 28 workers. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
5
Back wages owed
$12K
Employees affected
28
Since 2020
0
Read this carefully. The employers in these cases are individual Culligan franchisees — separately owned businesses operating under the brand name — not Culligan 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. Cases are matched to the brand by trade name and may include misattributed employers. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2018.
Modeled risk
FDD Risk Score · a prediction from disclosure and loan-file features
This brand's own loan record is better than the model predicts: its franchisees' SBA loans charged off at 0× the rate of same-year franchise loans, where the model expects about 0.7×. We lead with the observed record; the model is shown for context.
Observed · vs same-year loans
0×
0 of 102 seasoned loans charged off
Risk percentile
12th
Checkable · higher = riskier
Modeled · vs same-year loans
0.7×
≈ 11.8% at the all-loan vintage mix
Top drivers: Share financed by high-loss lenders (lowers) · Item 20 exit rate (lowers) · No Item 19 disclosure (lowers) · Royalty rate (raises). The observed record differs from the model, so treat the score as context only. A linear scorecard trained on brands' vintage-adjusted SBA loss records; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Public records
Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored
We have no verified public-record signals published for Culligan. This is not evidence that no events exist. Check PACER, the FDD's Item 3 (litigation) and Item 4 (bankruptcy), and recent news yourself.
11 questions to ask a Culligan franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These questions come from what Culligan has disclosed. Each one carries the number it came from, so you can check the answer against the record.
- 01
Culligan’s own Item 20 shows 3 of 458 franchised outlets left the system in fiscal 2025 — about 0.7%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2025
- 02
13 units transferred to new owners in fiscal 2025. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Item 20 counts transfers as neutral, but a transfer can be a good sale or a reluctant exit — the filing does not say which.
FDD Item 20 · FY2025
- 03
The system went from 554 units to 550 over 3 disclosed years. What's the explanation you've been given, and do you believe it?
A shrinking system means fewer owners funding the ad fund and support staff you're paying for.
FDD Item 20 · FY2023–FY2025
- 04
SBA loans to Culligan franchisees approved 1991–2020 defaulted far less often than franchise loans made in the same years: 0 charge-offs among 102 resolved loans, where about 15 would be expected (0×). Did you finance with an SBA loan, and how close did your first two years come to trouble?
This is the lender's view of how these loans ended, from public federal records matched by SBA franchise code — independent of anything the franchisor discloses — compared with franchise loans made in the same years. A charge-off is a loan outcome, not proof the business closed.
SBA 7(a)/504 loan record, seasoned loans FY1991–FY2020 · 0× of same-vintage franchise loans
- 05
Item 7 says the low end to open is $130K; the average recent SBA loan to Culligan franchisees was $713K. What did you actually spend to open, all in — and did your loan cover anything beyond the build-out?
Lenders size loans to the project they finance. If owners say they spent near the loan figure rather than the Item 7 floor, budget from what they spent.
FDD Item 7 vs SBA approvals FY2020+
- 06
You pay 2.0% royalty on gross sales, plus the ad fund, before any of your own costs. On your actual revenue last year, what did you take home as the owner — not revenue, take-home?
Royalty is charged on sales, not profit. This is the number the brochure never shows and the one your life actually runs on.
FDD Item 6
- 07
Culligan’s FDD makes no financial performance representation at all — legally, they've told buyers nothing about earnings. What did your first 24 months actually look like, month by month?
When a franchisor won't publish numbers, existing owners are the only source. Silence in Item 19 is a choice, not a requirement.
FDD Item 19 · 2026
- 08
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 09
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 10
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 11
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
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A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing Culligan’s numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Franchisors: send corrections with the page reference and we will review them against the filing and update or annotate the page. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
Culligan franchise questions, answered from the filings
How many Culligan franchised outlets left the system last year?
In Culligan's latest FDD Item 20 (fiscal 2025), 3 of 458 franchised outlets left the system — an exit rate of 0.7% — compared with a 7.4% median across 82 comparable systems (home services) tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons" as the franchisor reported them; it excludes transfers to new owners. The FDD does not say why each outlet left, and an exit is not the same as a failure.
How much does a Culligan franchise cost?
Per Culligan's 2026 FDD, buying in requires an initial franchise fee of $40,601 (Item 5) and a total initial investment of $130K–$816K (Item 7).
What royalty does Culligan charge?
Culligan charges an ongoing royalty of 2.0% of gross sales, per Item 6 of its 2026 FDD.
Does Culligan disclose earnings (Item 19)?
No — Culligan'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.
How often do SBA loans for Culligan franchises default?
SBA loans to Culligan franchisees approved 1991–2020 defaulted far less often than franchise loans made in the same years: 0 charge-offs among 102 resolved loans, where about 15 would be expected (0×). All-time, 0 of 102 resolved loans since 1991 charged off (0.0%); that raw figure mixes every approval year, so we compare with same-year loans instead. A charge-off is a loan loss, not proof the business closed. Source: public SBA 7(a)/504 FOIA data.