Verified — real FDD extraction
SBA-eligible · directory code S0448 since 2017
Culligan
Other · independent · est. —
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% 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
Proven & steady
Distress
A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The main concern in the record: the system is shrinking.
Exit rate · latest year
0.7%
fiscal 2025, per Item 20
Cost to open
$130K–$816K
Item 7 total investment range
SBA loan defaults
0.0%
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
In fiscal 2025, 3 of 458 franchised outlets left the system — a 0.7% annualized exit rate. Not every exit is a failure — but this is the measurable floor.
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 lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 123 SBA-backed loans to Culligan franchisees since 1991. Of the 102 that have resolved, 0.0% were charged off (defaulted) rather than paid in full, versus 14.8% across 570 rated brands.
0.0%
0 of 102 resolved defaulted
—
avg. charged-off $ ÷ approved $
—
default rate × loss severity
$713,000
what recent franchisees borrowed
—
approval → charge-off, defaulted loans
6 vs 3
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 CULLIGAN BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
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 loans to other franchise brands, vs 14.8% nationally.
Who buys it
55.4%
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?
+0.0pp
multi-unit vs single-unit owners
Owners of multiple units default at 0.0%; single-unit owners at 0.0%.
Computed from 123 SBA 7(a)/504 loans to Culligan 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
Buying in means a $41K 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)
$41K
upfront, one-time
Royalty (Item 6)
2%
of sales, ongoing
Your figure — this brand discloses no Item 19 earnings; validate with current & former owners.
Royalty you'd pay / yr
$20K
2% of sales, before profit
Over a 10-yr term
$200K
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 Culligan with an independent 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. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2018.
Modeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand looks safer than 71% of systems we score.
Risk percentile
29 / 100
Measured
Modeled SBA charge-off
10.0%
Observed SBA charge-off
0.0%
Top drivers: Share financed by high-loss lenders (lowers) · System size (log units) (lowers) · Item 20 exit rate (lowers) · Single-lender dependence (raises). 50+ resolved loans and complete disclosure data — the score is checkable against the brand's observed rate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
Culligan International Sheds Tracking Beacon Privacy Lawsuit
news:Bloomberg Law News · 10mo ago
Culligan Water Park closes ahead of schedule due to broken glass
news:Kingstonist News · 12mo ago
news:Kingstonist News · 17mo ago
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 are the questions built from what Culligan has actually disclosed — each one carries the number it came from, so you can tell whether the answer squares with 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?
Transfers count as neutral in every ranking. They are the single easiest place to hide distress.
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
Of 102 SBA loans to Culligan franchisees that have finished, 0.0% were charged off — the borrower didn't repay. 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 failure, from public federal records, and it is independent of anything the franchisor discloses.
SBA 7(a)/504 loan record, FY1991–present
- 05
Item 7 says the low end to open is $130K, but the average recent SBA loan to a Culligan franchisee was $713K. What did you actually spend to open, all in?
Lenders size loans to real project costs. A large gap between the disclosed floor and what banks actually fund is the most common way buyers get underfunded.
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?
I'll email you the printable version, and tell you if Culligan’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is paid by the franchisor to place you. I'm paid by you — 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. 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
What percentage of Culligan franchises closed last year?
In Culligan's latest FDD Item 20 (fiscal 2025), 3 of 458 franchised outlets left the system — an annualized exit rate of 0.7%. 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 Culligan franchise cost?
Per Culligan's 2026 FDD, buying in requires an initial franchise fee of $41K (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?
Across 123 SBA-backed loans to Culligan franchisees since 1991, 0 of the 102 that have resolved were charged off — a 0.0% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.