THE RESALE RECORD · FDD ITEM 20 · FISCAL 2016–2018
Buying an existing NrGize Lifestyle Cafe franchise
NrGize Lifestyle Cafe units do come up for sale: its own FDD Item 20 shows 2 franchised outlets transferred to new owners in fiscal 2018 — 2.5% of the 81 franchised outlets open at the start of the year, and 23 across 2016–2018. A resale is a different purchase from a new unit — better evidenced, differently priced, and with its own ways to go wrong. This page reads the record first, then the diligence.
| Fiscal year | Transfers (resales) | Exits | Reacquired by franchisor | Franchised at start |
|---|---|---|---|---|
| 2016 | 17 | 5 | 0 | 90 |
| 2017 | 4 | 11 | 0 | 87 |
| 2018 | 2 | 2 | 0 | 81 |
A transfer is an owner selling a unit that keeps operating; an exit is a unit that left the system. The ratio between them is the health of the secondary market. In NrGize Lifestyle Cafe's latest year, transfers and exits ran close together — some owners are finding buyers, others are leaving without one. Ask on your validation calls which of the two your target unit's market looks like, and what recent units actually sold for.
Two cautions. Reacquisitions (0 in fiscal 2018) are the franchisor buying units back — sometimes strategy, sometimes a rescue; ask which. And a location that has transferred repeatedly is the classic churning pattern: always ask how many owners your specific location has had, and call the previous one — former franchisees are listed in the FDD exhibits.
A new unit is a projection you stress-test. A resale has evidence — three years of a real unit's books — and the whole job is tying that evidence out. The seller's broker will hand you an “owner benefit” number; it is a marketing figure until every add-back in it has been tested against documents.
- The seller's own numbers, three ways. P&Ls, the matching tax returns, and the royalty statements the franchisor holds. Revenue on a royalty statement is revenue the seller paid a percentage on — it is the hardest number in the deal to inflate.
- Every add-back, tested. “Owner benefit” recasts the P&L by adding back the seller's salary, family wages, personal vehicle, one-time costs. Some add-backs are real; each one must survive the question “will this cost exist for me?” — a manager you must hire to replace the seller is not an add-back, it is a cost.
- Reason for sale, triangulated. Sellers retire, relocate, and burn out — and sometimes they are selling ahead of a road closure, a lease step-up, or a remodel mandate. Ask the seller, then ask neighboring franchisees, then ask the franchisor. The answers should match.
- The lease, before the LOI. You need the landlord's consent to assign, the remaining term with options, and any personal guarantee the assignment drags you into. A great unit on a two-year lease tail is a two-year business.
- The franchisor's gate. Transfers need franchisor approval, usually a transfer fee, often retraining — and frequently a remodel-to-current-image obligation that lands on the buyer. Get the franchisor's transfer conditions in writing before you price the deal; they are in the FDD and the seller's franchise agreement.
- Your agreement, not theirs. Many franchisors sign the buyer to the CURRENT franchise agreement, not the seller's — different royalty, different territory language, different renewal terms. Compare the two before assuming you are buying the seller's deal.
SBA 7(a) loans finance franchise resales routinely — often on better evidence than a new unit, because the bank underwrites real historicals instead of projections. NrGize Lifestyle Cafe's SBA cohort is too thin to publish a reliable charge-off rate, which itself is worth knowing: your lender will be underwriting the unit and you more than the brand. Price the resale against the alternative you always have: the franchisor's own Item 7 estimate of $107K–$347K to build new.
This is the deal my Deal Review was built for: three years of the seller's P&Ls tied out against tax returns and royalty statements, every add-back tested, and what the unit really clears after your debt service — not the broker's number. Start with the free call; if the deal is real, we go deep.
The NrGize Lifestyle Cafe validation checklist
questions built from this brand's own filings · read them all on the profile
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A broker is paid by the franchisor to place you. I'm paid by you — and the job is pressure-testing NrGize Lifestyle Cafe's numbers, including talking you out of a bad deal.