From the filed FDD — automated extraction, check the source
2026 FDD
Qargo Coffee
Coffee · parent company: not identified
Qargo Coffee is a specialty coffee shop concept serving espresso drinks, teas, and light food in formats ranging from compact units to full cafes. A franchisee operates a storefront coffee shop with baristas, serving daily commuters and cafe customers.
Qargo Coffee went from 2 → 10 units over 2023–2025 — too small a starting base for a meaningful percentage 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
Weaker disclosed record
As we extracted it, the audited financial statements in this brand's 2026 FDD include going-concern language — a statement of "substantial doubt" that the franchisor (or, in some filings, its parent) can continue operating for a year. Where it appears (the auditor's report, management's notes, or the state cover page) is shown in the franchisor-finances section below; confirm it in the FDD's financial-statement exhibit. We cap the rating whenever it appears.
Exit rate · fiscal 2025
16.7%
vs 3.9% median across 8 comparable systems (coffee)
Cost to open
$155K–$625K
Item 7 total investment range
SBA loan losses
Too few to rate
0 seasoned resolved loans; 30 needed
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Data as of 2026-10-29. Figures come from Qargo Coffee's public FDD filings (latest: MN 2026, extracted 2026-07-22) 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.
What each source says
FDD record · SBA loans · model · auditor
The going-concern disclosure in Item 21 comes first: whatever the unit or loan record says, the filing itself raises doubt that the company selling the franchise, or the parent behind it, can keep operating.
FDD record · Item 20
Weaker operating record
Units went from 2 to 10 (2023–2025); exit rate 16.7% (fiscal 2025) vs 3.9% median.
SBA loans · vs same-year loans
Too few seasoned loans
0 resolved loans approved by FY2020; 30 needed.
Modeled risk
Not scored
Too little evidence for the model.
Auditor opinion · Item 21
Going-concern doubt
In the auditor's report in the 2026 FDD.
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, 1 of 6 franchised outlets left the system — an exit rate of 16.7% (fiscal 2025), vs a 3.9% median across 8 comparable systems (coffee). 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 | 2 | 2 | 6 |
| Opened | 0 | 5 | 5 |
| Transfers | 0 | 0 | 0 |
| Terminations | 0 | 0 | 0 |
| Non-renewals | 0 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 0 | 1 | 1 |
| Outlets at end | 2 | 6 | 10 |
| Net change | 0 | +4 | +4 |
The franchisor's own finances
FDD ITEM 21 · AUDITED STATEMENTS · 2026 FDD
Etiendem CPA's report in the 2026 FDD includes a going-concern paragraph: substantial doubt about the franchisor's ability to continue; revenue rose 39% from FY2024 to FY2025, it reported a net loss in every year shown (FY2024–FY2025) and initial and development fees were 65% of FY2025 revenue.
The auditor's report on Qargo Coffee, Inc. has a "Substantial Doubt About Qargo Coffee, Inc.’s Ability to Continue as a Going Concern" section (pp. 132–133). Opinion not modified.
Revenue · FY2025
$1.4M
p. 136 · matched to statement
Net income · FY2025
−$574K
p. 136 · matched to statement
Where FY2025 revenue came from
8% royalties
65% initial / development fees
Show the statement figures ↓Hide the evidence ↑
| Fiscal year | FY2024 | FY2025 |
|---|---|---|
| Total revenue | $1.0Mp. 136 · matched to statement | $1.4Mp. 136 · matched to statement |
| Royalty revenue | $52Kp. 136 · matched to statement | $117Kp. 136 · matched to statement |
| Initial / development feesline: Development fee; Franchise fee | $827Kp. 136 | $930Kp. 136 |
| Net income (loss) | −$402Kp. 136 · matched to statement | −$574Kp. 136 · matched to statement |
| Equity (deficit) at year end | −$620Kp. 135 | −$1.2Mp. 135 |
| Cash at year end | $27Kp. 135 | $192Kp. 135 |
The lender's view
SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years
Banks have made 6 SBA-backed loans to Qargo Coffee franchisees since 2025. Only 0 of its loans approved by FY2020 have resolved — fewer than the 30 we need to compare it fairly with other franchise loans, so we don't rate it.
All-time, 0 of 0 resolved loans charged off (—). That raw figure mixes every approval year since 2025 — 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. 100% of the brand's loans have not resolved yet.
—
0 seasoned resolved · 30 needed
—
0 of 0 resolved, every approval year
—
charged-off $ ÷ approved $, defaulted loans
$419,017
what recent franchisees borrowed
—
shown with 10+ defaults
—
distinct banks 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 QARGO COFFEE BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $50,000 franchise fee (Item 5) and a total investment of $155K–$625K (Item 7). The franchisor publishes no earnings claim (Item 19) — ask current and former franchisees for real numbers.
To open (Item 7)
$155K–$625K
all-in investment range
Franchise fee (Item 5)
$50,000
upfront, one-time
Royalty (Item 6)
6%
of sales, ongoing
Starts at a placeholder of $900K — a round figure for the sector, not from Qargo Coffee’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
$54K
6% of sales, before profit
Over a 10-yr term
$540K
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 food and packaging cost, labor, rent, 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 Qargo Coffee with a buyer-paid CPAPublic records
Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored
We have no verified public-record signals published for Qargo Coffee. This is not evidence that no events exist. Check PACER, the FDD's Item 3 (litigation) and Item 4 (bankruptcy), and recent news yourself.
10 questions to ask a Qargo Coffee 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 Qargo Coffee has disclosed. Each one carries the number it came from, so you can check the answer against the record.
- 01
Qargo Coffee’s own Item 20 shows 1 of 6 franchised outlets left the system in fiscal 2025 — about 16.7%. 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
Item 7 says the low end to open is $155K; the average recent SBA loan to Qargo Coffee franchisees was $419K. 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+
- 03
You pay 6.0% 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
- 04
Qargo Coffee’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
- 05
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
- 06
Our extraction of the franchisor's audited financials (Item 21) found going-concern language — confirm it in the filing. Has support or supply changed for you in the last year?
If the franchisor fails, your agreement, your supply chain and your brand can be sold to someone whose plans you never agreed to.
FDD Item 21 · audited financials
- 07
Item 3 discloses 1 legal matter. Do you know what it was about, and was it brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2026
- 08
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
- 09
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
- 10
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 Qargo Coffee’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.
Qargo Coffee franchise questions, answered from the filings
How many Qargo Coffee franchised outlets left the system last year?
In Qargo Coffee's latest FDD Item 20 (fiscal 2025), 1 of 6 franchised outlets left the system — an exit rate of 16.7% — compared with a 3.9% median across 8 comparable systems (coffee) 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 Qargo Coffee franchise cost?
Per Qargo Coffee's 2026 FDD, buying in requires an initial franchise fee of $50,000 (Item 5) and a total initial investment of $155K–$625K (Item 7).
What royalty does Qargo Coffee charge?
Qargo Coffee charges an ongoing royalty of 6.0% of gross sales, per Item 6 of its 2026 FDD.
Does Qargo Coffee disclose earnings (Item 19)?
No — Qargo Coffee'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.