The FUND Score Halo: What Goddard’s 930 Rating and 1.2% Default Rate Actually Mean for Your SBA Application

You are somewhere in the financing research phase. You have read that Goddard earned a TopScore FUND Award for the fourth consecutive year in March 2026. You have seen the 930 out of 950 cited on franchise broker sites, in Goddard’s own development materials, and in at least one Reddit thread where somebody called it “basically a guaranteed SBA approval.”

It is not that.

The FUND score is a real, rigorous, and useful metric. It tells banks something specific about the franchise system’s risk profile. What it does not tell them — or you — is whether your specific deal, with your specific capital stack, in your specific market, at your specific investment level, will get approved and funded on terms you can service.

This article explains what the score actually measures, what the SBA lending data shows underneath it, and the three things neither metric can answer about your loan.

The FUND scoring system is a proprietary risk-rating methodology developed by FRANdata, an independent franchise research and advisory firm. It evaluates franchise systems — not individual franchisees — across 12 risk categories.

Those categories include:

• Historical unit success rate — How many units have opened and stayed open versus how many have closed or been terminated.
• Unit-level profitability — Whether the disclosed financial performance data (Item 19 in the FDD) indicates the typical franchisee can operate profitably after costs.
• Franchisee support infrastructure — Training programmes, operational support, real estate assistance, technology systems.
• System growth trajectory — Whether the system is growing in a controlled, sustainable way or overextending.
• Litigation and regulatory history — Whether the franchisor faces material legal exposure.
• Financial stability of the franchisor — The parent company’s own balance sheet, not the franchisees’.

The score runs from 100 to 950. Goddard’s 930 places it near the ceiling. What that number communicates to a lender is this: the franchise system itself is well-managed, its franchisees have historically succeeded at a high rate, and the brand’s support infrastructure reduces the risk of unit-level failure compared to lower-rated systems.

Banks representing over $5 trillion in total assets use FUND scoring as a component of their franchise lending decisions, per FRANdata’s own reporting. That is not every bank, but it is a substantial share of the franchise lending market. When a lender sees a 930, they are seeing a signal that the system-level risk is low.

The emphasis on system-level matters. The FUND score does not evaluate you. It does not know your net worth, your liquidity, your credit history, your market, your operating experience, or your proposed site. It evaluates the franchise brand as a lending environment. That is valuable, but it is one input among several.

The FUND score is a forward-looking risk assessment. The SBA lending history is the backward-looking record. Together, they tell a more complete story.

Per SBA loan data aggregated by PeerSense on Goddard’s SBA 7(a) lending history:

• Total loans originated: 687
• Total volume: $1,248.2 million ($1.25 billion)
• Average loan size: $1.8 million
• Median loan size: $1.3 million
• Loans charged off: 8
• Charge-off rate: 1.2%
• Active SBA lenders for Goddard: 135
• Selective lenders (those with tighter approval criteria): 21
• Peak origination year: 2019, with 69 approvals
• Top state by volume: Texas, with 85 financed locations
• Last five fiscal years: 35% of cumulative volume, approximately $442 million

What Those Numbers Mean

A 1.2% charge-off rate across 687 loans is exceptionally low. For context, the SBA 7(a) programme’s overall charge-off rate across all industries and franchise brands runs in the 3% to 5% range historically, per SBA.gov reporting. Goddard’s rate is roughly one-quarter of the programme average.

Eight defaults out of 687 loans means that for every 86 Goddard franchise loans originated, one was charged off. A lender reviewing that track record sees a dataset that says: this brand’s borrowers pay their loans back at an unusually high rate.

The 135 active lenders is also significant. It means Goddard deals are not concentrated in a handful of franchise-specialist banks. A broad lending base means competition among lenders for your deal, which translates into better terms, faster processing, and more options if your first choice declines.

The median loan size of $1.3 million versus the average of $1.8 million shows the same skew you see in Goddard’s revenue data. Most loans cluster below the average — consistent with the build-to-suit lease path at $1.0M to $1.5M being the most common investment structure. The larger loans pulling the average up are likely retrofit and land-purchase deals, which run $1.7M to $5.0M and $5.5M to $8.9M respectively.

The peak year of 2019 — 69 approvals — followed by lower volumes during 2020–2021 tracks exactly with the SBA lending freeze during the pandemic. The 35% of cumulative volume in the last five fiscal years ($442 million) indicates that lending has recovered but not fully returned to pre-pandemic peaks. Whether that reflects tighter lender appetite, fewer qualified applicants, or Goddard’s own system growth rate is not separable from the data alone.

Here is how the FUND score and the SBA data interact in practice.

When you walk into a bank with a Goddard franchise application, the loan officer does not start from zero. The 930 FUND score and the 1.2% default history create what lenders informally call a “halo” — a presumption that this is a well-structured deal from a low-risk system. That halo gets you through the door faster, gets your file prioritised over a higher-risk application, and may get you more favourable initial term sheets.

But the halo does not write the cheque. The lender still underwrites your deal on its own merits. And this is where the three gaps between “the brand is strong” and “your loan is approved” live.

Gap 1: The Score Does Not Underwrite Your Balance Sheet

The SBA 7(a) programme requires a personal guarantee, and the lender evaluates your personal financial position independently of the brand’s rating.

At a minimum, the lender is looking at:

• Liquidity. How much cash or near-cash you have available after the down payment. The SBA typically requires 10% to 20% equity injection. On a $1.3 million build-to-suit deal (the median loan size), that is $130,000 to $260,000 in cash — and the lender wants to see reserves beyond that.
• Net worth. Most franchise lenders want to see a net worth at or above the total project cost. For a build-to-suit at $1.0M to $1.5M, that means $1 million-plus in total assets minus liabilities.
• Credit history. A 930 FUND score does not offset a 620 personal credit score. Franchise lending starts at the borrower, not the brand.
• Relevant experience. Goddard does not require childcare experience, but lenders weigh management and business operations background heavily. A first-time business owner with a strong W-2 history is a different risk profile than a multi-unit operator with a proven P&L track record.

None of these are things the FUND score measures or the SBA default rate reflects. A brand with an impeccable lending history can still have individual applicants who do not qualify. The 8 charged-off loans out of 687 were presumably made to borrowers who did qualify at origination — and still defaulted.

Gap 2: The Score Does Not Know Your Market

Goddard’s national default rate of 1.2% is an average across 687 loans in markets ranging from dense, high-income suburbs to secondary markets with lower tuition pricing power. The competitive dynamics in your territory determine your revenue ceiling, and revenue is what services the debt.

Consider two scenarios:

• Scenario A: You are opening in a northern Virginia suburb. Median household income is $175,000. There is one competing premium childcare centre within five miles. Waitlists in the area run 6 to 12 months. Your projected tuition is $2,200 per month per child.
• Scenario B: You are opening in a mid-tier suburban market. Median household income is $72,000. There are three competing childcare centres within three miles, including a Kiddie Academy and a KinderCare. Your projected tuition is $1,400 per month per child.

Both scenarios carry the same 930 FUND score. Both can cite the same 1.2% default rate. But the revenue model, the enrolment timeline, the competitive pressure, and the margin on the same-sized loan are fundamentally different. A lender doing their job will underwrite the market, not just the brand.

This is where the FDD financial analysis matters. Item 19 data shows an 11.2x spread between Goddard’s lowest-revenue and highest-revenue mature schools. The FUND score does not tell you where in that spread your school is likely to land. Your market does.

Gap 3: The Score Does Not Set Your Terms

A 930 does not come with a rate sheet. Two borrowers opening Goddard schools in the same quarter, with the same FUND score attached to their applications, can receive materially different loan terms.

The variables that drive your actual cost of capital include:

• Loan structure. An SBA 7(a) loan for a build-to-suit lease looks different from a 504 loan for a land-purchase deal. The interest rate, amortisation period, and collateral requirements differ by programme and by deal.
• Down payment. More equity in the deal means less risk for the lender and typically better rates. A borrower injecting 20% gets a different term sheet than one injecting 10%.
• Lender competition. With 135 active SBA lenders for Goddard, your terms are partly a function of how many you approach and how well you negotiate.
• Rate environment. The SBA 7(a) rate is pegged to the prime rate plus a spread. Where interest rates sit at the time you close determines your monthly payment on the same loan amount.

Capital advisors like Lendesca work across multiple franchise brands at this investment level, and franchise-specialist SBA lenders like Live Oak Bank and ApplePie Capital have dedicated childcare franchise teams. Shopping your deal across multiple lenders is not optional — it is where the FUND score’s halo converts into actual dollars saved on your term sheet.

None of the above is an argument that the FUND score does not matter. It does. Here is what it reliably signals:

1. The system produces operators who repay their loans. A 1.2% charge-off rate across $1.25 billion in lending volume is not an accident. It reflects a franchise system where the training, support, real estate selection process, and unit economics produce franchisees who can service debt.
2. Lenders have experience with this brand. 135 active lenders means your loan officer has probably seen a Goddard deal before. They understand the cost structure, the revenue ramp, the lease terms, and the working capital needs. That familiarity accelerates the process and reduces the chance of a decline based on unfamiliarity.
3. The brand’s risk is not your risk to carry. In lower-rated franchise systems, part of what a lender is underwriting is whether the franchisor will still be operating in five years. With Goddard — 665 US locations, a 930 FUND score, and a 15-year franchise agreement term — the systemic risk of the brand collapsing mid-loan is not a realistic concern. That risk, at least, is off your plate.
4. You have leverage in rate negotiation. A high FUND score gives you a defensible reason to push back on a term sheet. If a lender quotes SBA 7(a) at prime plus 2.75%, the lending history justifies asking for prime plus 2.25% or better. The data is on your side, and the lender knows other lenders will compete for the deal.

If you are preparing an SBA application for a Goddard franchise, here is how the FUND score and the lending data fit into the process.

Step 1: Understand which investment path you are on. The score is the same across all three, but the loan structure is not. A build-to-suit lease at $1.0M to $1.5M is a straightforward SBA 7(a) deal. A land-purchase deal at $5.5M to $8.9M may require layered financing that goes beyond a single SBA product. Know your path before you talk to a lender.

Step 2: Lead with the data, not the marketing. When you present your deal, cite the specific numbers: 930 FUND score, 1.2% charge-off rate across 687 loans, 135 active lenders. These are verifiable facts that a loan officer can confirm. Do not cite “Goddard is one of the best franchise investments in childcare” — that is marketing copy and it undermines your credibility.

Step 3: Get multiple term sheets. With 135 active SBA lenders (21 selective), you have options. Approach at least three lenders, including at least one franchise-specialist bank. The International Franchise Association’s lending resources can help identify franchise-experienced lenders in your region.

Step 4: Underwrite yourself honestly. The FUND score does not fix a thin balance sheet. Before you apply, know your personal credit score, your liquidity after equity injection, and your household’s ability to absorb 12 to 18 months of reduced income during the ramp period. If you are light on any of these, a 930 FUND score does not compensate.

Step 5: Model the debt service against realistic revenue, not averages. Use the median loan size ($1.3M), not the average ($1.8M), as your starting point for a build-to-suit deal. Model your revenue at or below the system median, not the average. If the debt service works at the 40th percentile of system revenue, your deal is resilient. If it only works at the average, you are betting on outperformance from day one.

Goddard’s 930 FUND score and 1.2% SBA default rate are the strongest lending credentials in the premium childcare franchise space. They are earned, they are verified by independent analysis, and they materially improve the speed and terms of your SBA application.

They are not a substitute for your own financial qualification, your market analysis, or your ability to negotiate terms. The score tells a lender that the system works. Your application tells them whether you will work inside it.

The franchisees behind those 8 charged-off loans out of 687 had the same FUND score attached to their applications. The score did not save them. What separates the 679 who repaid from the 8 who did not is almost certainly some combination of market selection, capitalisation, operating execution, and timing — the variables that the score cannot measure and that no brand rating ever will.

Use the score for what it is: a door-opener and a negotiating tool. Then do the work that the score cannot do for you.