FUND Score 930: What 142 SBA Loans With Zero Defaults Tell You About Primrose’s Risk Profile

You’ve run the P&L. You’ve stress-tested payroll at 48%. You’ve modeled bottom-quartile revenue. But there’s a data set that most prospective franchisees never see — and it may tell you more about system-level risk than any single financial metric in the FDD.

Primrose Schools earned a FUND™ Score of 930 in 2026 — the fourth consecutive year at TopScore status. That score, issued by FRANdata, is the credit risk assessment that banks and SBA lenders actually use when deciding whether to approve your loan. And the number underneath it is even more telling: zero SBA loan defaults on 142 loans, with a $3.1 million median loan size.

Here’s what that means for you, and why it doesn’t mean what the franchise sales team wants it to mean.

The FUND Score is not a franchise review. It’s not a consumer rating. It is a proprietary credit risk assessment created by FRANdata specifically for lenders evaluating franchise loan applications.

The score factors in:

• Historical loan performance — default and charge-off rates across the system
• Unit economics consistency — how predictable is revenue across the franchise footprint
• Franchisor financial stability — is the parent entity solvent and well-capitalized
• Franchisee support infrastructure — training, operations support, site selection guidance
• System growth patterns — is growth disciplined or aggressive beyond support capacity

A score of 930 out of a possible 950 places Primrose among the lowest-risk franchise systems in the country — not just in childcare, but across all franchise categories.

For context, the average franchise FUND Score sits around 700–750. Scores above 900 are rare. Primrose has been above 900 for four consecutive years.

Here’s the number that should anchor your risk analysis: 142 SBA loans issued to Primrose franchisees, zero charge-offs.

That 0.0% default rate compares to:

• SBA franchise lending overall: approximately 3–5% default rate depending on the measurement period
• Food franchise SBA default rates: often 5–8%, with some concepts exceeding 10%
• Fitness franchise SBA default rates: 4–7% range, with boutique concepts higher

The $3.1 million median loan size tells you something too. These aren’t small, low-risk loans. At $3.1M median, lenders are writing checks that cover real estate, equipment, working capital, and franchise fees for a purpose-built childcare facility. Every one of those 142 borrowers has made every payment.

Preferred Lending Terms

Banks and SBA lenders use FUND Scores to risk-tier franchise concepts. A 930 score translates to:

• Faster approval timelines — lenders have pre-existing comfort with the concept
• More favorable rate negotiations — lower perceived risk means less rate premium
• Higher approval rates — especially at SBA Preferred Lenders who process franchise loans in volume
• Reduced documentation friction — lenders familiar with Primrose’s track record need less convincing

If you’re applying for an SBA 7(a) or 504 loan for a Primrose location, you’re walking in with the lending equivalent of an 800+ credit score on the franchise side. Your personal financial profile still matters, but the concept risk box is already checked.

For buyers navigating the SBA lending process — particularly the 504 structure that’s increasingly relevant for Primrose’s real estate-heavy model — resources like Lendesca can help you understand how system-level risk profiles like FUND Scores translate into your specific loan terms.

The Competitive Lending Advantage

Compare Primrose’s lending profile against its direct competitors:

• The Goddard School: Strong FDD performance data but smaller SBA loan sample size
• Kiddie Academy: Lower investment range means smaller loans, different risk profile
• KinderCare: Primarily corporate-owned, limited franchise lending data

When a lender evaluates your Primrose application against the same lender’s experience with other childcare concepts, the 142-loan, zero-default track record is a material advantage. It does not guarantee your approval, but it removes a significant objection. For a head-to-head breakdown, see the competitive comparison.

Here’s where the honest analysis starts. A system-level risk score is valuable, but it has blind spots:

1. Survivorship Bias

The 0.0% default rate reflects loans that were approved and issued. It does not include:

• Franchisees who couldn’t secure financing and never opened
• Franchisees who self-funded and failed without an SBA loan to default on
• Franchisees who sold at a loss before missing a loan payment
• Franchisees who refinanced out of SBA debt into higher-cost alternatives

A zero default rate means no borrower failed badly enough to stop paying the bank. It does not mean every borrower succeeded.

2. Systemic Conditions

Those 142 loans were originated across a period of historically low interest rates, strong real estate appreciation, and expanding childcare demand. The system’s track record under stress — rising rates, enrollment pressure, subsidy cuts — is less tested.

The new SBA SOP 50 10 8.1 rules taking effect October 1, 2026, raise the DSCR floor from 1.15x to 1.25x for acquisitions. The FUND Score was earned under the old rules. Whether the same approval rates hold under tighter standards remains to be seen.

3. Location-Specific Risk

A system-level score tells you about the average Primrose location. Your location is not average. The quartile revenue spread — $3.81M at the top vs. $1.79M at the bottom — means the range of outcomes is wide even within a low-default system.

A bottom-quartile location carrying a $3.1M loan at the full fee burden of 11–13% has a very different debt service coverage ratio than a top-quartile location.

4. The PE Transition Variable

Primrose’s FUND Score was built under Roark Capital’s 18-year ownership. Taurus Capital Partners acquired the system in March 2026. New ownership brings new growth strategies, new capital allocation priorities, and potentially different franchisee support levels. The FUND Score is backward-looking. The franchise you’re buying into is forward-looking.

The FUND Score and SBA default data are genuinely useful inputs. Here’s how to weight them correctly:

1. Use it as a financing advantage, not an investment thesis. The lending data tells you banks trust this system. It does not tell you your specific location will generate the returns you need.
2. Ask your lender directly. When applying for financing, ask: “What is your institution’s experience with Primrose SBA loans?” A lender with 10+ Primrose loans on their books will process yours differently than a lender seeing the concept for the first time.
3. Compare against alternatives. If you’re evaluating Primrose against Goddard, Kiddie Academy, or KinderCare, request the FUND Score for each. The comparison tells you which systems lenders consider most reliable — and which ones will get you the best terms.
4. Model your own DSCR. The system-level data tells you Primrose locations, on average, generate enough cash flow to service their debt. Run the math at YOUR projected revenue, YOUR market’s rent, YOUR state’s staffing ratios. If you clear 1.25x DSCR at third-quartile revenue with realistic expenses, the system data reinforces your thesis. If you only clear it at average revenue, the system data is masking your location-specific risk.

A FUND Score of 930 and zero SBA defaults across 142 loans is exceptional. It is objective, third-party validation that Primrose’s franchise system produces borrowers who repay their loans. That is a meaningful data point.

But it is not a guarantee, it is not location-specific, and it was earned under conditions that are changing. Use it as one input — a strong one — in a multi-variable decision. The prospective Primrose buyer who combines system-level lending data with location-specific P&L modeling, state-adjusted cost analysis, and honest cash flow projections is the one making a fully informed decision.

The FUND Score tells you the system works. Your job is to figure out whether it works for you, in your market, at your investment level.