Dana DD rubric
Criteria, weights, auto-fails, benchmarks
Rubric is versioned in code (lib/ddCriteria.ts). Edit weights there to recalibrate all future scores.
Individual dimensions (100 weight)
Financial capacity
weight 20Liquid capital, net worth, clean source of funds, runway to absorb ramp-up.
Sub-criteria
- • Liquid capital vs. brand minimum
- • Net worth vs. brand minimum
- • Source-of-funds verification / AML clearance
- • Debt-to-net-worth ratio
- • Runway for 24+ months of ramp
Red flags
- • Vague or inconsistent source of funds
- • Heavy reliance on borrowed capital or third-party guarantees
- • Recent personal bankruptcy or serial cash shortfalls
Operator fit
weight 15Ability and willingness to operate the unit(s), not just invest.
Sub-criteria
- • Years operating businesses
- • Hands-on vs absentee intent
- • Industry experience (F&B, retail, service, etc.)
- • P&L ownership history
- • Team leadership experience
Red flags
- • Pure passive investor where brand requires hands-on
- • No prior P&L ownership and no recruited operator
- • Unrealistic time commitment (<20 hrs/week for single unit launch)
Market knowledge
weight 10Understanding of target market demand, demographics, regulation, channels.
Sub-criteria
- • Local language + cultural fluency
- • Customer demographics insight
- • Regulatory awareness (license, labor, import)
- • Channel and supply-chain knowledge
- • Competitive landscape grasp
Red flags
- • No locally-resident operator
- • Underestimates regulatory complexity
- • Generic 'growing market' thesis with no data
Cultural & brand alignment
weight 10Values, motivation, long-term orientation, fit with brand DNA.
Sub-criteria
- • Long-term (≥7 yrs) vs short-term intent
- • Motivation beyond pure ROI
- • Values match with brand
- • Willingness to follow the system
- • Relationship orientation (esp. APAC cross-border)
Red flags
- • Primarily flipping / short-term ROI focus
- • History of modifying/violating prior franchisor systems
- • Misaligned values (e.g., premium brand vs. budget operator mindset)
Legal & regulatory clearance
weight 15Criminal, civil, bankruptcy, sanctions, PEP, tax — clean record.
Sub-criteria
- • Criminal record (esp. financial crime, fraud, ML)
- • Personal bankruptcy (discharged vs undischarged)
- • Civil litigation as defendant
- • Sanctions / PEP exposure
- • Tax compliance
Red flags
- • Any financial-crime or fraud conviction (last 10 yrs) — AUTO-FAIL
- • Undischarged bankruptcy — AUTO-FAIL
- • Active major civil suit threatening solvency
- • Unconsented PEP / sanctions match — AUTO-FAIL
Reputation
weight 10Media footprint, social presence, community standing, references.
Sub-criteria
- • Media and news sentiment
- • Professional social profile integrity
- • Peer and supplier references
- • Community / industry standing
- • Online reviews / complaints
Red flags
- • Pattern of disputes with partners or suppliers
- • Negative news coverage or regulator warnings
- • Declines to provide references
Psychological fit
weight 8Risk tolerance, resilience, decision style, coachability.
Sub-criteria
- • Risk tolerance vs. investment profile
- • Resilience under stress
- • Decision-making style
- • Coachability / willingness to follow system
- • Realistic expectations
Red flags
- • Overconfidence about timeline to profitability
- • Refuses or resents system-mandated training
- • History of conflict under pressure
Personal stability
weight 7Family, health, time availability — the human layer.
Sub-criteria
- • Family support for the commitment
- • Health / capacity for multi-year effort
- • Geographic stability
- • Weekly hours available
Red flags
- • Active divorce with unresolved asset split
- • Health condition incompatible with operator role
- • Undisclosed competing commitments
Growth capacity
weight 5Ability to expand beyond unit 1 — capital runway + operating depth.
Sub-criteria
- • Capital for additional units
- • Bench of operators to grow with
- • Appetite for multi-unit (if brand model requires it)
Red flags
- • All-in on unit 1 with no growth capital
- • No ability to recruit additional operators
Corporate dimensions (100 weight)
Structure & ownership
weight 12Entity type, UBO transparency, shareholder quality, jurisdiction.
Sub-criteria
- • Clear UBO disclosure
- • Clean corporate chain (no obscuring shell layers)
- • Quality of co-shareholders
- • Jurisdiction reputation (FATF, CPI)
- • Shareholder agreements
Red flags
- • Opaque UBO or refusal to disclose
- • Multiple offshore layers with no commercial rationale
- • High-risk jurisdictions (FATF grey/black list)
Financial health
weight 20Audited financials, profitability, cash flow, debt, liquidity.
Sub-criteria
- • Audited financials (Big 4 or reputable firm)
- • Revenue trend (3-yr)
- • EBITDA margin and trend
- • Free cash flow
- • Debt-to-EBITDA and covenant status
- • Cash runway
Red flags
- • No audit or unqualified auditor
- • Declining revenue + rising debt
- • Covenant breach risk
- • Material going-concern note
Operational track record
weight 15Existing businesses, franchise portfolio performance, unit economics.
Sub-criteria
- • Years operating franchise/brand portfolio
- • Unit-level AUV vs brand target
- • Churn / unit-closure rate
- • Franchisee satisfaction scores (if applicable)
- • Operational KPIs discipline
Red flags
- • High unit churn in current portfolio
- • History of terminated franchise agreements
- • No KPI dashboards
Leadership & governance
weight 10Board quality, C-suite depth, succession, internal controls.
Sub-criteria
- • CEO tenure and track record
- • C-suite depth and bench
- • Board independence and expertise
- • Succession plan
- • Internal audit / control environment
Red flags
- • Founder-dependent with no succession
- • Recent C-suite turnover
- • Weak or captive board
Legal & compliance
weight 12Litigation, regulator actions, sanctions, ABC/FCPA posture.
Sub-criteria
- • Material pending litigation
- • Regulator enforcement history
- • Sanctions / export control exposure
- • ABC / FCPA / UKBA program
- • Data protection compliance
Red flags
- • Active regulator enforcement — AUTO-FAIL on severe categories
- • Sanctions exposure of entity or UBO — AUTO-FAIL
- • Recent major settlement implying systemic failure
Market position
weight 8Share, competitive standing, customer base, pricing power.
Sub-criteria
- • Market share in core segments
- • Brand equity / NPS
- • Customer concentration
- • Pricing power
Red flags
- • High customer concentration (>30% single customer)
- • Eroding share
Portfolio & brand alignment
weight 8Existing brands don't conflict, dilute, or cannibalize.
Sub-criteria
- • Direct competitor brands in portfolio
- • Operational bandwidth across brands
- • Shared infrastructure logic
- • Brand-positioning compatibility
Red flags
- • Active franchise of direct competitor — AUTO-FAIL if exclusivity breach
- • Portfolio already stretched beyond ops capacity
Geographic development capacity
weight 8Real estate pipeline, HR, supply chain, local execution muscle.
Sub-criteria
- • Real estate pipeline (signed LOIs, broker network)
- • Recruiting and training capacity
- • Supply chain / logistics capability
- • Speed of prior rollouts
Red flags
- • No identified real estate pipeline
- • Untested HR capacity for the growth rate promised
Technology & systems
weight 4IT readiness for franchisor POS, reporting, CRM, supply systems.
Sub-criteria
- • POS / ERP capability
- • Data reporting maturity
- • Integration capability with franchisor stack
Red flags
- • Paper-based operations at scale
- • Refuses required tech stack
ESG & reputation
weight 3Sustainability, labor, community, public reputation.
Sub-criteria
- • Labor practices
- • Sustainability commitments
- • Community / public reputation
- • Press sentiment
Red flags
- • Labor violations / exploitation findings
- • Environmental enforcement history
Auto-fail triggers
- • Active sanctions match (OFAC / EU / UN / UK HMT) against candidate or UBO
- • Unconsented PEP match without remediation plan
- • Conviction for financial crime, fraud, or money laundering in the last 10 years
- • Undischarged bankruptcy
- • Failed source-of-funds verification
- • Active franchise agreement with a direct competitor (exclusivity breach)
- • Material misstatement in intake (detected post-research)
- • Refusal to provide KYC / KYB fundamentals
- • Active severe regulator enforcement (license revocation, freezing order)
Global franchisor benchmarks
| Brand | Liquid (USD) | Net worth (USD) | Operator profile |
|---|---|---|---|
| McDonald's | $500,000 | $1,000,000 | Hands-on required, no absentee |
| Subway | $30,000 | $80,000 | Operator-led |
| 7-Eleven | $50,000 | $150,000 | Hands-on |
| KFC / YUM | $1,500,000 | $1,500,000 | Multi-unit experience for developers |
| Domino's | $75,000 | $250,000 | Prior restaurant ops |
| Marriott (select service) | $5,000,000 | $10,000,000 | Multi-unit hotel dev experience |
| Hilton (Hampton/HGI) | $5,000,000 | $10,000,000 | Hotel ops |
| IHG | $3,000,000 | $6,000,000 | Hotel dev experience |
| Anytime Fitness | $100,000 | $300,000 | Owner-operator preferred |
| Burger King / RBI | $500,000 | $1,500,000 | Multi-unit preferred |
| Pizza Hut | $700,000 | $1,000,000 | QSR ops |
| Jollibee | $1,000,000 | $2,000,000 | APAC multi-unit preferred |
| Dunkin' | $250,000 | $500,000 | Multi-unit preferred |
| UPS Store | $75,000 | $150,000 | Owner-operator |
| RE/MAX | $35,000 | $150,000 | Real estate license + brokerage |
Benchmarks are indicative, drawn from publicly disclosed franchisor requirements. Always check the current FDD or equivalent for exact figures.