Module 6 — Unit economics and portfolio math

⚠️ This module contains internal-only numbers. Do not reproduce in any public-facing material — marketing, web, press, social, distributed decks, sales calls outside an NDA — without Kevin Hein review. The figures here exist for executive working memory and confidential investor conversations.

Section 1 · Tier 1 — The 60-second brief

The Franchise product’s unit economics are strong enough that HiON’s V2 marketing said them out loud. The V3 redline (Akerman, early 2026) stripped them from public copy. The numbers themselves did not change — only the audience that gets to hear them.

1. Year-3 EBITDA target per site. ~$171,275.
2. Year-4 EBITDA target per site. ~$200,170.
3. Targeted EBITDA margin. 40%+.
4. Targeted payback (unleveraged). ~3.5 years.
5. Targeted payback (20% leverage). Under 1 year. 95–121% ROI implied.
6. 10-location portfolio annual EBITDA target. ~$2M+.
7. Public uptime descriptor. “Designed to support high uptime; actual uptime varies by site and equipment.” Internal target: 98%+.
8. What every internal-only number maps to in public. (omitted from public copy). The compliance translation table in §3.7 is the lookup.

What you must be able to say without notes — and to whom: the Year-3 and Year-4 per-site EBITDA targets; the EBITDA margin target; the two payback scenarios (unleveraged and at 20% leverage with the ROI band); the 10-location portfolio EBITDA target; and — critically — that every one of these figures is omitted from public copy and only appears in NDA-covered investor conversations and the confidential deck.

---

Section 2 · Tier 2 — Source map

Canonical documents

Document	Path	When to open
Master context brief §3	~/HiON Franchise Group Site v2/hion-context.md	Always — the brief separates public-safe from internal-only and the redline pairs each internal figure with its public-facing replacement.
Investment Deck (CONFIDENTIAL)	~/HiON Franchise Group Site v2/HiON-Investment Deck 4.6.26 (CONFIDENTIAL).pdf	Investor 1:1 prep. Primary source for the per-site EBITDA model and the leverage scenarios.
FDD Item 19	(not in repo) [CONFIRM]	Before any financial-performance representation in writing or in a sales conversation. Owner: Kevin Hein.
Capital partner term sheets / debt facility	(not in repo) [CONFIRM]	When leverage assumptions need to be defended. Owner: Bill.
Akerman redline	embedded in hion-context.md §7	Before any internal-only number gets paraphrased anywhere external.

Owners

Person	What they own for M06 questions
Bill O’Connor	The unit economic model itself. The leverage scenarios. The capital stack at the corporate level (M10). Any defense of an EBITDA, payback, or ROI number in an investor meeting.
Kevin Hein	The FDD Item 19 boundary on financial-performance representations. Whether a new number can leave M06 and appear elsewhere.
Jim Frank	The investor relationships in which these numbers are discussed.
Will Frank	Vigilance that no internal-only number drifts into a public document (web, deck distributed outside NDA, press response).
Joe Lewis	The site-level operational assumptions that feed the model (utilization, kWh dispensed per site).

Live dashboards / portals

• Partner Portal — site-level performance data that informs the model [CONFIRM admin].
• Confidential financial model file [CONFIRM location — likely Bill's working environment].

Related curriculum modules

• M02 · The market — the demand-side assumptions (EV adoption, NACS) the model rests on.
• M03 · The Tesla relationship — the Magic Dock / network share / uptime that drive site utilization.
• M04 · The Franchise product — the ~$550K investment denominator for payback math.
• M05 · The Host product — the cap-rate effect example, host-page only.
• M09 · Legal, compliance, and brand — the full Akerman redline table, including the eight redlined financial phrasings.
• M10 · Team, capital, and IR — the investor narrative arc that frames how M06’s numbers are delivered.

---

Section 3 · Tier 3 — Deep dive

3.1 — Year-3 and Year-4 EBITDA targets per site

From hion-context.md §3 (internal-only set):

• Year-3 EBITDA target per site. ~$171,275.
• Year-4 EBITDA target per site. ~$200,170.

The Year-3 to Year-4 growth (~17%) reflects continued utilization ramp at the site as the local installed EV base grows and as Tesla-app driver behavior at the location matures. These figures are per-site, not per-port. A 4-port site at $0.06/kWh combined royalty (Franchise side) generates HiON revenue independent of the franchisee’s EBITDA; the franchisee’s EBITDA is the residual after kWh-based royalty, technology fee, electricity cost, site-area maintenance, DBM allocation, insurance, and Sinking Fund contribution.

The figures live in the Investment Deck [CONFIRM page reference] and were redlined out of any public copy in the V2 → V3 transition. The replacement phrasing in any public material is (omitted) — not a hedge, not a range, omitted.

3.2 — EBITDA margin

Targeted EBITDA margin: 40%+ (hion-context.md §3).

The 40%+ margin is structurally consistent with operator-light infrastructure: low staffing, no inventory, recurring revenue tied to a unit (kWh) that’s billed automatically via the network. The closest public comparable category is tower infrastructure (cell sites, fiber huts) — also 40%+ EBITDA-margin operator-light models.

Akerman-redlined phrasing: “40%+ EBITDA margins” — removed from V2 marketing copy. Replacement: (omitted from public copy). In an NDA-covered investor meeting the 40%+ figure is on the table; in any audience outside NDA, the figure does not appear in writing, on a slide, in a press response, or in a sales call.

3.3 — Payback: unleveraged and 20%-leverage scenarios

The two scenarios from hion-context.md §3:

• Unleveraged payback. ~3.5 years.
• Payback at 20% leverage. Under 1 year. Implied ROI: 95–121%.

The leverage math is the most-discussed number in investor conversations and the most-redlined in public copy:

• V2 marketing said “3.5-year payback” and “With 20% Leverage — Payback (ROI 95–121%) — < 1 Year.” Both were redlined.
• The Akerman-compliant replacement for both: (omitted from public copy).
• In confidential investor conversations: walk both scenarios, note the assumptions (debt cost, utilization ramp, site-level capex), and let Bill defend the math.

The 95–121% ROI band reflects sensitivity to (a) utilization, (b) debt service terms, (c) per-site capex variance. A capital partner doing diligence will probe each assumption; the model file is the artifact, not a marketing slide.

3.4 — 10-location portfolio annual EBITDA target

~$2M+ annual EBITDA at the 10-location DA scale (hion-context.md §3). The math is approximately the Year-3 per-site EBITDA × the number of mature sites in the portfolio, with the year-one ramp held below maturity. A franchisee operating a fully ramped 10-location DA targets ~$2M+ in annual EBITDA against the ~$5.5M committed capital — a structurally appealing portfolio yield for a sophisticated multi-unit operator.

Akerman-redlined phrasing: ”~$2M+ Annual EBITDA” — removed from V2 marketing. Replacement: (omitted).

3.5 — Uptime: public vs internal

The split:

• Public-safe descriptor. “Designed to support high uptime; actual uptime varies by site and equipment.”
• Internal target. 98%+.

The uptime number is treated as a financial-adjacent claim because it implicitly affects revenue projections. Akerman hedged the public copy specifically to avoid creating an implied uptime guarantee. The internal 98%+ target is the operating standard; it does not appear in any host agreement or any franchisee-facing marketing.

For comparison: Tesla’s publicly disclosed network uptime is 99.9% (M02 §3.2). HiON’s site-level uptime target sits below the Tesla network number because HiON’s uptime captures site-area conditions outside the cabinet — power events at the host’s meter, weather-driven outages, contractor or vendor delays in repair response — that don’t show up in Tesla’s network-side metric.

3.6 — The cap-rate example (cross-reference to M05)

The cap-rate effect example — $120K/yr rent at 6.5% cap implies ~$1.85M asset value; with a 4-port Supercharger illustrated as a path to ~$4.2M — is the one internal-economics-adjacent figure that survives in public copy, but only on the Host page. It was removed from the Franchise page in the V3 redline (M05 §3.6).

The reason it survives on the Host page: it’s an illustration on the property owner’s asset, not on HiON’s economics. The reason it was removed from the Franchise page: the Franchise prospect doesn’t own the underlying real estate, so the asset effect doesn’t accrue to them.

This is the only internal-economics-adjacent number an executive cites publicly without Akerman review, and only in the Host-product context.

3.7 — The compliance translation table

The lookup table for what each internal-only number becomes in any public material. From hion-context.md §7:

Internal-only figure (M06)	Public-facing replacement
40%+ EBITDA margins	(omitted from public copy)
3.5-year payback / “Payback Period: ~3.5 years”	(omitted from public copy)
Specific per-site EBITDA dollar figures ($171K, $200K)	(omitted from public copy)
Cash-on-Cash ROI percentages (95–121%)	(omitted from public copy)
“With 20% Leverage — Payback (ROI 95–121%) — < 1 Year”	(omitted from public copy)
”~$2M+ Annual EBITDA”	(omitted from public copy)
“Targeting 98%+ uptime"	"On-call maintenance designed to support high uptime; actual uptime varies by site and equipment”
Cap-rate example ($1.85M → $4.2M) on Franchise page	(removed from Franchise page; remains on Host page only)

The translation rule is omit, do not hedge. “Strong unit economics” is not a substitute for “40%+ EBITDA margins”; both phrasings imply a quantification HiON is not authorized to make publicly. In any public material, the relevant line is the line is not there.

3.8 — FDD Item 19 mechanics

Item 19 of the FDD is where a franchisor may — or may not — make financial-performance representations to a prospective franchisee. HiON’s current Item 19 posture [CONFIRM with Kevin Hein] governs:

• What may be communicated to a prospective franchisee in writing (the Item 19 statement itself).
• What may be communicated to a prospective franchisee in conversation (only what tracks the Item 19 statement, with appropriate disclaimers).
• What may NOT be communicated to a prospective franchisee under any circumstance (any financial-performance representation outside the Item 19 statement).

The executive’s M06 working knowledge does not exempt them from Item 19. Internal-only numbers do not appear in sales calls to prospective franchisees, even if those calls are NDA-covered, because Item 19 governs what can be represented at all — not just what can be represented publicly. The proper path: any prospect with financial-performance questions is routed to the FDD and to a follow-up conversation that tracks the Item 19 statement, with Kevin Hein as the verifying source.

---

Section 4 · The numbers

Public-safe	Internal-only
Per-site investment ~$550K (M04)	Year-3 EBITDA per site ~$171,275
Combined royalty + tech $0.06/kWh (M04)	Year-4 EBITDA per site ~$200,170
Cap-rate example $120K rent → $1.85M → $4.2M (host page only, M05)	EBITDA margin 40%+
Uptime descriptor “designed to support high uptime; actual uptime varies by site and equipment”	Payback unleveraged ~3.5 years
Tesla network uptime 99.9% (M02)	Payback at 20% leverage <1 year
	ROI band 95–121%
	10-loc portfolio annual EBITDA ~$2M+
	Internal uptime target 98%+

The internal-only column is NOT reproduced in any public material without Kevin Hein review. The mapping to public replacements is in §3.7.

---

Section 5 · Why this matters

M06 is the module where the cost of a phrasing error is largest. Quoting an internal-only number in the wrong context is not a brand violation — it is a financial-performance representation violation, which sits inside FDD Item 19 jurisdiction and has real legal weight. The same Akerman redline that governs public marketing copy governs informal conversations that get screenshotted, slide decks distributed outside NDA, press responses, journalist interviews, podcast appearances, and casual investor introductions before paper is signed.

The Acknowledged Elephant: an executive who has internalized the unit economics may feel that “strong margins” or “fast payback” is a soft enough phrasing to pass. It is not. Akerman redlined “40%+ EBITDA margins” specifically because any quantification of the economics outside the Item 19 statement creates Item 19 exposure. The translation rule is omit, not soften.

Two specific risks worth holding in working memory:

• NDA ≠ Item 19 cover. A prospective franchisee is governed by FDD Item 19 even under an NDA. Internal-only numbers can be discussed with capital partners under NDA; they cannot be discussed with prospective franchisees outside the Item 19 statement, NDA or not.
• Investor-meeting drift into a public quote. The investor in a confidential meeting becomes a press source later. A number on a slide labeled CONFIDENTIAL is still a number that can appear in a published article. The discipline is to walk numbers verbally and let the deck do the reference.

---

Section 6 · Decision scenarios

Scenario 1 — The prospect who asks “what’s the EBITDA?”

A franchisee prospect at the discovery stage asks Joe Lewis: “What’s the typical EBITDA on one of these sites by year three?”

What does the executive say?

This is an FDD Item 19 question. The wrong answer is to quote the ~$171K figure, even informally. The right answer routes the question into the disclosure process:

“Our financial performance representations live in Item 19 of the Franchise Disclosure Document — that’s the framework franchise law uses for what we can represent and how. I’d rather walk you through Item 19 directly with the FDD in front of us than give you a number conversationally that doesn’t have the proper context. Let me get the FDD to you and we’ll set a working session — we can have Kevin Hein on the call if it’s useful for the legal framing.”

Cited basis: FDD Item 19 discipline; hion-context.md §7 (omitted from public copy applies to prospect conversations under Item 19); M06 §3.8.

Scenario 2 — The capital partner under NDA who wants the numbers

A capital partner under signed NDA asks Bill: “Walk me through your per-site economics — what’s the Year-3 EBITDA, what’s the margin, what’s the payback unleveraged and at typical debt service?”

What does the executive say?

This is the right context for the numbers. The right answer walks the model directly:

“Year-3 EBITDA target per site is approximately $171,275; Year-4 target steps up to about $200,170 as utilization matures. The model is sized around a 40%+ EBITDA margin — structurally consistent with operator-light infrastructure categories like tower infrastructure. Payback unleveraged sits around 3.5 years on the per-site model. At 20% leverage we run a payback under 1 year on a 95–121% ROI band — the range reflects sensitivity to utilization ramp, debt service terms, and per-site capex variance. The model file walks each assumption, and we can move into specifics on any line.”

Cited basis: hion-context.md §3 internal-only; Investment Deck [CONFIRM page]; under-NDA conversation is the proper context.

Scenario 3 — The journalist with the wrong number

A journalist drafting a piece writes: “HiON projects 40%+ EBITDA margins and a 3.5-year payback on its $550K-per-site Tesla franchise.”

What does the executive ask for in the correction?

Both numbers are accurate internally and both are redlined out of any public attribution to HiON. The correction:

“Two requests on the financials in the piece. We don’t make EBITDA margin or payback claims in our public materials — those numbers aren’t ours to attribute publicly. Could the line read instead: ‘HiON’s Franchise product is structured around a ~$550K per-location investment under a 10-location development agreement over 3 years.’ That captures the structural facts that are appropriate for public attribution. Happy to walk additional structural detail on a follow-up call if useful.”

Cited basis: hion-context.md §7 redline table; M06 §3.7.

Scenario 4 — The host prospect asking “what uptime will you commit to?”

A host prospect asks Will: “What uptime will you commit to in the agreement?”

What does the executive say?

This is the uptime split (§3.5). The host agreement does not include a contractual uptime guarantee, and the internal 98%+ target is not for the host to see in writing.

“The host agreement is designed to support high uptime — actual uptime varies by site and equipment, and we don’t structure the agreement with a contractual uptime guarantee. The relevant network reference is Tesla’s publicly disclosed network uptime of 99.9% — that’s the network HiON is operating on. If reliability is a critical concern for an anchor tenant, we can walk how the network’s uptime translates to driver experience at the specific site — but the language in the agreement itself isn’t a guarantee.”

Cited basis: hion-context.md §3 (internal 98%+); hion-context.md §7 (public hedge); M05 §3.7.

---

Section 7 · Common executive blind spots

1. Quoting an internal-only number in a sales call to a prospect. Consequence: FDD Item 19 exposure that’s harder to remediate than a marketing redline violation. Prevention: the prospect track always routes back to Item 19 and Kevin Hein. The 60-second answer is “let’s walk Item 19 together,” not “approximately X.”

2. “Strong margins” as a soft substitute for “40%+ EBITDA.” Consequence: the same Item 19 exposure with the additional liability that the executive cannot point to what they actually said. Prevention: the redline is omit. There is no public-safe paraphrase. The topic doesn’t appear.

3. Confidential deck circulating outside NDA. Consequence: a confidential deck distributed to a prospective franchisee, a journalist, or a casual investor becomes a permanent record of an unauthorized financial-performance representation. Prevention: the Investment Deck is NDA-only. Distribution requires an executed NDA on file with Bill. No exceptions for “warm intro” prospects.

4. Citing the 98%+ uptime in a host agreement or press response. Consequence: implied uptime guarantee; redline violation. Prevention: the public phrasing is the Akerman hedge. Internal 98%+ stays internal.

5. Confusing the cap-rate example’s permitted context. Consequence: using the $1.85M → $4.2M example in a Franchise-product conversation reintroduces a Franchise-page redlined item. Prevention: cap-rate example is Host-product, Host-page-only. Memorize the boundary.

---

Section 8 · Self-check

Pass threshold: 80%. At least three items drill the redline (per template rule for compliance-touching modules — this module is the densest).

1. State the Year-3 and Year-4 per-site EBITDA targets. (§3.1)
2. State the targeted EBITDA margin. (§3.2)
3. State both payback scenarios with the ROI band. (§3.3)
4. State the 10-location portfolio annual EBITDA target. (§3.4)
5. State the public-safe uptime descriptor verbatim, and the internal uptime target. (§3.5)
6. Redline drill. Identify and correct: “HiON franchisees see 40%+ EBITDA margins and recover their ~$550K investment in about 3.5 years — under a year with leverage.”
7. Redline drill. Identify and correct: “The per-site economics target around $200K of EBITDA by Year 4 on a portfolio that scales to $2M+ across a full development agreement.”
8. Redline drill. Identify and correct (mixed Franchise-and-Host content): “On the Franchise side, the cap-rate effect can take a property from $1.85M to $4.2M with a 4-port Supercharger added — and we target 98%+ uptime to make sure the asset value holds.”
9. What is the rule on discussing internal-only numbers with a prospective franchisee under NDA? (§5; §6 Scenario 1)
10. Scenario. Bill is briefing an investor partner over dinner — no NDA, casual intro from a mutual contact. The partner asks for “the back-of-envelope” on payback and EBITDA. Walk the routing — what does Bill say at the dinner, what does he send after, and what does he explicitly not say or send?

Answer key

1. Year-3: ~$171,275 per site. Year-4: ~$200,170 per site. (§3.1)
2. 40%+. (§3.2)
3. Unleveraged: ~3.5 years. At 20% leverage: under 1 year, with a 95–121% ROI band. (§3.3)
4. ~$2M+ per year at the 10-location DA scale. (§3.4)
5. Public: “On-call maintenance designed to support high uptime; actual uptime varies by site and equipment” (more compact: “designed to support high uptime”). Internal: 98%+. (§3.5)
6. Three redlined items in one sentence (40%+ EBITDA margins, ~3.5-year payback, “under a year with leverage”). Correct version for public attribution: “HiON’s Franchise product is structured around a ~$550K per-location investment under a 10-location development agreement over 3 years.” — drop the EBITDA, payback, and leverage claims entirely. (§3.7)
7. Two redlined items (specific per-site EBITDA dollar figure, ~$2M+ portfolio EBITDA). Correct version for public attribution: omit both. State only structural facts (10-location DA, $550K per site, $0.06/kWh combined recurring fee). (§3.7)
8. Three errors at once: (a) cap-rate example is Host-page only — using it on the Franchise side is a redline violation; (b) “we target 98%+ uptime” is internal-only and creates implied-guarantee exposure when said publicly; (c) tying the cap-rate effect to uptime conflates two unrelated things. Correct version for any public material: drop the cap-rate example from the Franchise context (use it only on the Host side per M05 §3.6); replace the uptime claim with “designed to support high uptime; actual uptime varies by site and equipment.” (§§3.5, 3.6, 3.7)
9. Internal-only numbers do not appear in sales calls to prospective franchisees, NDA or not. FDD Item 19 governs what may be represented to a prospective franchisee, and NDA is not Item 19 cover. The proper path is to route the financial-performance question to Item 19 of the FDD with Kevin Hein as the verifying source. (§5; §6 Scenario 1)
10. At the dinner: Bill does not quote internal numbers. He delivers the structural pitch — Franchise product structure ($550K per location × 10 over 3 years), the market thesis (M02), the Canvas Program position (M03), the team (M10). On the partner’s specific ask, Bill responds: “Happy to walk the unit economics in detail — let’s get an NDA signed and I’ll send the deck and set up an hour to walk the model. Casual numbers tonight wouldn’t do the model justice and we treat the specifics carefully under our FDD posture.” After the dinner: Bill sends a follow-up with the public-safe materials only — the V3 site, the public-facing Franchise and Host pages, and an NDA. Once the NDA is executed, Bill sends the Investment Deck and schedules a working session. What Bill explicitly does not say or send: any per-site EBITDA figure, any payback figure, any margin figure, the Investment Deck (without NDA), or a “ballpark” of any internal-only number.

---

Section 9 · Cross-references

Other exec curriculum modules

• M02 — market assumptions that feed the demand-side model.
• M03 — Tesla relationship that drives utilization assumptions.
• M04 — the ~$550K per-site investment that’s the payback denominator.
• M05 — the cap-rate example (the one internal-economics-adjacent number that survives in public, host-page only).
• M09 — full Akerman redline table with all eight financial redlines.
• M10 — team and capital stack; the investor narrative arc.

External documents

• hion-context.md §§3, 7
• HiON Investment Deck 4.6.26 (CONFIDENTIAL).pdf [CONFIRM page references for each figure]
• FDD Item 19 [CONFIRM current filing]
• Capital partner term sheets / debt facility [CONFIRM]

Franchisee curriculum overlap

• [M13 · FINANCE · SINKING · FUND · REPORTING](https://training.hionsuperchargers.com/curriculum/m13-finance-sinking-fund-reporting/) — Sinking Fund and reporting cadence (operator depth); Item 19 mechanics from the operator’s compliance side.

---

Section 10 · Source verification log

Claim	Current source	Primary source needed	Status	Owner
Year-3 EBITDA ~$171,275	hion-context.md §3	Investment Deck page reference + model file	unverified	Bill
Year-4 EBITDA ~$200,170	hion-context.md §3	Investment Deck page reference + model file	unverified	Bill
EBITDA margin 40%+	hion-context.md §3	Model file	unverified	Bill
Payback ~3.5 years unleveraged	hion-context.md §3	Model file	unverified	Bill
Payback <1 year at 20% leverage, 95–121% ROI	hion-context.md §3	Model file + debt facility assumptions	unverified	Bill
10-loc portfolio ~$2M+ annual EBITDA	hion-context.md §3	Model file	unverified	Bill
Internal uptime target 98%+	hion-context.md §3	Operating standard documentation	unverified	Joe Lewis
Cap-rate example economics ($120K rent / 6.5% cap / $1.85M → $4.2M with 4-port)	hion-context.md §3, site-v3/COPY.md (host page)	Underwriting source	unverified	Bill
FDD Item 19 current language	not in repo	Current FDD	unverified	Kevin Hein
Akerman redline table	hion-context.md §7	Original redline doc on file	partially verified	Kevin Hein / Will

---

Section 11 · Change log

Version	Date	Author	Changes
v0.1	2026-05-20	Claude	Initial draft. Densest redline drilling of any module.