1 Tom Plumber Logo

1 Tom Plumber

1 Tom Plumber Global Inc.
https://www.1tomplumber.com
1-855-832-6866
5300 Dupont Circle, Suite A, Milford, Ohio 45150

Initial Investment Range

$515,719 to $2,796,495

Franchise Fee

$50,000

1 Tom Plumber Global Inc. offers franchises to operate a 1-Tom-Plumber® plumbing business focused on emergency plumbing services and repairs at commercial and residential properties.

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1 Tom Plumber April 1, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: July 16, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
4
2
4

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor's audited financial statements reveal a significant risk. As of year-end 2024, 1 Tom Plumber Global Inc. (1 Tom Plumber) had a negative shareholder's equity of over $777,000. Furthermore, a massive prior period adjustment of over $1 million was made in 2024 due to errors in previous years' financials. This negative equity and history of material accounting errors suggest potential financial instability and weak internal controls, which could impact the franchisor's ability to support you.

Potential Mitigations

  • Your accountant must conduct a thorough review of the franchisor's financial statements, including all footnotes and the prior period adjustment, to assess its viability.
  • Discuss the franchisor's plan to address its negative equity and improve financial controls with your business advisor.
  • An attorney should review any state-mandated financial assurances, such as bonds or escrow requirements, that may be in place due to this financial condition.
Citations: Item 21, FDD Exhibit F

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a very high rate of franchisee turnover. In 2024, there were 5 terminations out of a starting base of 23 franchised units, representing a termination rate of nearly 22%. This figure is a significant red flag and may indicate systemic problems within the franchise, such as lack of profitability, franchisee dissatisfaction, or issues with the business model or franchisor support. This level of turnover introduces substantial risk to your potential investment.

Potential Mitigations

  • It is imperative to contact a significant number of the former franchisees listed in Item 20, especially those who were terminated, to understand their experiences.
  • A business advisor can help you analyze the turnover data across all three years to identify any persistent negative trends.
  • You should directly question the franchisor about the reasons for this high termination rate, and an attorney can help frame these critical questions.
Citations: Item 20

Rapid System Growth

High Risk

Explanation

The franchise system is undergoing extremely rapid expansion. The number of franchised units grew from 2 at the start of 2022 to 37 by the end of 2024. When combined with the franchisor's disclosed financial weakness, this rapid growth rate creates a risk that its support infrastructure, including training and operational assistance, may not be able to keep pace. This could lead to a dilution in the quality of support you receive.

Potential Mitigations

  • Engaging a business advisor to question the franchisor about their specific plans for scaling support staff and systems is highly recommended.
  • You should contact a wide range of existing franchisees, from the newest to the most tenured, to inquire about the current quality and responsiveness of franchisor support.
  • Have your accountant review the franchisor's allocation of capital to determine if sufficient funds are being invested in support infrastructure versus expansion.
Citations: Item 20

New/Unproven Franchise System

High Risk

Explanation

The franchisor, 1 Tom Plumber, is a relatively new and unproven entity, formed in January 2020 and beginning to franchise in October 2020. While key personnel have some industry experience, the franchising entity itself has a short track record and does not operate any of its own units. This, combined with its weak financial position, increases the risk of investing in a system that may still be refining its model and support systems, which could impact your success.

Potential Mitigations

  • A thorough due diligence investigation, with the help of a business advisor, into the franchisor's operational systems and the experience of its management team is crucial.
  • It is essential to speak with the earliest franchisees listed in Item 20 to gauge the evolution of the support and systems since inception.
  • Your attorney may be able to negotiate more favorable terms, such as enhanced support guarantees, to compensate for the higher risk associated with a new system.
Citations: Items 1, 2, 20, 21

Possible Fad Business

Low Risk

Explanation

This specific risk was not identified in the FDD package. A fad business is one tied to a fleeting trend, which can threaten long-term viability after public interest wanes. Even if the business is not a fad, it's crucial to assess whether the concept has sustainable consumer demand and a plan for evolving with the market, as your contractual obligations will continue regardless of shifts in popularity.

Potential Mitigations

  • Your business advisor can help you conduct independent market research to assess the long-term consumer demand for the services offered.
  • Review the franchisor's history and plans for innovation and service development to gauge their commitment to long-term relevance.
  • An accountant should assist you in evaluating the business model's resilience to economic shifts and changing consumer tastes.
Citations: Items 1, 11

Inexperienced Management

Medium Risk

Explanation

The franchisor entity, 1 Tom Plumber, was formed in 2020, and its President was a student prior to the brand's creation in 2017. While the Chairman has other business experience, the FDD does not detail extensive experience specifically in managing a franchise system of this scale. Investing in a system with management that may be learning franchising on the job can pose risks related to the quality of strategic decisions, system development, and franchisee support.

Potential Mitigations

  • Asking the franchisor directly about the franchising experience of their key support staff can provide important insights.
  • It is important to discuss the quality and sophistication of the operational support and training with a range of current franchisees.
  • A business advisor can help you assess whether the management team's skills are well-suited to managing a rapidly growing franchise network.
Citations: Items 1, 2, 11

Private Equity Ownership

Low Risk

Explanation

This specific risk was not identified in the FDD package. Franchisors owned by private equity firms can sometimes prioritize short-term investor returns over the long-term health of franchisees. This can manifest as cuts in support, increased fees, or a quick sale of the system. Understanding the ownership structure is key to anticipating the franchisor's strategic priorities.

Potential Mitigations

  • Your attorney can help you research the franchisor's ownership structure and the track record of any parent investment company.
  • It is wise to ask existing franchisees if they have noticed any changes in support or focus if ownership has recently changed.
  • A business advisor can help you evaluate the potential impact of the franchisor's ownership structure on its long-term strategy.
Citations: Not applicable

Non-Disclosure of Parent Company

Medium Risk

Explanation

This FDD discloses that the franchisor is a wholly owned subsidiary of 1 Tom Plumber Brand Inc. (Parent). However, the Parent's financial statements are not provided, and the Parent does not guarantee the franchisor's performance. You are relying solely on the financial health of the subsidiary franchisor, which, as noted, has a significant negative net worth. This structure limits your visibility into the overall financial health of the controlling entity.

Potential Mitigations

  • Your accountant should analyze the franchisor's financials with the understanding that there is no disclosed financial backing from the parent company.
  • An attorney can help you inquire about the relationship and flow of funds between the franchisor and its parent company.
  • A business advisor can assist in researching the parent company's history and general business reputation.
Citations: Items 1, 21

Predecessor History Issues

Low Risk

Explanation

Item 1 notes that the brand originated with a predecessor company, 1 Tom Plumber LLC. While the FDD discloses this relationship, it is crucial to understand that the performance and practices of the current franchisor entity may differ from its predecessor. You are contracting with 1 Tom Plumber Global Inc., and its own limited operating and financial history is what presents the most direct risk.

Potential Mitigations

  • Your attorney should carefully review the information on the predecessor to ensure all required historical data, like past litigation, has been disclosed.
  • When speaking with long-term franchisees, a business advisor can help you ask about their experiences under both the predecessor and the current franchisor.
  • Focus your financial analysis with your accountant on the performance of the current franchisor entity, as its stability is most critical.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This specific risk was not identified in the FDD package. Item 3 discloses that there is no material litigation required to be reported. The absence of litigation, particularly claims of fraud or breach of contract brought by other franchisees, is a positive indicator. However, it does not guarantee future disputes will not arise.

Potential Mitigations

  • Your attorney should still review the dispute resolution clauses in Item 17 to understand the process should a conflict occur.
  • A business advisor can help you formulate questions for current franchisees about their general satisfaction and any non-litigated disputes they may have had.
  • It is prudent to have your accountant help you budget for a legal contingency fund, even in the absence of disclosed litigation.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
5
3
7

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
5
5
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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4

Legal & Contract Risks

Total: 16
4
5
7

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

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5

Territory & Competition Risks

Total: 5
3
2
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

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6

Regulatory & Compliance Risks

Total: 10
4
4
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
1
3
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
6
5
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
8
7
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 1
1
0
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.