Explanation

This risk was not identified in the FDD package. Item 20 data does not show a high rate of franchisee terminations, non-renewals, or other cessations. High turnover can be a significant red flag, potentially indicating systemic problems like a flawed business model, franchisee dissatisfaction, or lack of profitability. A stable franchise system generally has a low rate of turnover, suggesting franchisees are finding success and support within the system.

Potential Mitigations

• Although turnover appears low, asking former franchisees on the Item 20 list why they left the system can provide valuable insights; your attorney can help frame questions.
• It is wise to have your accountant help you calculate the annual turnover rates from Item 20 data to confirm the system's stability.
• A discussion with your business advisor can help you compare the disclosed turnover rates with available industry benchmarks for context.

Explanation

This risk was not identified in the FDD package. While the franchise system shows steady growth in the number of outlets according to Item 20, the pace of growth does not appear to be so rapid as to suggest the franchisor's support infrastructure is over-strained. Uncontrolled, explosive growth can sometimes dilute the quality of training, site selection assistance, and ongoing operational support, which can be detrimental to both new and existing franchisees.

Potential Mitigations

• Asking a range of both new and established franchisees about the current quality and responsiveness of franchisor support can provide valuable perspective.
• An analysis of the franchisor's financial statements with your accountant can help determine if they are adequately investing in support infrastructure to match growth.
• Engage a business advisor to assess whether the franchisor’s management team and support systems are sufficiently scalable for its growth plans.

Explanation

This risk was not identified in the FDD package. 101 Mobility Franchise Systems, LLC (101 Mobility) began offering franchises in 2010 and has an established operational history, as disclosed in Items 1 and 20. New or unproven franchise systems can present higher risks due to the lack of a track record, underdeveloped support systems, and minimal brand recognition. Established systems, by contrast, typically have more refined processes and greater brand awareness.

Potential Mitigations

• Review the business experience of the current management team in Item 2 with your business advisor to assess their expertise in franchising and the industry.
• Contacting franchisees who have been with the system for many years can offer deep insights into its evolution and stability.
• Your attorney can help you verify the franchisor’s history and structure as presented in Item 1.

Explanation

This risk does not appear to be present. The business provides mobility and accessibility equipment, a sector supported by long-term demographic trends such as an aging population, rather than a short-lived fad. A business based on a fad carries the risk of a sharp decline in consumer interest after an initial peak, potentially leaving franchisees with a non-viable business and a binding long-term contract after the trend has passed.

Potential Mitigations

• A business advisor can help you research the long-term market demand and competitive landscape for mobility and accessibility products.
• Investigate the company’s commitment to research and development with your financial advisor to gauge its ability to adapt to new technologies and market needs.
• Your attorney should review the franchisor’s obligations to evolve the system to maintain its market relevance.

Explanation

While the franchisor has operated since 2010, several key executives, including the President, have been in their roles for a relatively short time (since 2023 or 2024). Although their prior experience appears relevant, new leadership can sometimes introduce changes in strategy, culture, or operational focus. The risk level is moderated by the length of time the franchise system has been operating and the franchise experience listed for some executives.

Potential Mitigations

• Speaking with current franchisees about their experiences with the management team, particularly since the recent leadership changes, is highly recommended.
• A thorough review of the executive team's backgrounds in Item 2 with your business advisor can help assess their collective experience in this industry.
• During your own discussions with the franchisor, inquire about the leadership team's vision and long-term strategy for the brand.

Explanation

This risk was not identified in the FDD. Item 1 clearly discloses the parent companies, up to the ultimate parent, Mobility HoldCo, LP, and the notes to the financial statements in Item 21 discuss the controlling entity. Failing to disclose a parent company, especially if it guarantees obligations or is a key supplier, would be a major disclosure violation, as it would obscure the true financial backing and control structure of the franchise system.

Potential Mitigations

• Your attorney can verify the corporate structure disclosed in Item 1 to ensure all parent and affiliate relationships are clear.
• When a parent company is disclosed, it is important for your accountant to review any provided financial statements or guarantees from that parent.
• Understanding the full corporate family with a business advisor helps assess where key decisions are made and where financial strength truly lies.

Explanation

This risk was not identified in the FDD package. Item 1 states that the franchisor does not have any predecessors. A predecessor is a company from which the franchisor acquired a major portion of its assets. When a predecessor exists, it is important to scrutinize its history for any negative information, such as litigation, bankruptcy, or high franchisee turnover, as these could indicate inherited problems within the system you are joining.

Potential Mitigations

• Your attorney can help you confirm the accuracy of the predecessor information disclosed in Item 1.
• In cases with predecessors, it is critical to ask long-term franchisees about their experiences under the prior ownership.
• A business advisor can assist in researching the public record of any predecessor companies for potential red flags.

Explanation

This risk was not identified. Item 3 discloses only a single lawsuit between the franchisor and a former franchisee, which does not constitute a pattern. A pattern of litigation, particularly cases initiated by franchisees alleging fraud, misrepresentation, or breach of contract, can be a serious warning sign of systemic issues with the franchisor's sales practices, support obligations, or overall business model. Constant litigation can also be a significant drain on the franchisor's financial and managerial resources.

Potential Mitigations

• It is still advisable for your attorney to review the details of any disclosed litigation to understand the nature of the dispute and its outcome.
• Independent online searches for news articles or discussions related to the franchisor can sometimes uncover litigation not yet required to be disclosed.
• Asking current franchisees about their awareness of any disputes within the system can provide additional context.