1-800-Plumber Logo

1-800-Plumber

1-800-Services, LLC
https://www.1800plumber.com
1-281-766-8535
1331 Broadway Street, Suite J, Pearland, Texas 77581

Initial Investment Range

$123,730 to $327,040

Franchise Fee

$55,050 to $95,700

1-800-Services, LLC is offering franchises for the establishment of businesses specializing in providing plumbing products and services, and heating, ventilation, and air conditioning (HVAC) products and services to residential and commercial customers under the name and mark 1-800-Plumber.

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1-800-Plumber May 14, 2024 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
1
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

1-800-Services, LLC (1-800-Services) explicitly discloses its financial condition as a special risk. The audited financials in Item 21 show a significant net loss in 2022 and very low members' equity ($135k) relative to total liabilities ($2.3M) at year-end 2023. This raises questions about the franchisor's financial stability and its ability to support franchisees long-term, especially given its reliance on initial franchise fee revenue as shown in the financial statements.

Potential Mitigations

  • Engaging a franchise accountant to meticulously analyze the franchisor's financial statements, including cash flow and debt levels, is essential.
  • Discuss with your business advisor the potential impacts of the franchisor's financial condition on their ability to provide promised support and grow the brand.
  • Your attorney should review any state-mandated financial assurances, like fee deferrals, mentioned in the addenda to understand their protections.
Citations: Item 4, Item 21, FDD page 4

High Franchisee Turnover

High Risk

Explanation

Item 20 data from 2023 reveals an exceptionally high franchisee turnover rate. With a starting base of 36 franchised outlets, there were 8 terminations and 10 cessations for other reasons, totaling 18 exits. This represents a 50% annual turnover, a significant indicator of potential systemic issues, franchisee dissatisfaction, or lack of profitability within the system. Such a high rate suggests a substantial risk to your potential investment success.

Potential Mitigations

  • It is critical to contact a significant number of former franchisees from the list in Attachment G to understand their reasons for leaving the system.
  • Your accountant should analyze the multi-year turnover trends in Item 20 to assess if this is a recurring problem.
  • Discuss the specific reasons for this high turnover directly with the franchisor, with your attorney present to evaluate the responses.
Citations: Item 20, FDD page 53

Rapid System Growth

High Risk

Explanation

The system is experiencing rapid growth, with the number of franchised outlets increasing from 13 to 44 in three years. While growth can be positive, when combined with the franchisor's disclosed financial condition and very low equity, it raises concerns. Rapid expansion can strain a franchisor's resources, potentially leading to inadequate support, training, and quality control for all franchisees as the system scales.

Potential Mitigations

  • Question the franchisor on how they plan to scale their support infrastructure to match the rapid unit growth; a business advisor can help assess their plans.
  • Interview a mix of new and established franchisees to gauge the current quality and responsiveness of franchisor support.
  • Your accountant should review the franchisor's financial statements to determine if they have sufficient capital to support this expansion.
Citations: Item 20, Item 21

New/Unproven Franchise System

High Risk

Explanation

1-800-Services has a relatively short operating history, having begun franchising in 2017. The FDD explicitly lists "Short Operating History" as a special risk. An unproven system carries higher risks related to the viability of the business model, brand recognition, and the franchisor's ability to provide effective long-term support. Your investment success is tied to a system that is still in its early stages of development and market validation.

Potential Mitigations

  • A business advisor can help you conduct extensive due diligence on the long-term viability of the business model.
  • Given the higher risk, your attorney may be able to negotiate more favorable terms, such as better protections or reduced fees.
  • Speak with the earliest franchisees on the Item 20 list to understand the system's evolution and the franchisor's performance over time.
Citations: Item 1, Item 2, FDD page 4

Possible Fad Business

Low Risk

Explanation

The plumbing and HVAC service industry is well-established and not considered a fad. The business model provides essential home and commercial services with consistent demand. The franchisor's history, evolving from a family plumbing business established in 1983, further suggests a stable industry presence rather than a temporary trend. Therefore, this specific risk was not identified in the FDD package.

Potential Mitigations

  • Engage a business advisor to research the long-term stability and competitive landscape of the local plumbing and HVAC market.
  • Your accountant can help you analyze the business model's resilience against economic fluctuations.
  • Discuss the franchisor's strategies for innovation and staying competitive within this established industry.
Citations: Item 1, Item 11

Inexperienced Management

Low Risk

Explanation

This risk was not identified. Item 2 indicates that the key principals of 1-800-Services, such as Mark Collins and Dennis Collins, have extensive, long-term experience in the plumbing and HVAC industry, stemming from a family business that dates back decades. This direct industry experience is a positive factor, as management is familiar with the core business operations. However, you should still assess their experience in managing a franchise system specifically.

Potential Mitigations

  • A business advisor can help you evaluate the management team's experience in scaling and supporting a national franchise network.
  • Discuss management's vision and strategic plans for the franchise system with them directly.
  • Inquire with current franchisees about their perception of management's competence and the quality of support they provide.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This specific risk was not identified in the FDD. Item 1 indicates the franchisor, 1-800-Services, is owned by The Shaded Oak Group, LLC, and the management appears to be stable and involved long-term. There is no disclosure of outside private equity ownership. However, it is important to understand that the franchisor has the right to sell the franchise system in the future to any buyer, including a private equity firm.

Potential Mitigations

  • Your attorney should review the assignment clause in the Franchise Agreement to understand your rights if the system is sold.
  • Discuss with a business advisor the potential impact on operations if a new owner, such as a private equity firm, were to acquire the franchise system.
  • Research the ownership structure of the parent company, Shaded Oak Group, LLC, for any potential outside investor influence.
Citations: Item 1, Item 17

Non-Disclosure of Parent Company

Medium Risk

Explanation

The franchisor discloses its parent company, The Shaded Oak Group, LLC. However, the FDD does not include the parent company's financial statements. While this may be compliant with FTC rules if the parent does not guarantee the franchisor's obligations, it limits your ability to fully assess the financial strength behind the franchisor entity, which itself has a weak balance sheet. The parent company's stability and resources remain an unknown variable.

Potential Mitigations

  • Your accountant should assess the franchisor's standalone financials to determine if they can operate without parent support.
  • An attorney can help you inquire about the financial health of the parent company and its commitment to supporting the franchise system.
  • Consider asking for a parent company guarantee of the franchisor's obligations, which would require disclosure of their financials.
Citations: Item 1, Item 21

Predecessor History Issues

Low Risk

Explanation

This risk was not identified as a major concern. Item 1 discloses that the franchisor acquired assets from a predecessor, 1-800-Plumber, Inc., which operated from 2009 to 2012. While this indicates a past iteration of the business ceased operations, the current franchisor has been operating since 2015 and franchising since 2017. The key risk is less about the predecessor's history and more about the current franchisor's own short operating history and financial condition.

Potential Mitigations

  • An attorney can help investigate the history of the predecessor entity and the reasons for its cessation.
  • Focus due diligence with your business advisor on the current franchisor's performance and track record since 2017.
  • Ask current long-term franchisees about any continuity or changes between the predecessor and the current system.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This specific risk was not identified. Item 3 of the FDD states, "No litigation is required to be disclosed in this Item." This indicates there is no recent history of material litigation involving the franchisor, its predecessors, or key management that would allege fraud, misrepresentation, or similar claims. The absence of such litigation is a positive indicator, but does not eliminate all business risks.

Potential Mitigations

  • Your attorney can conduct an independent public records search to verify the absence of significant litigation.
  • While no litigation is disclosed, continue to perform thorough due diligence by speaking with current and former franchisees.
  • Maintain open communication with the franchisor and consult your attorney immediately if you become aware of any future legal disputes.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
5
2
8

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
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

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4

Legal & Contract Risks

Total: 16
7
6
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.

5

Territory & Competition Risks

Total: 5
1
2
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.

6

Regulatory & Compliance Risks

Total: 10
4
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.

7

Franchisor Support Risks

Total: 4
2
1
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.

8

Operational Control Risks

Total: 12
2
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.

9

Term & Exit Risks

Total: 18
10
6
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.

10

Miscellaneous Risks

Total: 2
2
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.