All Dry Logo

All Dry

AD2019 Franchise, LLC
https://www.alldryfranchise.com
1-561-800-4902
582 US Hwy 1, Tequesta, FL 33469

Initial Investment Range

$105,899 to $596,950

Franchise Fee

$49,500 to $334,500

The franchise is to operate a business under the trade name “All Dry” that provides disaster restoration services and cleanup services, including fire damage restoration, smoke damage restoration, flood damage restoration, storm damage restoration, biohazard removal, leak detection, mold cleanup and inspection, sewage cleanup, odor removal, and trauma and crime scene cleanup.

Enjoy our complimentary free risk analysis below

Unlock the full risk analysis to access 9 more categories covering 100+ risks.

All Dry June 20, 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
3
2
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor explicitly discloses 'Financial Condition' as a special risk. Audited financials show high liabilities relative to equity and reliance on non-liquid assets like prepaid broker fees. While profitable in 2023, the balance sheet structure suggests a potential weakness in the franchisor's ability to provide long-term support or withstand financial stress, which could impact you directly.

Potential Mitigations

  • A thorough review of the audited financial statements, including all footnotes, with your accountant is critical to assess the company's financial stability.
  • Ask the franchisor to explain their capitalization strategy and how they plan to support the system's obligations long-term, and discuss these answers with your financial advisor.
  • Your attorney should verify if any state has required the franchisor to post a bond or establish an escrow account due to its financial condition.
Citations: Item 21, Exhibit D, Special Risks to Consider About This Franchise

High Franchisee Turnover

High Risk

Explanation

The FDD reveals a very high rate of franchisee turnover. Item 20 data for 2023 shows a total of 21 exits (14 terminations and 7 ceased operations) from a starting base of 116 units, representing an approximate 18% annual turnover rate. Such a high number is a significant red flag that may indicate systemic problems, such as franchisee unprofitability or dissatisfaction.

Potential Mitigations

  • It is imperative to contact a significant number of former franchisees listed in Item 20 to understand their reasons for leaving the system.
  • Your accountant should model the potential financial impact if your business performs similarly to those that have exited.
  • Discuss the high turnover rate directly with the franchisor and evaluate the credibility of their explanation with your business advisor.
Citations: Item 20 (Tables 1, 3)

Rapid System Growth

Medium Risk

Explanation

Item 20 data shows the system grew from just 2 franchised outlets at the start of 2021 to 116 by the start of 2023. This extremely rapid growth can strain a franchisor's ability to provide adequate site selection, training, and ongoing operational support to all franchisees. The high turnover rate seen in 2023 may be an indicator that support systems did not keep pace with growth.

Potential Mitigations

  • In discussions with current franchisees, specifically ask about the quality and timeliness of the support they received during and after the period of rapid growth.
  • Question the franchisor on how they have scaled their support infrastructure to manage this large number of new units, a point to review with your business advisor.
  • Your accountant can review recent financials to see if spending on franchisee support has kept pace with system growth.
Citations: Item 20

New/Unproven Franchise System

High Risk

Explanation

The franchisor explicitly lists 'Short Operating History' as a special risk, having only started franchising in January 2020. Investing in a young system carries higher risks, including the possibilities of an unproven business model, underdeveloped support systems, and minimal brand recognition. The high franchisee turnover disclosed in Item 20 further underscores the risks associated with this emerging system.

Potential Mitigations

  • Conducting extensive due diligence on the backgrounds of the management team is crucial, a task your business advisor can help with.
  • Your attorney might be able to negotiate more franchisee-favorable terms to compensate for the higher risk associated with a new system.
  • Have your accountant create financial projections with very conservative assumptions, given the lack of a long-term performance track record.
Citations: Item 1, Item 20, Special Risks to Consider About This Franchise

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The business provides disaster restoration services, which is an established, needs-based industry rather than one based on a short-term trend or fad. This stability can be a positive factor for long-term business viability.

Potential Mitigations

  • Your business advisor can still help you research long-term industry trends and competitive pressures to ensure a solid business plan.
  • An accountant should assist in developing financial models that account for local market demand and potential economic cycles.
  • Discuss the company's long-term vision and plans for innovation with the franchisor.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. Item 2 indicates that key personnel have operated an affiliated 'All Dry' business since 2014 and have other relevant industry experience. While their experience in franchising is more recent (since 2020), their operational experience in the core business appears to be established.

Potential Mitigations

  • It is still wise to verify the management's reputation and track record by speaking with current and former franchisees.
  • A business advisor can help you assess whether the management team's skills align with the support and leadership a growing franchise system needs.
  • Your attorney can review the franchisor's obligations in Item 11 to ensure they are clearly defined, regardless of management experience.
Citations: Not applicable

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 does not disclose any parent entity, and the ownership structure does not appear to involve a private equity firm. The business appears to be founder-led, which can have its own set of risks and benefits.

Potential Mitigations

  • With your attorney, it is still prudent to confirm the ownership structure and inquire about any future plans for sale of the company.
  • A business advisor can help you research the typical strategic priorities of founder-led versus PE-owned franchise systems.
  • Discussing the long-term vision for the company with the founders can provide insight into their commitment.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 clearly states that the franchisor, AD2019 Franchise, LLC, does not have any parent entities. The FDD includes financial statements for the franchising entity itself as required.

Potential Mitigations

  • Your attorney should always confirm the legal structure of the franchisor entity and any affiliates mentioned in Item 1.
  • An accountant should verify that the provided financial statements in Item 21 correspond to the correct franchising legal entity.
  • In your due diligence calls, you can ask other franchisees about their understanding of the corporate structure.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 of the FDD states that the franchisor has no predecessors. This means the entity offering the franchise has not acquired substantial assets from another company that operated a similar business, simplifying the due diligence process regarding historical performance or issues.

Potential Mitigations

  • Your attorney should still review Item 1 carefully to confirm the franchisor's formation date and history.
  • It is good practice to ask the franchisor about the history of the brand and concept, even if there is no legal predecessor.
  • A business advisor can help you research the history of the key individuals involved, as disclosed in Item 2.
Citations: Not applicable

Pattern of Litigation

Medium Risk

Explanation

While Item 3 discloses no litigation, a footnote in the audited financial statements (Note 8) reveals a legal settlement with five franchisees in February 2023. This involved a significant cash payment plus ongoing obligations. The presence of this settled dispute, while not meeting the formal disclosure threshold for Item 3, suggests a history of significant franchisee dissatisfaction that led to legal action.

Potential Mitigations

  • Your attorney must review the details of the litigation mentioned in the financial statement footnotes and ask the franchisor for more context.
  • This finding makes it especially critical to speak with current and former franchisees about their relationship with the franchisor.
  • A business advisor can help you assess whether the issues that led to the lawsuit appear to be systemic or isolated.
Citations: Item 21 (Exhibit D, Note 8)
2

Disclosure & Representation Risks

Total: 15
7
1
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

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

3

Financial & Fee Risks

Total: 0
0
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.

4

Legal & Contract Risks

Total: 0
0
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.

5

Territory & Competition Risks

Total: 0
0
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.

6

Regulatory & Compliance Risks

Total: 0
0
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.

7

Franchisor Support Risks

Total: 0
0
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.

8

Operational Control Risks

Total: 0
0
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.

9

Term & Exit Risks

Total: 0
0
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.

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.