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How much does Altitude Trampoline Park cost?
Initial Investment Range
$1,625,000 to $2,957,500
Franchise Fee
$50,000
We offer franchises for distinctive recreational entertainment facilities featuring trampolines, obstacle courses, and other recreational activities, and offering and selling other related products and services under the “Altitude Trampoline Park®” name and marks.
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Altitude Trampoline Park March 31, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The audited financial statements for ATP Franchising, LLC (ATP) show a significant net loss of ($1,486,857) for the fiscal year ending December 31, 2024. This is a sharp reversal from net income in the previous two years. The balance sheet also reveals a large accumulated deficit and substantial cash advances to its parent company. These factors indicate potential financial instability, which could impact ATP's ability to support you and grow the brand effectively.
Potential Mitigations
- Your accountant must conduct a deep analysis of the audited financial statements, focusing on the reasons for the recent net loss and the implications of the intercompany cash transfers.
- A business advisor can help you assess whether the franchisor has sufficient capital and cash flow to meet its future support obligations without relying on new franchise sales.
- Consulting with your attorney about the potential impact of franchisor financial weakness on your investment is a critical step.
High Franchisee Turnover
High Risk
Explanation
Item 20 data from 2022 to 2024 indicates a notable level of franchisee churn. In 2024, five franchises left the system through non-renewal, cessation of operations, or reacquisition by the franchisor, representing a 7.6% churn rate based on the starting number of units. The 2022 churn rate was higher at 11.4%. Exhibit D-2 also lists five franchisees who failed to open in 2024, suggesting potential issues in the development pipeline.
Potential Mitigations
- With your business advisor, you should contact a significant number of former franchisees listed in Exhibit D-2 to understand their reasons for leaving the system.
- Have your accountant analyze the turnover data across all three years to identify any negative trends in franchisee success or satisfaction.
- It is important to discuss the specific circumstances behind the reacquisitions and ceased operations with the franchisor.
Rapid System Growth
Medium Risk
Explanation
While system growth was not extreme in 2024, the combination of a significant financial loss for the franchisor and the fact that over half of the franchisees did not provide complete financial data for the Item 19 report raises concerns. This situation suggests that ATP's resources might be strained, potentially affecting its ability to provide adequate support to both new and existing locations as the system expands.
Potential Mitigations
- Engaging a business advisor to question the franchisor about their specific plans to scale support infrastructure is a prudent measure.
- You should speak with a broad sample of franchisees, especially newer ones, to gauge the current quality and responsiveness of franchisor support.
- Your accountant should review the franchisor's financial statements to assess if they possess the resources necessary to support ongoing growth.
New/Unproven Franchise System
Low Risk
Explanation
This risk was not identified in the FDD package. The franchisor and its predecessors have been franchising since 2016 and had 69 franchised parks in the U.S. at the end of 2024. A new or unproven system carries higher risks because its business model, brand recognition, and support infrastructure are not well-established, making franchisee success less predictable.
Potential Mitigations
- A discussion with your business advisor can help you evaluate the maturity and stability of any franchise system you consider.
- Your accountant should always review the franchisor's financial history to assess its track record and sustainability.
- It is wise to ask your attorney to review the length of time the franchisor has been in business and offering franchises.
Possible Fad Business
Low Risk
Explanation
The business is centered on indoor trampoline parks, a segment of the recreational entertainment industry. The FDD notes this is a "developing but highly competitive market." While established for several years, such concepts can be sensitive to changing consumer tastes and entertainment trends. There is a risk that long-term demand could wane, potentially impacting profitability even if you remain bound by your 10-year franchise agreement.
Potential Mitigations
- Working with a business advisor to conduct independent market research on the long-term outlook for trampoline parks in your specific area is recommended.
- You should ask the franchisor about their strategies for innovation and evolving the concept to maintain relevance over the next decade.
- An accountant can help you model different revenue scenarios, including potential declines, to stress-test the financial viability of the investment.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD package. Item 2 details the backgrounds of the executive team, showing extensive experience in the franchise industry with various well-known brands. Inexperienced management can be a significant risk, as it may lead to flawed strategies, weak operational systems, and inadequate franchisee support, undermining the value of the franchise.
Potential Mitigations
- Engaging a business advisor to help you vet the experience of any franchisor's management team is a crucial due diligence step.
- You should always ask existing franchisees about the competence and responsiveness of the franchisor's leadership.
- Your attorney can help you understand the management structure and the roles of key executives.
Private Equity Ownership
Medium Risk
Explanation
The franchisor is majority-owned by NRD Partners II, L.P., a private equity fund. This ownership structure can introduce risks, as private equity firms may prioritize short-term financial returns for their investors over the long-term health of franchisees. This could potentially lead to decisions like cutting support services to reduce costs, increasing fees, or a quick sale of the franchise system, creating uncertainty for you.
Potential Mitigations
- A business advisor can help you research the private equity firm's reputation and track record with its other franchise brands.
- You should ask franchisees who have been in the system since before the PE acquisition about any changes in culture or support.
- Your attorney should analyze the franchisor's right to sell the system and what protections, if any, you have in such an event.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 clearly outlines the franchisor's parent companies up to the controlling private equity fund. Failure to disclose a parent company can be a serious issue, as it may hide the true financial backing, control structure, or potential liabilities of the entity you are contracting with, preventing a full risk assessment.
Potential Mitigations
- Your attorney should always verify the corporate structure disclosed in Item 1 to ensure all parent and affiliate entities are properly identified.
- If a parent company guarantees the franchisor's obligations, an accountant must review the parent's financial statements.
- A business advisor can help investigate the roles and influence of any parent companies on the franchise system.
Predecessor History Issues
Medium Risk
Explanation
Item 1 discloses the franchisor's predecessors. Item 3 details concluded litigation against these predecessors involving significant allegations. These cases include claims of breach of contract and fraud, which resulted in large settlement payments to a franchisee and an agent. While these disputes involved the prior owners, they are part of the system's history and may indicate underlying issues that could persist.
Potential Mitigations
- Your attorney should carefully review the details of any litigation involving predecessor companies to understand historical issues.
- Discussing the transition from the predecessor with long-term franchisees can provide insight into what changes have occurred.
- A business advisor can help you assess whether the current management has effectively addressed the problems that led to past disputes.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses several pending lawsuits. While most are customer injury claims common in this industry, there is a pending arbitration initiated by a franchisee, Bedrock Property Solutions, LLC. This franchisee alleges negligent misrepresentation, fraudulent inducement, and breach of contract for failure to provide support against the current franchisor. Such direct claims from a franchisee about the sales process and support obligations are a significant red flag.
Potential Mitigations
- A thorough review of the specific allegations in the franchisee-initiated arbitration with your attorney is critical to understanding the claims.
- You should consider this pending litigation a serious warning sign and discuss its potential implications for the franchisor's practices with your legal advisor.
- Engage your business advisor to help you ask direct questions to the franchisor about this specific dispute.
Disclosure & Representation Risks
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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Financial & Fee Risks
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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Legal & Contract Risks
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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Territory & Competition Risks
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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Regulatory & Compliance Risks
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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Franchisor Support Risks
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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Operational Control Risks
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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Term & Exit Risks
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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Miscellaneous Risks
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.