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Appell

Appell Franchising, LLC
https://appellstriping.com
1-631-757-1099
2183 Megan Circle, Ogden, Utah 84403

How much does Appell cost?

Initial Investment Range

$105,450 to $274,200

Franchise Fee

$74,500 to $182,000

We franchise the right to operate a single “Appell” franchised business focused on providing proprietary parking lot maintenance and striping products and services, primarily for businesses, but also for industrial and residential facilities, with a lifetime guarantee, and other products and services we may authorize for sale in the future.

Enjoy our partial free risk analysis below

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Appell April 21, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 19, 2025

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

1

Franchisor Stability Risks

Start Here
Total: 10
2
3
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor, Appell Franchising, LLC (Appell LLC), is a new entity and its 2024 financial statements show a heavy dependence on initial franchise sales for revenue (over 82%) rather than ongoing royalties. This model may not be sustainable and could suggest that the franchisor's financial health depends on selling new franchises rather than supporting existing ones. Additionally, a single franchisee accounted for 46% of 2024 revenues, indicating significant concentration risk.

Potential Mitigations

  • A franchise accountant should analyze the franchisor's financial statements, paying close attention to revenue sources and cash flow sustainability.
  • Discuss the franchisor's long-term financial strategy and plans to increase royalty-based revenue with your business advisor.
  • It is wise to ask your attorney about the implications of the high franchisee revenue concentration on the overall system's stability.
Citations: Item 21, FDD Exhibit A (Statements of Income)

High Franchisee Turnover

Medium Risk

Explanation

Item 20 data reveals that one franchisee was terminated in 2024. For a very new system that ended the year with only eight operating franchises, any terminations are a significant concern. This early turnover could indicate potential issues with the business model, franchisee profitability, or the support provided by the franchisor, representing a notable risk to new investors.

Potential Mitigations

  • You should make every effort to contact the terminated franchisee listed in Exhibit C to understand the reasons for their departure.
  • Discuss the circumstances surrounding any franchisee terminations with the franchisor directly.
  • Your franchise attorney can help you formulate appropriate questions for both the franchisor and former franchisees about this turnover.
Citations: Item 20 (Table 3)

Rapid System Growth

Medium Risk

Explanation

The system is experiencing extremely rapid growth, expanding from three to eight franchised units in 2024, with projections to sign 39 more in the next fiscal year. While growth can be positive, such a rapid expansion for a new franchisor may strain its capacity to provide adequate site selection, training, and ongoing operational support to all franchisees, potentially diluting the quality of assistance you receive.

Potential Mitigations

  • A conversation with your business advisor about the franchisor's infrastructure for scaling support is advisable.
  • Inquiring with recent franchisees about their experience with the timeliness and quality of franchisor support is a crucial step.
  • Your accountant can assess if the franchisor's financial reinvestment in support systems seems adequate for the projected growth.
Citations: Item 20 (Table 1), Item 20 (Table 5)

New/Unproven Franchise System

High Risk

Explanation

Appell LLC was formed in February 2023 and only began franchising in April 2023. With fewer than ten operating franchises at the end of 2024, the franchise system is new and its long-term viability is unproven. Investing in an emerging system carries higher risks, including underdeveloped operational systems, minimal brand recognition, and a lack of an established track record of franchisee success.

Potential Mitigations

  • Conducting extensive due diligence on the principals' industry and franchising experience with your business advisor is critical.
  • It is essential to speak with the initial franchisees listed in Item 20 to learn about their experiences and challenges.
  • Your accountant should carefully assess the franchisor's capitalization to ensure it has sufficient funds to support the system as it grows.
Citations: Item 1, Item 20

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The business model, focused on parking lot maintenance and striping, is a long-standing service-based industry. It does not appear to be based on a short-term trend or fad, suggesting a more stable market demand. This is generally a positive factor for long-term business viability.

Potential Mitigations

  • To confirm the stability of the business concept, consider researching the industry's historical trends and future outlook with your business advisor.
  • An accountant can help you analyze the financial resilience of similar service businesses through different economic cycles.
  • Legal counsel can review the franchise agreement to ensure there are no unusual dependencies on fleeting trends or technologies.
Citations: Not applicable

Inexperienced Management

Medium Risk

Explanation

While the company's founders have extensive experience in the parking lot striping industry, the franchisor entity itself is very new (formed in 2023). The partners from Cornerstone Franchise Partners bring franchising experience, but the management team as a collective unit for this specific brand is unproven. Operating a franchise system requires different skills than operating a service business, presenting a potential risk in the quality and execution of franchisee support.

Potential Mitigations

  • Inquiring with the earliest franchisees about their direct experiences with the management team's support and guidance is recommended.
  • Your business advisor can help you assess how the management team's combined experience translates to supporting a franchise network.
  • Have your attorney review the franchisor's stated obligations in Item 11 to ensure support commitments are clearly defined.
Citations: Item 1, Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. The ownership structure detailed in Item 1 consists of the founders and their affiliated companies. There is no indication that the franchisor is owned or controlled by a private equity firm. This can be a positive, as it may suggest a focus on long-term brand health over short-term investor returns.

Potential Mitigations

  • Your attorney can help you confirm the ownership structure by reviewing corporate records if there are any ambiguities.
  • Engaging a business advisor to understand the typical implications of different ownership structures in franchising can be educational.
  • You should always ask the franchisor about any potential plans for future sales of the company.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 appears to disclose the key parent and affiliate companies involved in the franchise system, including the entity that owns the intellectual property. There is no indication that a controlling parent company or its financial information has been omitted.

Potential Mitigations

  • Your attorney can review the corporate structure disclosed in Item 1 to ensure it appears complete and logical.
  • If the franchisor is a subsidiary, consulting with an accountant to review the provided financials for signs of dependency on a parent is a good practice.
  • It is prudent to ask the franchisor to clarify the roles and relationships of all affiliated entities.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. A predecessor company, APLS Franchising, LLC, is disclosed in Item 1. However, there is no negative history such as litigation or bankruptcy associated with this predecessor in Items 3 and 4. The transition to the current franchisor entity appears to be a restructuring rather than an attempt to escape past issues.

Potential Mitigations

  • A discussion with your attorney can help clarify the legal history and relationship between the predecessor and the current franchisor.
  • You might ask the franchisor for more details about the reason for the change in corporate entities.
  • If possible, asking early franchisees about their experience during the transition can provide valuable insight.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 explicitly states that there is no litigation that requires disclosure. The absence of lawsuits alleging fraud, misrepresentation, or significant disputes with franchisees is a positive indicator for a new franchise system.

Potential Mitigations

  • Your attorney can conduct a public records search to independently verify the absence of significant litigation.
  • A conversation with your business advisor can help you understand what types of litigation are common in franchising.
  • Including questions about any informal disputes when you speak with current franchisees is a prudent due diligence step.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
5
4
6

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
6
3
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.

4

Legal & Contract Risks

Total: 16
9
3
4

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
2
1
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
3
3
4

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
3
7
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.

9

Term & Exit Risks

Total: 18
10
7
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.

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.