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Arrayskin Therapy

The Array Group, LLC
https://arrayskin.com/
1-213-669-5151
26932 Oso Parkway, Suite 202, Mission Viejo, CA 92691

How much does Arrayskin Therapy cost?

Initial Investment Range

$175,290 to $399,090

Franchise Fee

$55,000

The franchisee will manage a medical dermatology clinic specializing in the treatment of various autoimmune skin conditions using an advanced, effective phototherapy treatment.

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Arrayskin Therapy March 11, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 22, 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 warns that its financial condition “calls into question [its] financial ability to provide services and support to you.” The audited financial statements in Exhibit I confirm this, showing very low members' equity of only $18,726 as of year-end 2024 and a history of losses and financial restatements. This may impact its ability to support your business or invest in the brand, posing a significant risk to your investment.

Potential Mitigations

  • A franchise accountant should meticulously review the franchisor’s financial statements, including all notes and the recent restatement, to assess its viability.
  • Discussing the franchisor's capitalization and plans for funding its support obligations with your financial advisor is crucial.
  • Your attorney should inquire about whether any financial assurances, like a performance bond, have been required by state regulators.
Citations: Item 21, Exhibit I, Special Risks to Consider About This Franchise

High Franchisee Turnover

Low Risk

Explanation

Item 20 data shows no franchisee terminations, non-renewals, or other cessations of business for the period reviewed. While positive, this data may have limited predictive value because the franchise system is very new, having only started franchising in 2022 with only four franchised outlets open as of year-end 2024. High turnover often takes several years to manifest in a new system. Item 20 also discloses the use of confidentiality clauses, which could limit what former franchisees say.

Potential Mitigations

  • Your business advisor can help you monitor future FDDs for any changes in turnover rates as the system matures.
  • Speaking with all current franchisees listed in Item 20 is essential to understand their satisfaction levels and the support they receive.
  • An attorney can help you frame questions for franchisees, particularly regarding the impact of any confidentiality provisions.
Citations: Item 20

Rapid System Growth

Medium Risk

Explanation

The franchise system is new and projects continued growth. While Item 20 shows controlled growth so far, the franchisor's very weak financial position, as noted in Item 21 and the 'Special Risks' section, raises concerns about its ability to scale its support infrastructure adequately. Rapid growth without sufficient capital to hire support staff and develop resources could strain the system and leave you without the assistance you need to succeed.

Potential Mitigations

  • A business advisor can help you question the franchisor about their specific, funded plans for scaling support services to match outlet growth.
  • It is important to ask current franchisees about the quality and responsiveness of the support they are currently receiving.
  • An accountant's review of the financials can help assess if the franchisor has the capital to support its growth plans.
Citations: Item 20, Item 21, Item 11

New/Unproven Franchise System

High Risk

Explanation

The franchisor, The Array Group, LLC (Array Group), is an emerging system, having been formed in late 2021 and starting to franchise in 2022. The FDD explicitly highlights its “limited operating history” as a special risk. While its affiliate has operated clinics since 2011, the franchisor itself has a short track record in providing franchisee support. Investing in a new system carries higher risk due to unproven support systems, minimal brand recognition, and potential instability.

Potential Mitigations

  • A thorough investigation of the management team's direct experience in successfully managing a franchise system should be conducted with your business advisor.
  • Engaging an accountant to scrutinize the franchisor's financial statements is critical to assess its capitalization and long-term viability.
  • Your attorney can help you interview the first few franchisees to learn about their experiences with the new system's support.
Citations: Item 1, Item 2, Item 20, Item 21, Special Risks to Consider About This Franchise

Possible Fad Business

Low Risk

Explanation

The business operates in the medical services industry, specifically phototherapy for skin conditions. This market is established and not typically considered a fad. However, the success of your specific clinic will depend on local market demand, competition from other dermatology practices, and your ability to establish relationships with referring physicians and navigate the complex healthcare landscape.

Potential Mitigations

  • Conducting local market research with a business advisor is essential to validate demand and understand the competitive landscape.
  • Assessing the long-term viability of the specific treatment modalities offered and the franchisor's plans for innovation is recommended.
  • A discussion with your accountant can help you model the financial resilience of the business to shifts in healthcare reimbursement or local competition.
Citations: Item 1, Item 11

Inexperienced Management

Medium Risk

Explanation

The management team listed in Item 2 has extensive experience operating the affiliate-owned clinics since 2011, indicating strong industry and operational knowledge. However, their experience in managing a franchise system and supporting independent franchisees is very recent, as the franchisor entity was only formed in 2021. Supporting franchisees is a different skill set than running company-owned locations, which presents a potential risk regarding the quality and effectiveness of franchise-specific support.

Potential Mitigations

  • It is wise to ask the management team about any franchise-specific training or consultants they have engaged to build their support systems.
  • Speaking with the initial franchisees about the quality of training and ongoing support they have received is a crucial due diligence step.
  • Your business advisor can help you evaluate whether the described support infrastructure in Item 11 appears robust for a growing system.
Citations: Item 2, Item 1

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. There is no disclosure in Item 1 indicating that the franchisor is owned or controlled by a private equity firm. This type of ownership can be a concern because PE firms may prioritize short-term returns over the long-term health of the franchise system, potentially leading to increased fees or reduced franchisee support.

Potential Mitigations

  • It is always a good practice to ask about the franchisor's long-term ownership structure and plans during due diligence.
  • A business advisor can help you research the ownership structure of the franchisor for any potential PE involvement not immediately apparent.
  • Having an attorney review the franchisor's assignment rights in the Franchise Agreement helps you understand who could own the system in the future.
Citations: Not applicable

Non-Disclosure of Parent Company

High Risk

Explanation

The FDD discloses that an affiliate, Array Management, LLC, owns the intellectual property and has a longer operating history. However, the franchisor entity, The Array Group, LLC (Array Group), is a separate, newer entity with very weak financials. The FDD does not disclose a parent company or any guarantee from the more established affiliate for the franchisor's performance. You are contracting with the newer, financially weaker entity, which is a significant risk.

Potential Mitigations

  • Your attorney should clarify the legal and financial relationship between the franchisor and its affiliate, Array Management, LLC.
  • An accountant must analyze the franchisor's standalone financial statements, as you will be in contract with that specific entity.
  • Inquiring about any formal support or guarantee agreements between the affiliate and the franchisor is a key due diligence question for your attorney to ask.
Citations: Item 1, Item 21, Item 13

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 does not disclose any predecessors for The Array Group, LLC (Array Group). A predecessor is a company from which the franchisor acquired the main assets of the business. Full disclosure of any predecessor's history, including litigation or bankruptcy, is required for a complete risk assessment.

Potential Mitigations

  • Confirming the franchisor's history and ensuring there are no undisclosed predecessors is a due diligence step your attorney can assist with.
  • It's good practice to ask the franchisor directly about the origin of their business system and intellectual property.
  • A business advisor can help you research the history of the brand and its founders for any prior business activities under different names.
Citations: Item 1, Item 3, Item 4

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states that there is no litigation that requires disclosure. A pattern of lawsuits, especially those initiated by franchisees alleging fraud or misrepresentation, can be a major red flag indicating systemic problems. The absence of such litigation is a positive sign, although it is expected for a very new franchise system.

Potential Mitigations

  • Even with no disclosed litigation, you should ask current franchisees about any disputes or disagreements they may have had with the franchisor.
  • Your attorney can conduct an independent search for litigation against the franchisor or its principals as a final check.
  • It is wise to have a business advisor help you review future FDDs to monitor for any emerging patterns of litigation as the system grows.
Citations: Item 3
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
3
4
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

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4

Legal & Contract Risks

Total: 16
7
5
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

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5

Territory & Competition Risks

Total: 5
2
2
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.

6

Regulatory & Compliance Risks

Total: 10
8
0
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.

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
9
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.

10

Miscellaneous Risks

Total: 2
1
1
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.