Explanation

The franchisor has not exhibited excessively rapid growth in recent years; in fact, Item 20 data shows the system has been shrinking. Therefore, the specific risks associated with a support infrastructure being outpaced by overly rapid expansion were not identified as a primary concern in this FDD package. A shrinking system presents its own set of distinct challenges.

Potential Mitigations

• In any franchise, it is prudent to ask a broad range of existing franchisees about the current quality and responsiveness of the franchisor's support.
• A business advisor can help you evaluate whether the franchisor's current staffing and resources are appropriate for the existing system size.
• Reviewing the franchisor's financial statements with an accountant can provide insight into their investment in franchisee support services.

Explanation

This risk was not identified. Blaze Pizza, LLC (BP) began franchising in May 2012 and has operated for over a decade. The FDD discloses a substantial operating history with hundreds of outlets. Therefore, it is not considered a new or unproven system. However, prospective franchisees should still perform thorough due diligence on the brand's current market position and long-term viability.

Potential Mitigations

• A business advisor can help you assess the franchisor's track record and the maturity of its systems and brand recognition in your target market.
• It is wise to speak with long-term franchisees to understand how the system has evolved and the consistency of franchisor support over time.
• Engaging an attorney to review the entire FDD is crucial for understanding the complete history and structure of the franchise.

Explanation

This risk was not identified. The fast-casual, build-your-own pizza concept has been an established part of the restaurant industry for a number of years and does not appear to be based on a short-lived fad. The franchisor has been in business since 2012, indicating a degree of market staying power. However, any restaurant concept is subject to changing consumer tastes and competitive pressures.

Potential Mitigations

• Assessing the long-term market demand for fast-casual pizza in your specific area with a business advisor is a sound practice.
• Evaluating the franchisor’s plans for menu innovation and brand adaptation can provide insight into their long-term strategy.
• Consider the sustainability of the business model and its resilience to economic shifts with your financial advisor.

Explanation

This risk was not identified. The executives detailed in Item 2 appear to have significant prior experience in the restaurant and franchise industries, with backgrounds at major brands like Focus Brands, Cici's Pizza, and P.F. Chang's. While there has been some recent turnover in key positions (CEO, CFO, CDO), the management team as a whole does not appear to lack relevant industry experience. However, new leadership could change the company's direction.

Potential Mitigations

• It is always wise to thoroughly vet the management team's background and specific experience in managing a franchise system of this type.
• Speaking with existing franchisees about their confidence in the current leadership team can provide valuable perspective.
• A business advisor can help you research the recent performance of the brands where the executives previously worked.

Explanation

This risk was not identified. The FDD's Item 1 clearly discloses the parent company, Blaze Pizza Holdings, LLC, and its ultimate private equity controllers. Furthermore, Item 21 includes the audited financial statements for the parent company, and Exhibit K provides a full guarantee of the franchisor's obligations by the parent. This level of transparency appears to meet disclosure requirements.

Potential Mitigations

• A franchise attorney should always verify that the parent company's financial statements are provided when a franchisor is a subsidiary.
• It is crucial for an accountant to review the parent's financial statements, as they reflect the ultimate financial health backing the franchise.
• Your attorney should confirm that any guarantee from the parent is unconditional and covers all of the franchisor's obligations to you.

Explanation

This risk was not identified in the FDD. Item 1 states that the franchisor has no predecessors that must be disclosed. The company, Blaze Pizza, LLC, appears to have operated under its current structure or as PYR Pizza, LLC since its inception in 2011, without acquiring the system from a prior entity. Therefore, risks associated with a hidden or negative predecessor history are not applicable here.

Potential Mitigations

• A franchise attorney should always verify the corporate history detailed in Item 1 for any mention of predecessors or asset acquisitions.
• In any franchise investment, speaking with long-tenured franchisees can help confirm the operational history of the brand.
• A business advisor can assist in researching public records to confirm the franchisor's corporate lineage if there are any doubts.

Explanation

This risk was not identified. Item 3 discloses one concluded class action lawsuit initiated by a consumer regarding gift card redemption policies in California. It does not disclose a pattern of litigation initiated by franchisees against the franchisor alleging fraud, misrepresentation, or other systemic issues. The absence of such a pattern is a positive indicator, though you should remain aware that disputes can arise in any system.

Potential Mitigations

• Your attorney should always carefully review the nature, allegations, and outcomes of any litigation disclosed in Item 3.
• It is wise to ask current franchisees about the general relationship with the franchisor and the prevalence of disputes.
• A business advisor can help you conduct public record searches for litigation involving the franchisor that may not have been required to be disclosed.