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Blue Nose
How much does Blue Nose cost?
Initial Investment Range
$10,340 to $79,600
Franchise Fee
$9,700 to $74,300
BlueNose Franchising, LLC sells franchises in which the franchisee will operate a service business offering aerial drone photography services.
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Blue Nose January 31, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
Blue Nose Franchising, LLC (Blue Nose) explicitly warns of its financial condition as a special risk. Audited financials show the company had negative net worth at year-end 2023, indicating technical insolvency. Its recent profitability appears heavily dependent on new franchise sales rather than ongoing royalties from a stable, successful system. Multiple states have imposed financial assurance requirements, such as deferring your initial fees, due to this financial weakness, which presents a significant risk to you.
Potential Mitigations
- Your accountant must conduct a thorough review of the audited financial statements, including all footnotes, to assess the company's viability and reliance on franchise fees.
- Discuss the implications of the negative equity and state-imposed financial assurances with your franchise attorney.
- Ask the franchisor to provide a clear plan for achieving sustainable profitability from ongoing operations, a topic your business advisor can help you explore.
High Franchisee Turnover
High Risk
Explanation
The FDD discloses extremely high franchisee turnover. In 2022 and 2023, the system experienced churn rates (terminations plus cessations for other reasons) of approximately 45% and 52% respectively. This means nearly half the franchisees left the system each of those years. Such a high rate of departures is a critical red flag, strongly suggesting systemic problems, a potentially unprofitable business model for franchisees, or significant franchisee dissatisfaction, creating extreme risk for your investment.
Potential Mitigations
- A discussion with your business advisor is essential to understand the severe implications of such high turnover rates.
- It is critical to contact a large number of the former franchisees listed in Item 20 to understand why they left the system.
- Your attorney should help you formulate questions for the franchisor to explain the specific reasons behind this high level of franchisee failure and departure.
Rapid System Growth
Medium Risk
Explanation
In 2024, the franchise system more than doubled in size, growing from 19 to 39 units. This rapid expansion, especially following two years of massive franchisee churn, raises concerns about Blue Nose's ability to provide adequate support. The franchisor has a very small operational history and its founder is not working full-time on the business. This growth may strain limited resources, potentially compromising the quality of training and ongoing assistance available to you.
Potential Mitigations
- In discussions with current franchisees, you should specifically inquire about the quality and responsiveness of franchisor support since this recent growth spurt.
- A business advisor can help you question the franchisor about their specific plans and infrastructure for supporting a rapidly expanding system.
- Your accountant should review the financials to determine if Blue Nose has reinvested its franchise fee revenue into strengthening its support systems.
New/Unproven Franchise System
High Risk
Explanation
Blue Nose is a very young franchisor, having only started offering franchises in late 2020. The system lacks a long-term track record of success, and the extremely high franchisee failure rates disclosed in Item 20 for 2022 and 2023 indicate the business model is not yet proven to be stable or sustainable for its franchisees. Investing in such a new system carries a significantly higher risk of business failure compared to more established brands.
Potential Mitigations
- Given the system's high failure rate, it is crucial that your accountant develops extremely conservative financial projections.
- A frank discussion with your business advisor about the heightened risks of investing in an unproven system is necessary.
- Your attorney should help you conduct deep due diligence on the viability of the business model by speaking with former franchisees.
Possible Fad Business
Low Risk
Explanation
The business operates in the aerial drone services industry. While this is a growing field with legitimate applications in real estate, construction, and agriculture, its long-term market dynamics are still evolving. This business model may face risks from rapid technological change, shifting regulations, and increasing competition from independent operators. You should consider the long-term sustainability beyond current demand.
Potential Mitigations
- Engage a business advisor to research the long-term market trends and competitive landscape for drone photography services in your specific area.
- Question the franchisor on their plans for innovation and adaptation to stay ahead of technological and market changes.
- Developing a flexible business plan with your financial advisor that can adapt to industry shifts is a prudent step.
Inexperienced Management
Medium Risk
Explanation
The founder and managing member, Tanner Harris, has been a full-time airline pilot since 2018, concurrent with founding and running this franchise system. While he has industry experience, the fact that he may not be dedicated full-time to the franchisor's business presents a risk. Managing a rapidly growing franchise system, especially one with a history of high franchisee turnover, requires significant attention that may be compromised by other professional commitments.
Potential Mitigations
- You should directly ask the franchisor about the founder's time commitment and the management structure in place to support franchisees.
- A business advisor can help you assess whether the support staff and systems are robust enough to function effectively without the founder's full-time presence.
- In your discussions with current franchisees, specifically ask about management accessibility and the effectiveness of the support team.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Some franchise systems are owned by private equity firms, which may prioritize short-term returns over the long-term health of the brand and its franchisees. This can sometimes lead to increased fees, reduced support, or pressure to use certain vendors to maximize profits for the ownership group before they sell the company.
Potential Mitigations
- It is always a good practice to ask your attorney to verify the full ownership structure of the franchisor entity.
- If private equity ownership is discovered, a business advisor can help you research the firm's reputation and track record with other franchise brands.
- Speaking with franchisees who have been with a system before and after a private equity acquisition can provide valuable insight.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. The FDD must disclose any parent companies, and if the franchisor is a thinly capitalized subsidiary, the parent's financial statements may also be required. A failure to disclose a parent company can hide the true financial stability and control structure of the franchise system, preventing a full risk assessment.
Potential Mitigations
- Your attorney can help you verify the franchisor's corporate structure and identify any undisclosed parent or controlling entities.
- An accountant's review of the provided financials can sometimes reveal transactions or relationships that suggest the influence of an undisclosed parent.
- Always ask the franchisor to confirm its complete ownership structure in writing.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package, as Blue Nose states it has no predecessors. When a franchisor acquires a business from a predecessor, the FDD must disclose that history. An incomplete disclosure could hide inherited problems, such as a history of litigation, bankruptcy, or high franchisee turnover under the previous owner, giving you an incomplete picture of the system's historical challenges.
Potential Mitigations
- If a franchisor has a predecessor, your attorney should carefully review Items 1, 3, and 4 for a complete history.
- A business advisor can assist you in conducting independent research on a predecessor's track record and reputation.
- Asking long-term franchisees about their experience under any previous ownership is a key due diligence step.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package, as Blue Nose discloses no litigation in Item 3. A pattern of lawsuits filed by franchisees against a franchisor alleging fraud, misrepresentation, or breach of contract is a significant red flag. It can indicate systemic problems with the franchisor's sales process, business model, or fulfillment of its obligations, suggesting a higher risk of disputes and dissatisfaction.
Potential Mitigations
- It is crucial to have your attorney carefully review the details of any disclosed litigation in Item 3.
- If litigation is present, speaking with current and former franchisees can provide context beyond the formal legal descriptions.
- A high volume of lawsuits, particularly those initiated by franchisees, should be discussed in detail with your legal counsel.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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.
