Border Magic Logo

Border Magic

Border Magic Franchising, LLC
https://www.bordermagic.com
1-877-892-2954
2324 N. Robinson Drive, Waco, Texas 76706

Initial Investment Range

$138,215 to $226,515

Franchise Fee

$132,250 to $197,000

You will provide high-quality custom concrete curbing, trim, and edging for residential, commercial, and industrial consumers.

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Border Magic 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.

1

Franchisor Stability Risks

Start Here
Total: 10
3
2
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor, Border Magic Franchising, LLC (BMF), is in a precarious financial state. Audited financial statements in Exhibit A show a working capital deficit of over $234,000 and a total member's deficit (negative net worth) exceeding $2.2 million for 2024. The company has also posted significant net losses for the past three years. The FDD explicitly warns that this financial condition calls into question BMF’s ability to provide you with services and support.

Potential Mitigations

  • A franchise accountant must thoroughly analyze the franchisor's financial statements, including all notes, to assess its viability.
  • Discuss the implications of the negative net worth and operating losses on BMF's ability to support you with a business advisor.
  • Your attorney should evaluate any state-mandated financial assurances, like bonds or escrow, required due to this instability.
Citations: Item 21, FDD Exhibit A, Special Risks to Consider About This Franchise

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals an extremely high rate of franchisee turnover. The FDD discloses that from 2022 to 2024, the system shrank from 57 to 32 outlets. Calculations show annual franchisee churn rates from terminations, non-renewals, and other cessations have been over 20% each year. The FDD itself explicitly warns of a high "Turnover Rate," which is a significant indicator of potential systemic problems, franchisee dissatisfaction, or lack of profitability within the system.

Potential Mitigations

  • It is critical to contact a large number of former franchisees listed in Item 20 to understand why they left the system.
  • Your accountant should independently verify the turnover rate calculation and discuss its severe implications for your investment's risk profile.
  • A business advisor can help you weigh the significant risk of failure indicated by this data against any potential opportunity.
Citations: Item 20, Special Risks to Consider About This Franchise

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD package. The data in Item 20 shows that the franchise system is consistently shrinking, not growing rapidly. A franchisor expanding too quickly can strain its ability to provide adequate support to new franchisees, potentially leading to operational issues across the system. This does not appear to be a concern here; the opposite problem exists.

Potential Mitigations

  • Engaging a business advisor can help you analyze system growth trends and their implications for franchisee support.
  • Reviewing Item 20 data with an accountant is crucial to understanding whether a system is growing, stable, or shrinking.
  • Your attorney can help you ask current franchisees about the quality of support during different phases of the system's growth.
Citations: Not applicable

New/Unproven Franchise System

Medium Risk

Explanation

While the brand has existed since 2002, the current franchisor entity, BMF, was formed in 2017 and has never personally operated a Border Magic business. The system has experienced a significant decline and high turnover under this current management. This combination suggests that while the brand has history, the current franchisor's ability to successfully lead the system is unproven, which presents a notable risk to your investment.

Potential Mitigations

  • Your business advisor should help you heavily scrutinize the performance of the system specifically under the current ownership.
  • Contacting franchisees who have been in the system both before and after the 2017 ownership change is crucial for due diligence.
  • Your attorney can help you question the franchisor about their strategy to reverse the negative trends.
Citations: Item 1, Item 2, Item 20, Item 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The business model, which involves providing custom concrete curbing and edging, is a niche but established part of the broader landscaping and home services industry. It does not appear to be based on a short-lived trend or fad, which would pose a risk to long-term viability once consumer interest wanes.

Potential Mitigations

  • It is wise to research the long-term market demand for the proposed services with a business advisor.
  • An accountant can help you analyze the financial sustainability of the business model beyond any current market trends.
  • Your attorney should review the franchise term to ensure it aligns with a business that has long-term potential.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. Item 2 indicates that the key executives have several years of experience within this specific franchise system or its affiliate, as well as direct experience in the landscaping industry. Therefore, a lack of management experience does not appear to be a primary risk factor, although the poor performance under their leadership is a separate, significant concern.

Potential Mitigations

  • A business advisor can help you vet the backgrounds of the franchisor's key management personnel.
  • Speaking with current franchisees can provide insight into their perception of the management team's competence and support.
  • Your attorney can help you understand the roles and responsibilities of the executives as described in Item 2.
Citations: Not applicable

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 does not indicate that BMF is owned by a private equity firm. Ownership appears to be held by private individuals or their holding companies. Private equity ownership can sometimes lead to a focus on short-term profits over the long-term health of the franchise system, but this specific risk does not seem to apply here.

Potential Mitigations

  • Your attorney should help you verify the ownership structure detailed in Item 1 of the FDD.
  • A business advisor can help you research the ownership group and their track record with other businesses.
  • Discussing any ownership changes with long-term franchisees can provide valuable context during due diligence.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. The franchisor discloses its affiliate, Boulder Designs Franchising, LLC, and its predecessor, Mogavero Investments, LLC, in Item 1. There is no indication of an undisclosed parent company whose financials or history would be material to your decision. All disclosed entities appear to be part of the same management group.

Potential Mitigations

  • Having an attorney review the corporate structure described in Item 1 is important to identify all related entities.
  • If a parent company is involved, your accountant should confirm that its financial statements are provided if required.
  • A business advisor can help you understand the relationships between the franchisor, its affiliates, and any parent company.
Citations: Not applicable

Predecessor History Issues

Medium Risk

Explanation

Item 1 discloses that the current franchisor acquired the system's assets in 2017 after a prior acquisition in 2015. This history of asset transfers, combined with the subsequent and significant decline in the number of outlets and profitability issues under current ownership, presents a risk. It suggests potential instability or inherited challenges that have not been successfully resolved, impacting the system's overall health.

Potential Mitigations

  • Your attorney should review the history of the franchise system and its transfers as disclosed in the FDD.
  • A business advisor can help you assess how the system's performance has changed under different ownership structures.
  • It is advisable to ask long-term franchisees about their experiences through the various ownership changes.
Citations: Item 1, Item 3, Item 20

Pattern of Litigation

High Risk

Explanation

Item 3 discloses litigation that presents a significant risk. Notably, the franchisor's affiliate, which shares key management, was sued by a former franchisee for claims including fraud and deceptive trade practices. This case resulted in a settlement where the affiliate paid the former franchisee $60,000 plus attorneys' fees. A pattern of litigation, especially franchisee-initiated lawsuits alleging fraud that result in a payout, is a serious red flag about the franchisor's practices and system health.

Potential Mitigations

  • A thorough review of the details of all disclosed litigation with your franchise attorney is essential.
  • Treat any history of franchisee-initiated lawsuits alleging fraud or misrepresentation as a critical warning sign.
  • Your business advisor can help you assess how this litigation pattern reflects on the franchisor-franchisee relationship and overall system risk.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
3
1
11

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
5
4
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
2
5

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
3
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.

6

Regulatory & Compliance Risks

Total: 10
4
5
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.

7

Franchisor Support Risks

Total: 4
2
2
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.

8

Operational Control Risks

Total: 12
4
8
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.

9

Term & Exit Risks

Total: 18
10
8
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.

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.