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Breakaway BA

Breakaway BA, LLC
https://www.breakawayba.com
1-503-941-0888
22467 SW Ash St, Sherwood, Oregon 97140

How much does Breakaway BA cost?

Initial Investment Range

$10,500 to $34,500

Franchise Fee

$0

Our franchisees offer accounting, bookkeeping, business consulting, and related services (but not tax preparation services) to businesses and individuals.

Enjoy our partial free risk analysis below

Unlock the full risk analysis to access 9 more categories covering 100+ risks.

Breakaway BA April 4, 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's audited financial statements for 2024 reveal a net loss of ($6,024) and a negative net worth of ($1,618). A 'Special Risks' section explicitly highlights the franchisor's financial condition. Furthermore, a note to the financials discloses that an affiliate provides office space and labor at no charge, suggesting the financial situation may be weaker than presented. This condition could impact the franchisor's ability to provide support or sustain operations.

Potential Mitigations

  • A thorough review of the financial statements, including all footnotes, with your accountant is essential to assess the franchisor's viability.
  • Discuss the implications of the negative net worth and reliance on affiliate support with a business advisor.
  • Your attorney should clarify if any financial assurances, such as a bond or escrow, are required by your state due to this financial condition.
Citations: Item 21, FDD Exhibit A, Special Risks

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a pattern of franchise cessations. In the last three years, 6 out of a base that grew from 8 to 17 franchises have 'ceased operations for other reasons'. This represents a significant annual churn rate (e.g., 25% in 2022). Such a trend, especially in a young system, could be an indicator of potential issues with franchisee profitability, satisfaction, or the overall business model, posing a considerable risk to your investment.

Potential Mitigations

  • It is critical to contact former franchisees listed in Item 20 to understand why they ceased operations; your attorney can help formulate questions.
  • Your accountant should help you analyze the turnover data as a percentage of the total system size each year.
  • Engaging a business advisor can help you weigh the risks of joining a system with this level of early-stage franchisee churn.
Citations: Item 20

Rapid System Growth

Medium Risk

Explanation

The system has grown rapidly, doubling its number of franchised units in the most recent year (from 17 to 34). While growth can be positive, such a rapid expansion rate in a new system could strain the franchisor's resources. This may potentially impact the quality and availability of essential training, support, and operational guidance for all franchisees, including you.

Potential Mitigations

  • Question the franchisor on their specific plans to scale support infrastructure to match this rapid growth, with guidance from a business advisor.
  • It is important to ask recent and older franchisees about their experiences with the quality and timeliness of franchisor support.
  • Your accountant can assess if the franchisor's financial statements reflect sufficient investment in support infrastructure.
Citations: Item 20

New/Unproven Franchise System

High Risk

Explanation

The franchisor began offering franchises in 2020, making it a young and relatively unproven system. The business model, while in a developed market, lacks a long-term track record of success for its franchisees. Investing in a new system carries higher intrinsic risk regarding brand recognition, the refinement of operational systems, and the franchisor's ability to provide sustained, effective support as it matures.

Potential Mitigations

  • A business advisor can help you conduct extensive due diligence on the long-term viability of the business model.
  • A deep discussion with the earliest franchisees about their journey and the evolution of franchisor support is crucial.
  • Your attorney may be able to negotiate more franchisee-favorable terms to help offset the risks associated with an emerging brand.
Citations: Items 1, 2, 20, 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD Package. The business of accounting and bookkeeping services is a well-established industry with consistent demand, not typically considered a fad. However, it's always wise to assess if the franchisor's specific methods or niche focus could be tied to a short-term trend that might not have long-term market sustainability.

Potential Mitigations

  • A business advisor can help you research the long-term demand for the specific service niche offered by the franchise.
  • Discuss the franchisor's strategies for innovation and adaptation to market changes with your financial advisor.
  • Evaluate the sustainability of the business model beyond any current technological or market trends.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 2 indicates that the management team has prior experience in public accounting and related business fields. However, as a prospective franchisee, you should still evaluate whether their specific experience translates effectively to managing and supporting a national franchise system, which requires a different skill set than running an independent practice.

Potential Mitigations

  • A discussion with current franchisees about the quality of management's support and strategic direction would be insightful.
  • Your business advisor can help you assess whether the leadership's experience is adequate for the challenges of scaling a franchise network.
  • Directly question the management team about their franchising philosophy and support strategies.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package, as there is no disclosure of the franchisor being owned by a private equity firm. Franchisees should generally be aware that ownership changes can occur. A sale to a PE firm in the future could alter the franchisor's priorities, potentially shifting focus from long-term brand health to short-term investor returns.

Potential Mitigations

  • Your attorney should review any clauses in the Franchise Agreement that discuss the franchisor's right to sell or assign the system.
  • In discussions with the franchisor, you might inquire about their long-term ownership plans.
  • A business advisor can provide context on how PE ownership can impact franchise systems.
Citations: Item 1

Non-Disclosure of Parent Company

Medium Risk

Explanation

Item 1 discloses that BREAKAWAY BOOKKEEPING & ADVISING, LLC is the parent company. Item 21 and its notes state the franchisor is a wholly-owned subsidiary and its financials are consolidated into the parent's tax return. Crucially, the parent provides key services at no charge, which affects the franchisor's standalone financials. However, the parent company's own financial statements are not provided, which could obscure a complete picture of the overall enterprise's financial health.

Potential Mitigations

  • Your accountant should carefully analyze the provided financials in light of the parent company's support.
  • An attorney should advise if, under these circumstances, parent company financials might be required for a full risk assessment.
  • Discuss the financial stability and commitment of the parent company with the franchisor, guided by your business advisor.
Citations: Item 1, Item 21, FDD Exhibit A

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 states that the franchisor has no predecessors that are required to be disclosed. This means the franchisor did not acquire the system from a prior entity. Your due diligence will therefore focus entirely on the history and performance of the current franchisor entity since its inception in 2020.

Potential Mitigations

  • Your attorney can confirm that there are no undisclosed predecessors through public records searches.
  • A business advisor can help you focus your due diligence on the current management team and their track record.
  • Discussing the company's founding and history with the franchisor is still a valuable exercise.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 3 states that no litigation is required to be disclosed. The absence of litigation against the franchisor, particularly claims of fraud or misrepresentation from other franchisees, is a positive factor. However, this should be considered in the context that it is a very young franchise system with a limited operating history.

Potential Mitigations

  • Your attorney can conduct independent searches for litigation that may not have met the criteria for disclosure in Item 3.
  • It is still critical to speak with current and former franchisees about their experiences and any disputes they may have had.
  • A business advisor can help you maintain a balanced view, recognizing that the lack of litigation is positive but not a guarantee of future performance.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
4
0
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

Unlock Full Risk Analysis

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3

Financial & Fee Risks

Total: 10
1
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

Purchase the complete risk review to see all 102 risks across all 10 categories.

4

Legal & Contract Risks

Total: 16
3
6
7

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
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
4
3
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.

7

Franchisor Support Risks

Total: 4
0
2
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.

8

Operational Control Risks

Total: 12
2
6
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.

9

Term & Exit Risks

Total: 18
4
8
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

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 1
1
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.