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How much does The Budlong cost?
Initial Investment Range
$134,650 to $2,464,000
Franchise Fee
$35,000 to $38,000
As a The Budlong® franchisee, you will operate a quick service restaurant brand serving specialty spicy fried chicken and sandwiches, sides, desserts, beverages, and other related food and beverage items.
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The Budlong April 30, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 19, 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
The Budlong Franchise Nevada LLC's (Budlong) audited financial statements show it is a startup entity formed in 2023 with no operating history or revenue as of year-end 2024. Its assets consist almost entirely of a loan to a related party, funded by owner contributions. This lack of an established financial track record presents a significant risk, as the franchisor's ability to support you and grow the brand is unproven and dependent on continued funding.
Potential Mitigations
- An experienced franchise accountant must review the financials for both the franchisor and its parent company to assess overall financial stability and capitalization.
- It is crucial to ask the franchisor about its funding sources and long-term financial plan with the help of your business advisor.
- Consult with your attorney regarding the potential need for a performance bond or fee escrow given the franchisor's startup status.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified, as the franchisor is a new system and had no franchised outlets operating during the last three years, according to Item 20. High franchisee turnover in an established system can be a major red flag, often signaling issues with profitability, support, or the business model itself. You will be one of the first franchisees.
Potential Mitigations
- A business advisor can help you assess the risks of being one of the first franchisees in a new system.
- It's wise to ask your attorney about negotiating additional protections or more favorable terms due to the unproven nature of the franchise system.
- Engage your accountant to create detailed financial projections, as there is no franchisee performance data to rely upon.
Rapid System Growth
Low Risk
Explanation
This risk was not identified. The FDD does not indicate plans for rapid expansion, projecting only a small number of new franchises. For some systems, rapid growth can strain a franchisor's ability to provide adequate support, training, and quality control to all franchisees.
Potential Mitigations
- Your business advisor can help you monitor the system's growth rate over time to ensure support infrastructure keeps pace.
- Discussing the franchisor's long-term, strategic growth plans with management can provide valuable insight.
- An attorney can help you understand the support obligations the franchisor has committed to in the agreement.
New/Unproven Franchise System
High Risk
Explanation
Budlong is a new franchisor, formed in 2023 with no operating franchisees as of the FDD date. Investing in a new system carries inherent risks, including an unproven support infrastructure, underdeveloped operational systems, and minimal brand recognition. Your success is closely tied to the franchisor's ability to successfully build the brand and support its initial franchisees. The FDD includes a mandatory 'Proof of Concept' acknowledgment.
Potential Mitigations
- A business advisor should help you conduct extensive due diligence on the experience of the management team in both this industry and in franchising.
- Your attorney should attempt to negotiate more favorable terms, such as lower fees or stronger protections, to compensate for the higher risk.
- Scrutinize the franchisor's capitalization and business plan with your accountant to assess its long-term viability.
Possible Fad Business
Medium Risk
Explanation
The business focuses on specialty spicy fried chicken, a concept that has seen a rapid rise in popularity. You should consider whether this is a long-term consumer trend or a potential fad. Investing in a concept tied to a specific trend carries the risk that demand could decline if consumer tastes shift, while your long-term contractual obligations would remain.
Potential Mitigations
- Engaging a business advisor to conduct independent market research on the long-term sustainability of the 'hot chicken' restaurant segment is recommended.
- Question the franchisor on its plans for menu innovation and concept evolution to adapt to future market changes.
- Your financial advisor can help you assess the business model's resilience to economic shifts and changing consumer preferences.
Inexperienced Management
Low Risk
Explanation
This risk was not identified. Item 2 indicates that the franchisor's parent company, Craveworthy Brands, has a management team with extensive experience in the restaurant industry and with other franchise brands. In some cases, inexperienced management can pose a risk, as it may lead to inadequate support, unproven systems, or poor strategic decisions for the franchise network.
Potential Mitigations
- A business advisor can help you research the track record and reputation of the key executives mentioned in Item 2.
- When speaking with the franchisor, asking about the specific roles and franchising experience of the management team is a prudent step.
- An attorney can confirm that the support obligations outlined in the Franchise Agreement are robust and not overly discretionary.
Private Equity Ownership
High Risk
Explanation
The franchisor is part of Craveworthy Brands, which operates multiple franchise systems. This structure can be similar to private equity ownership, potentially prioritizing rapid growth or an eventual sale of the brand over the long-term health of an individual system. The Franchise Agreement gives the franchisor broad rights to sell or assign the brand, which could result in a new owner with different priorities.
Potential Mitigations
- It is wise to research the track record of Craveworthy Brands and its principals with their other franchise systems with the help of a business advisor.
- Your attorney should review the assignment clauses in the Franchise Agreement to fully understand the implications if the brand is sold.
- Discuss the parent company's long-term vision for The Budlong brand directly with its management.
Non-Disclosure of Parent Company
High Risk
Explanation
The FDD discloses the parent company, Craveworthy LLC, and the franchisor's financial statements note reliance on related parties for funding. However, the parent company's financial statements are not provided. Given that the franchisor is a new, thinly capitalized entity, the absence of the parent's financials makes it difficult to fully assess the overall financial stability and backing of the system you are joining.
Potential Mitigations
- Your attorney should formally request the financial statements of the parent company, Craveworthy LLC, for a complete review.
- An accountant should analyze the inter-company loan activity to understand the financial relationship between the franchisor and its parent.
- Discuss with your attorney whether the lack of parent financials constitutes a material omission under franchise law.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified. The FDD discloses a predecessor from which assets were purchased but states this entity did not operate a similar business or offer franchises. In some cases, a predecessor's negative history, such as litigation or high franchisee failure rates, can be an important indicator of potential inherited problems for a new franchisor.
Potential Mitigations
- An attorney can help you verify the information about the predecessor through public record searches.
- During discussions with the franchisor, you could ask for more context about the asset purchase from the predecessor.
- A business advisor can help assess if any key personnel from the predecessor are now part of the current management team.
Pattern of Litigation or Bankruptcy
High Risk
Explanation
Item 3 discloses that an officer of the parent company is named in a counterclaim alleging fraudulent and negligent misrepresentation related to an affiliated brand's franchise sale. Item 4 also discloses that an officer was the VP of another restaurant company, Roti, when it filed for bankruptcy. While not directly involving Budlong, litigation or bankruptcies involving key executives can indicate potential risks regarding management practices or industry stability.
Potential Mitigations
- A thorough review of the specific allegations in the litigation by your attorney is essential to understand the potential risks.
- Your attorney should advise you to be extremely cautious regarding any oral promises or projections from the sales team.
- This disclosure reinforces the importance of relying only on the written FDD and Franchise Agreement, as a business advisor would recommend.
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
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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
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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
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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
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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
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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
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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
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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