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The Bunny Hive
How much does The Bunny Hive cost?
Initial Investment Range
$126,650 to $398,050
Franchise Fee
$42,000 to $58,800
The franchise described in this Disclosure Document is for the operation of a business that provides classes, social opportunities, community, educational programming, events, workshops, and other age-appropriate activities for children ages newborn through kindergarten and their caregivers under the name The Bunny Hive.
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The Bunny Hive April 29, 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 franchisor's audited financial statements reveal significant financial weakness, including a net loss of over $387,000 in 2024 and a total members' deficit of nearly $670,000. Auditors included a "going concern" note, questioning the company's ability to continue operating. This financial instability, also flagged as a "Special Risk," creates a serious risk that The Bunny Hive Franchising, LLC (TBH LLC) may be unable to provide promised support or fulfill its obligations.
Potential Mitigations
- An experienced franchise accountant must thoroughly review the franchisor's financials, including all footnotes and the "going concern" note.
- It is essential to ask TBH LLC for their detailed plan to address the operating losses and negative net worth.
- Your attorney should explain the protections, if any, offered by state-mandated fee deferrals.
High Franchisee Turnover
Low Risk
Explanation
High franchisee turnover can be a significant red flag indicating systemic problems. Item 20 of this FDD does not show any franchisee terminations, non-renewals, or other cessations of business. However, as the franchise system is very new, this data has limited predictive value for long-term stability. Continued monitoring of this metric would be prudent for any prospective franchisee.
Potential Mitigations
- Engaging a business advisor to analyze the Item 20 data for trends over the system's entire (though short) history is a good practice.
- A discussion with your attorney can help you frame questions for current franchisees about their satisfaction and future intentions.
- You should ask TBH LLC about the support systems in place to promote franchisee success and longevity.
Rapid System Growth
High Risk
Explanation
The system is undergoing extremely rapid expansion, growing from one to 14 franchised locations in 2024, as shown in Item 20. When combined with the financial weakness disclosed in Item 21, this pace raises concerns about whether the franchisor's support infrastructure can keep up. Rapid growth can strain resources for training, site selection, and ongoing operational assistance, potentially impacting your business's launch and performance.
Potential Mitigations
- A thorough discussion with the newest franchisees about the quality and timeliness of the support they received is crucial.
- It is advisable to question TBH LLC directly about their specific plans for scaling support staff and systems to match franchise sales.
- Your business advisor can help you assess whether the franchisor's management team has the experience to manage such rapid growth.
New/Unproven Franchise System
High Risk
Explanation
The franchisor is a new company, formed in March 2023, and has a very limited history of operating a franchise system. This is explicitly identified as a "Special Risk" in the FDD. Investing in an unproven system carries higher risk, as its business model, support structures, and brand recognition are not yet well-established. Your success is more dependent on the franchisor's ability to execute its plan effectively without a long track record.
Potential Mitigations
- A business advisor should help you conduct extensive due diligence on the founders' experience in both this specific industry and in franchising.
- Speaking with the very first franchisees to open is critical to understand their early experiences and the evolution of franchisor support.
- Your accountant should carefully assess the franchisor's capitalization and business plan to gauge its potential for long-term viability.
Possible Fad Business
Medium Risk
Explanation
The business concept focuses on social and developmental activities for very young children and their caregivers. This market can be influenced by changing trends in parenting and is highly dependent on discretionary consumer spending. You should consider the long-term, sustainable demand for this specific "social club" model beyond current trends, as a shift in consumer interest could impact profitability even though your contractual obligations would remain.
Potential Mitigations
- It is prudent to conduct independent market research with a business advisor to assess the long-term demand for this niche service in your area.
- You should evaluate the franchisor's plans for innovation and adaptation to stay relevant as parenting trends and economic conditions change.
- Talking to existing franchisees about customer retention and the perceived longevity of the concept is a valuable step.
Inexperienced Management
High Risk
Explanation
While the management team has experience operating the business concept at affiliate locations, their experience in managing a franchise system is very limited, beginning only in 2023. A lack of deep franchising experience can pose risks related to the quality of support, the robustness of operating systems, and the overall strategic management of a growing network of franchisees. This is a higher-risk scenario than with a seasoned franchisor.
Potential Mitigations
- Asking TBH LLC about any experienced franchise consultants or advisors they have engaged to guide their new system is an important question.
- Speaking extensively with the initial franchisees about the quality of support and system maturity is essential due diligence.
- A business advisor can help you assess if the management team's skills are likely to translate effectively to running a franchise company.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified. Private equity ownership can sometimes lead to a focus on short-term profits over the long-term health of franchisees. This FDD indicates the franchisor is owned by a holding company controlled by the founders, not a private equity firm. This can suggest a longer-term vision, though it does not eliminate other financial or operational risks.
Potential Mitigations
- It is always good practice to ask your attorney to verify the franchisor's ownership structure and inquire about any future plans for sale.
- A discussion with a business advisor can help you understand the potential impacts of different ownership structures on a franchise system.
- During due diligence, asking current franchisees about their perception of the franchisor's long-term commitment is valuable.
Non-Disclosure of Parent Company
Low Risk
Explanation
The FDD is required to disclose any parent company that has significant influence. This FDD discloses a parent company in Item 1. A risk could arise if a parent's financial statements were required for a full risk assessment but not provided. Given the franchisor's financial condition, the financial strength of its parent is an important consideration for your due diligence.
Potential Mitigations
- You should request the financial statements for the parent company, The Bunny Hive Holdings, LLC, to better assess the overall financial stability of the enterprise.
- An accountant can help you evaluate if the parent company appears to have the resources to support the financially weak franchisor entity.
- Your attorney can advise on whether the parent's financials should have been included in the FDD under franchise rules.
Predecessor History Issues
Low Risk
Explanation
A risk can arise if a franchisor has a predecessor with a history of problems, such as litigation or franchisee failures. In this case, the FDD states in Item 1 that the franchisor has no predecessors. This means the current entity is the originator of the franchise system, which aligns with its recent formation date. Therefore, there is no hidden history of a prior entity to investigate.
Potential Mitigations
- Even without a formal predecessor, it's wise to ask your attorney to verify the business history of the individual founders.
- A business advisor can help you research the track record of the affiliate-owned locations that operated before franchising began.
- During franchisee calls, you can inquire about the history of the brand and concept before it was formally franchised.
Pattern of Litigation
Low Risk
Explanation
A pattern of litigation, especially lawsuits from franchisees alleging fraud or breach of contract, is a serious warning sign. This FDD discloses no such litigation history in Item 3. The absence of litigation is a positive indicator, although it is expected for a franchise system that is less than two years old.
Potential Mitigations
- While the FDD is clean, it is still a prudent step to ask your attorney to conduct a public records search for any litigation involving the franchisor or its principals.
- Speaking with current franchisees can sometimes uncover disputes that have not yet resulted in formal litigation.
- Understanding the dispute resolution clauses in the Franchise Agreement is important, as they dictate how future conflicts would be handled.
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.
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