Card My Yard Logo

Card My Yard

CMY Franchising, LLC
https://www.cardmyyard.com
1-512-943-2693
761 W. 1200 N., Suite 300, Springville, Utah 84663

Initial Investment Range

$10,350 to $18,550

Franchise Fee

$8,500

The franchise described in this Disclosure Document is for a yard greeting business utilizing the “Card My Yard” concept and our business operating system to provide yard greeting services and related products.

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Card My Yard April 30, 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
4
3
3

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The audited financial statements in Item 21 disclose that the franchisor, CMY Franchising, LLC (CMY LLC), has experienced significant and recurring net losses for the past three fiscal years. Its parent company also reported substantial losses. This financial performance, combined with a qualified opinion from the auditor for 2023, raises questions about the company's long-term financial stability and its ability to support its franchisees, which could impact your investment.

Potential Mitigations

  • An experienced franchise accountant should perform a detailed analysis of the franchisor's and parent company's financial statements, including the qualified opinion.
  • Discussing the company's financial health and future plans with your financial advisor is essential to assess the investment risk.
  • Inquiring with your attorney about the implications of the qualified audit opinion could provide critical insight.
Citations: Item 1, Item 21, FDD Exhibit E

High Franchisee Turnover

Low Risk

Explanation

Item 20 data does not indicate an unusually high rate of franchisee turnover in the past three years. However, it is still crucial to understand why franchisees leave the system. Analyzing the specific numbers for terminations, non-renewals, and transfers can provide insight into the overall health of the franchise network and potential challenges you might face.

Potential Mitigations

  • Contacting a sample of former franchisees listed in FDD Exhibit H to discuss their reasons for leaving is a vital due diligence step.
  • Your business advisor can help you analyze the turnover data in Item 20 to identify any concerning trends over the three-year period.
  • A discussion with your attorney can help you frame appropriate questions for both current and former franchisees.
Citations: Item 20, FDD Exhibit H

Rapid System Growth

Medium Risk

Explanation

Item 20 data shows steady system growth over the past three years. While growth can be positive, it must be matched by the franchisor's ability to provide adequate support to all franchisees. Given the franchisor's disclosed financial losses, there is a potential risk that its support infrastructure, including training and operational assistance, may become strained as the system expands, which could affect your business's performance.

Potential Mitigations

  • A consultation with your business advisor can help you assess if the franchisor's support capabilities are keeping pace with its growth.
  • Inquiring with a range of franchisees, both new and established, about the quality and timeliness of franchisor support is crucial.
  • Your accountant should review the franchisor's financials to evaluate its capacity to invest in necessary support infrastructure.
Citations: Item 11, Item 20, Item 21

New/Unproven Franchise System

High Risk

Explanation

The franchisor discloses on page 5 that it has a "Short Operating History" and is at an early stage of development, calling it a "riskier investment." While the brand has existed since 2014, the current franchisor entity was formed in 2020 and acquired by a new parent in 2024. This newness, combined with disclosed financial losses, presents risks related to unproven systems, brand recognition, and long-term franchisor stability.

Potential Mitigations

  • Conducting extensive due diligence on the management's experience in both the industry and in franchising is a task for your business advisor.
  • The risks associated with a newer franchise system should be carefully weighed with your financial advisor.
  • Your attorney can help you understand any additional protections you might seek when investing in a younger system.
Citations: Item 1, Item 2, Item 5, Item 20, Item 21

Possible Fad Business

Medium Risk

Explanation

The business model is centered on yard greetings, which are described as a "luxury lifestyle purchase." This type of business could be susceptible to changes in consumer taste and economic downturns. A prospective franchisee should consider whether the demand for such services is a sustainable long-term trend or a novelty with a shorter lifespan, which could affect the business's viability over the full franchise term.

Potential Mitigations

  • Assessing the long-term market demand for this specific service in your local area with a business advisor is a key step.
  • Evaluating the franchisor's plans for innovation and adaptation beyond the core offering should be part of your due diligence.
  • A discussion with your financial advisor about the business's potential resilience during economic shifts can provide valuable perspective.
Citations: Item 1, Item 11

Inexperienced Management

Medium Risk

Explanation

The franchisor was acquired by a private equity firm, FS PEP Holdco, LLC, in March 2024, and the executive team has changed over the past few years. While the current executives have some industry history, the relatively recent ownership and management changes introduce uncertainty. There is a potential for shifts in strategy, support levels, or culture that may not align with the interests of long-term franchisee profitability.

Potential Mitigations

  • A thorough review of the management team's background and franchise-specific experience with your business advisor is important.
  • Inquiring with franchisees who have been in the system through the ownership change about shifts in support or culture is recommended.
  • Your attorney can help you understand the implications of the recent acquisition on your Franchise Agreement.
Citations: Item 1, Item 2, Item 11

Private Equity Ownership

High Risk

Explanation

The franchisor's ultimate parent company is a private equity firm, FS PEP Holdco, LLC, as disclosed in Item 1 and confirmed by the March 2024 acquisition. This ownership structure may create a focus on shorter-term financial returns, which could potentially lead to decisions like increasing fees, reducing support services, or selling the system. The Franchise Agreement gives the franchisor the right to sell or assign the agreement without your consent.

Potential Mitigations

  • Researching the private equity firm's history with other franchise brands can offer insight into their operating style; a business advisor can assist.
  • It is important to discuss with your attorney the implications of the franchisor's right to assign the agreement to a new owner.
  • Speaking with franchisees about their experience since the private equity acquisition can provide valuable, real-world perspective.
Citations: Item 1, Item 17, Item 21

Non-Disclosure of Parent Company

High Risk

Explanation

The franchisor, CMY LLC, is a wholly owned subsidiary of CMY Holdco, LLC, which was acquired by FS PEP Holdco, LLC. The FDD includes financial statements for both the franchisor and the ultimate parent. However, the financials for the franchisor entity show significant operating losses and its parent's financials also show large losses, indicating financial weakness throughout the corporate structure.

Potential Mitigations

  • Your accountant must carefully review the financial statements for both the franchisor and its parent company to assess the overall financial health.
  • Understanding the legal and financial relationship between the parent and the franchisor entity is a key task for your attorney.
  • It is wise to ask the franchisor about the financial support the parent company provides to the franchisor entity.
Citations: Item 1, Item 21, FDD Exhibit E

Predecessor History Issues

Low Risk

Explanation

Item 1 discloses that the current franchisor acquired the system from a predecessor entity in 2020. While the FDD provides some history, it is important to recognize that the system operated under different ownership and potentially different standards prior to this acquisition. A complete picture of the system's historical challenges and performance requires considering this change in control.

Potential Mitigations

  • Speaking with long-term franchisees who operated under the predecessor can provide valuable historical context.
  • A business advisor can help you assess how the change in ownership may have impacted the system's trajectory.
  • Your attorney should review the asset purchase details to understand what liabilities, if any, were assumed from the predecessor.
Citations: Item 1, Item 3, Item 4

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states, "No litigation is required to be disclosed in this Item." The absence of significant litigation against the franchisor is a positive indicator. However, it's important to understand that franchisors may settle disputes before they become formal lawsuits, which would not be disclosed here.

Potential Mitigations

  • Even with no disclosed litigation, asking current and former franchisees about their experiences with disputes can be insightful.
  • Your attorney can explain the types of disputes that would legally require disclosure in Item 3.
  • Your business advisor can help you assess the overall health of franchisee relations through direct conversations with system members.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
4
6
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

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3

Financial & Fee Risks

Total: 3
1
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.