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How much does Champps Kitchen + Bar cost?
Initial Investment Range
$1,055,750 to $7,070,750
Franchise Fee
$105,750 to $150,750
We offer Champps Kitchen + Bar franchises. As a franchisee, you will operate a restaurant called Champps Kitchen + Bar specializing in classic American cuisine on a take-out or eat-in basis with a sports-bar atmosphere and with a wide selection of beer.
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Champps Kitchen + Bar March 28, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The guarantor's recent audited financial statements in Exhibit B show a net loss of $12.5 million for fiscal year 2024, a significant downturn from a $17 million profit in 2023. The statements also reveal substantial impairment charges on assets and goodwill. This financial performance could potentially impact the franchisor's ability to support its systems, invest in brand growth, and meet its obligations to you, presenting a notable risk to your investment.
Potential Mitigations
- A franchise accountant should analyze the guarantor's complete financial statements, including all notes, to assess cash flow, debt levels, and the reasons for the net loss.
- Your attorney should verify if any financial assurances, such as bonds or escrow, are required by state law due to these financial results.
- Discuss the company's financial health and strategic plans for improving profitability directly with the franchisor's management, with your business advisor present.
High Franchisee Turnover
Low Risk
Explanation
The risk of high franchisee turnover was not identified based on the data in Item 20. However, the system is extremely small, with only two franchised outlets reported, making the data statistically insignificant for predicting future trends. Franchisee turnover is a critical measure of system health, as high rates can indicate issues with profitability, franchisor support, or the business model itself. Diligence is still required given the small sample size.
Potential Mitigations
- Speaking with the two current franchisees listed in Exhibit K is essential to understand their experience and satisfaction with the system.
- Your business advisor can help you analyze the litigation history in Item 3 for disputes with franchisees of affiliated brands, which may indicate potential future issues.
- It is advisable to have your accountant review the franchisor's financial stability, as it is a key factor in long-term franchisee success.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD package. While rapid system growth can be a positive sign, it may also strain a franchisor's ability to provide adequate support, training, and quality control to all franchisees. A franchisor's support infrastructure must grow in tandem with its franchise sales to maintain system health and franchisee satisfaction.
Potential Mitigations
- Engaging a business advisor to analyze the franchisor's growth rate in Item 20 against its support infrastructure described in Item 11 can be insightful.
- Your accountant can assess the franchisor's financial statements in Item 21 to determine if they have sufficient capital to support their expansion.
- It is wise to ask existing franchisees about their perception of the franchisor's support quality as the system has grown.
New/Unproven Franchise System
High Risk
Explanation
BQ Concepts, LLC (BQ Concepts) only began franchising the Champps brand in March 2024 and acquired it in 2022. The system is extremely small, with only two franchised and one corporate-owned location. This presents risks associated with an unproven franchise system, including minimal brand recognition under the new ownership, underdeveloped support systems, and potential instability. The franchisor's limited track record makes it difficult to assess its capabilities and long-term viability.
Potential Mitigations
- Your attorney should help you conduct extensive due diligence on the management team's prior experience in both the restaurant industry and franchising.
- A business advisor can help you assess the franchisor's business plan and capitalization to ensure it can support the system adequately.
- Speaking with the two existing franchisees is critical to understand the realities of operating under this new franchisor.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. A 'fad' business is one tied to a short-lived trend, which can be risky for a long-term investment like a franchise. When evaluating a franchise concept, it is important to consider whether it has sustained consumer demand and the ability to adapt to changing market tastes over time, rather than relying on temporary popularity.
Potential Mitigations
- Your business advisor can help you research the industry to assess the long-term viability and consumer demand for the products or services offered.
- It is prudent to analyze the franchisor's history of innovation and product development to see if they adapt to changing trends.
- An accountant can help you model financial scenarios that account for potential declines in popularity after an initial trend fades.
Inexperienced Management
High Risk
Explanation
The franchisor entity, BQ Concepts, LLC, has a very limited history, having started franchising this brand in 2024. While its parent companies (MTY/BBQ) have extensive experience, their portfolio is vast, raising concerns about divided attention. The parent's history, detailed in Item 3, includes numerous lawsuits with franchisees of other brands alleging misrepresentation and fraud. This suggests a management culture that may pose risks to a new franchisee.
Potential Mitigations
- A thorough review of the management team's specific experience with full-service sports bar concepts should be conducted with a business advisor.
- Your attorney should analyze the extensive litigation history of the parent company's other brands for patterns of franchisee disputes.
- It is vital to speak with the two existing Champps franchisees about the quality and focus of the support they receive.
Private Equity Ownership
Medium Risk
Explanation
The franchisor is owned by BBQ Holdings, Inc., which is a subsidiary of MTY Food Group, Inc., a large multi-brand conglomerate. While not a typical private equity fund, this corporate structure can present similar risks. Decisions may prioritize the parent company's overall financial objectives, such as cost-cutting or focusing resources on higher-performing brands, rather than the long-term health of the small Champps system. The parent's recent financial performance shows a net loss.
Potential Mitigations
- Your business advisor should help you investigate the parent company's track record and reputation in managing its diverse portfolio of franchise brands.
- Talking to franchisees from other MTY-owned brands could provide insight into their management philosophy and support levels.
- Your attorney should review clauses related to the sale or assignment of the franchise system, which is common in such corporate structures.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. The FDD clearly discloses the parent company structure, and the financial statements provided are for MTY Franchising USA, Inc., which also acts as the Guarantor for the franchisor's performance. This provides a degree of transparency into the financial backing of the system.
Potential Mitigations
- It is always prudent for your accountant to review the financials of any parent or guarantor entity to understand the ultimate financial strength supporting the franchisor.
- Your attorney should confirm that any performance guarantee from a parent company is legally sound and enforceable.
- A business advisor can help you understand the corporate structure and how it might impact decision-making and support for your specific brand.
Predecessor History Issues
High Risk
Explanation
The FDD discloses predecessors for the Champps brand and various affiliated brands under the MTY umbrella. Item 3 reveals a significant history of litigation involving these affiliates and predecessors, with numerous franchisee claims of fraud and misrepresentation. This extensive history of disputes across the larger organization presents a significant risk, suggesting potential systemic issues that could carry over to the management of the Champps brand.
Potential Mitigations
- A franchise attorney should meticulously review the litigation history in Item 3 for all predecessors and affiliates to identify recurring problems.
- Consider the pattern of disputes across the entire MTY system as a key indicator of the corporate culture you would be entering.
- Your business advisor can help research the historical performance and franchisee relations of other brands managed by the parent company.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses a significant and concerning pattern of litigation involving the franchisor’s parent and affiliated companies against their franchisees. Multiple lawsuits allege fraud, misrepresentation, and deceptive actions. Cases involving Papa Murphy's, SweetFrog, Kahala Franchising, and Fresh Enterprises show a history of serious disputes with franchisees. This extensive litigation history across the broader MTY system is a major red flag and suggests a potentially contentious franchisor-franchisee relationship.
Potential Mitigations
- Your franchise attorney must conduct a detailed analysis of the litigation summarized in Item 3 to understand the nature and outcomes of these disputes.
- Given the pattern of fraud and misrepresentation claims, independent verification of all information from the franchisor is critical.
- Discussing this litigation history with the two current franchisees could provide valuable context and insight.
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