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Class 101
How much does Class 101 cost?
Initial Investment Range
$75,287 to $197,687
Franchise Fee
$49,900 to $117,400
You will operate a business providing advice, guidance and training to high school students and their parents in preparing for, selecting, applying to, and paying for college.
Enjoy our partial free risk analysis below
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Class 101 April 14, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The financial statements for the parent and guarantor, UA Holdings, LLC, show significant and recurring net losses for the past two fiscal years, including a net loss of $68.7 million in 2024. The company also carries a large accumulated deficit of over $128 million. This sustained unprofitability at the parent level may indicate financial instability, potentially affecting the resources available to support you and the Class 101 Franchise, LLC (Class 101) brand.
Potential Mitigations
- A thorough review of the guarantor's complete audited financial statements, including all footnotes, with your accountant is essential to assess its financial health.
- It is advisable to discuss the parent company's strategy for achieving profitability and its commitment to supporting the Class 101 system with your business advisor.
- Your attorney should confirm the validity and strength of the parent company's guarantee of the franchisor's obligations.
High Franchisee Turnover
Low Risk
Explanation
Item 20 data for 2024 indicates that two franchisees ceased operations for other reasons, which is not an unusually high number relative to the system's size. However, the Item 19 Financial Performance Representation notes that an additional eight franchised outlets were excluded from the data set for reporting incomplete data. This lack of information from over 10% of the system's franchisees creates uncertainty and could potentially mask a higher rate of struggling or closed units.
Potential Mitigations
- You should make it a priority to contact current and former franchisees, especially those who may have left the system recently, to discuss their experiences.
- Analyzing the Item 20 tables for trends over the full three-year period with your accountant can provide a more complete picture of system stability.
- Your attorney can help you formulate questions for the franchisor regarding the circumstances of all unit cessations and transfers.
Rapid System Growth
Medium Risk
Explanation
The franchise system is expanding, growing from 48 to 69 franchised outlets over the past two years. While growth can be positive, this rapid pace, when viewed alongside the parent company's significant operating losses disclosed in Item 21, raises a potential risk. The franchisor's support infrastructure for training, site selection, and ongoing assistance might become strained if it cannot keep pace with the number of new franchisees joining the system.
Potential Mitigations
- In your discussions with current franchisees, it is important to ask about the quality and responsiveness of the franchisor's support systems.
- A business advisor can help you assess whether the franchisor's management team and infrastructure appear adequate to handle continued expansion.
- Reviewing the franchisor's financial statements with your accountant may help in evaluating if they are investing sufficiently in support services.
New/Unproven Franchise System
High Risk
Explanation
The franchisor entity, Class 101, was formed in April 2022 after acquiring the assets of a predecessor. The FDD explicitly highlights 'Short Operating History' as a Special Risk for this franchise. Investing in a franchise system under relatively new ownership and structure inherently carries more risk. The operational track record and support systems under the new ownership are not as established as those of a system with a longer, more consistent operating history.
Potential Mitigations
- Extensive due diligence is recommended; speaking with franchisees who have experience with both the predecessor and current franchisor is critical.
- Your attorney should carefully review the asset purchase agreement details if available to understand what was acquired from the predecessor.
- A business advisor can help you assess the current management team's experience in managing a franchise system through a transition.
Possible Fad Business
Low Risk
Explanation
This specific risk was not identified in the FDD Package. The business of providing college advisory and test preparation services is a well-established industry with consistent consumer demand. It does not appear to be based on a short-term trend or fad, which reduces the risk of the entire market disappearing unexpectedly. However, competition within this established market is a related business risk to consider.
Potential Mitigations
- It is still prudent to research the long-term demand and competitive landscape for college advisory services in your specific market with a business advisor.
- An accountant can help you model the financial viability of the business over the full franchise term.
- Your attorney can help review how the franchise agreement allows for system evolution to meet changing market needs.
Inexperienced Management
Low Risk
Explanation
This specific risk was not identified in the FDD Package. Item 2 of the FDD details the business experience of the franchisor's and parent company's management team. The executives listed appear to have considerable prior experience in the franchising industry, educational services, and corporate management, which suggests they possess the relevant background to operate and support a franchise system of this nature.
Potential Mitigations
- It is still a good practice to discuss your impressions of the management team's competence and vision with current franchisees.
- A business advisor can help you independently research the professional backgrounds of the key executives listed in Item 2.
- Your attorney should confirm that there are no undisclosed principals who lack relevant experience.
Private Equity Ownership
High Risk
Explanation
The franchisor's ultimate parent company, UA Holdings, LLC, appears to be a private equity-backed entity, characterized by its acquisition-heavy growth strategy and significant debt load. This ownership structure may create a focus on maximizing short-term returns for investors, which could potentially conflict with the long-term health of franchisees. The litigation history of affiliate brands disclosed in Item 3 might suggest a more aggressive management culture sometimes associated with such ownership.
Potential Mitigations
- It is crucial to discuss with your attorney the implications of the franchisor's right to sell the system, which is common with PE-owned brands.
- Researching the private equity firm's reputation and track record with other franchise concepts can provide valuable insight for you and your business advisor.
- Speaking with franchisees about any changes in support or fees since the current ownership took over is an important due diligence step.
Non-Disclosure of Parent Company
Low Risk
Explanation
This specific risk was not identified in the FDD Package. Item 1 of the FDD discloses the franchisor's parent, Unleashed Brands, LLC, and the ultimate parent and guarantor, UA Holdings, LLC. Furthermore, Exhibit H includes the audited consolidated financial statements for the guarantor, UA Holdings, LLC, as required. The ownership structure appears to be appropriately disclosed.
Potential Mitigations
- Your attorney should always verify that the entity providing the financial statements is the same one guaranteeing the franchisor's obligations.
- An accountant can help you trace the corporate structure described in Item 1 to ensure all relevant parent and affiliate entities are disclosed.
- If any confusion about the corporate structure exists, it is wise to request a simplified organizational chart from the franchisor.
Predecessor History Issues
Medium Risk
Explanation
The franchisor acquired the assets from a predecessor, Class 101, Inc. Item 3 discloses litigation involving the founder of that predecessor. While the lawsuit is concluded, its existence suggests a potentially contentious history or transition between the prior and current ownership. This history could have lingering effects on the brand's culture or franchisee relations that are not immediately apparent from the FDD text alone.
Potential Mitigations
- Discussing the transition from the predecessor's ownership with long-term franchisees can provide valuable context.
- Your attorney may suggest asking the franchisor direct questions about the integration of the predecessor's system and any inherited issues.
- A business advisor can help you research any public information or news articles related to the predecessor company for a fuller picture.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses that several of the franchisor's affiliate brands under the same parent company have entered into consent orders with state regulators (Maryland, California) for franchise law violations, including selling unregistered franchises. While these actions do not directly involve Class 101, a pattern of regulatory issues among affiliates could suggest a potential for compliance weaknesses or an aggressive sales culture within the parent organization that oversees all the brands.
Potential Mitigations
- Your attorney must carefully review all litigation and regulatory actions disclosed in Item 3, including those of affiliates.
- It is advisable to ask the franchisor what steps have been taken across the entire parent organization to improve compliance procedures.
- A business advisor can help you assess if this pattern indicates a higher level of risk for you as a franchisee within this system.
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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