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How much does 1943 Classic Wevelopment Restaurant cost?
Initial Investment Range
$670,000 to $1,177,000
Franchise Fee
$105,500 to $113,500
We offer franchises for the operation of a themed restaurant and bar offering Korean street food and snack menu items, and a variety of other related food products, side dishes, and other alcoholic and non-alcoholic beverages for both on-premises and off-premises consumption.
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1943 Classic Wevelopment Restaurant March 5, 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
Wevelopment USA, Inc. (Wevelopment USA) is a new company, formed in January 2024, with minimal financial history and very limited net worth, as shown in the Item 21 financial statements. State regulators in Maryland and Washington have required that your initial fees be deferred until the franchisor fulfills its pre-opening obligations, a step typically taken when a franchisor's financial condition is weak. This may impact its ability to provide long-term support or weather economic challenges.
Potential Mitigations
- A franchise accountant should carefully analyze the provided financial statements and the implications of the state-mandated fee deferrals.
- It is important to discuss with a business advisor the risks of investing in a thinly capitalized startup franchisor.
- Legal counsel can help you understand the protections offered by the state-mandated financial assurance requirements.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified in the FDD package. The data in Item 20 shows only one franchise has been established and does not indicate any terminations, non-renewals, or other cessations. High franchisee turnover is a critical red flag in established systems, as it can signal systemic problems like lack of profitability, poor support, or an unviable business model. A prospective franchisee should always monitor this data in future FDDs.
Potential Mitigations
- Your business advisor can help you understand how to calculate and interpret franchisee turnover rates for future analysis.
- An accountant can show you how to compare turnover data against industry benchmarks to assess system health.
- It is wise to consult with your attorney on the importance of speaking with former franchisees when they are listed in future FDDs.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD package. The data in Item 20 shows the system is new and not undergoing rapid growth. While growth is often positive, exceptionally rapid expansion can sometimes strain a franchisor's ability to provide adequate support, training, and quality control to all franchisees. This can lead to operational challenges across the system as support resources are spread thin.
Potential Mitigations
- Engaging a business advisor to monitor the system's growth rate in subsequent FDDs is a prudent step.
- An accountant can help you assess if the franchisor's financial resources are keeping pace with its growth.
- Your attorney can advise on contractual clauses related to franchisor support levels.
New/Unproven Franchise System
High Risk
Explanation
The franchisor, Wevelopment USA, was formed in January 2024 and only began offering franchises in April 2024. The FDD's "Special Risks" section explicitly highlights the company's "Short Operating History." As a new entity with only one franchisee in the United States, the business model, brand recognition, and support systems are largely unproven in this market. This presents a higher level of risk compared to investing in a well-established franchise system with a long track record.
Potential Mitigations
- A business advisor can help you conduct extensive due diligence on the parent company's success in Korea and assess its transferability to the US market.
- It is crucial to have your accountant thoroughly scrutinize the financial projections and capitalization of this new venture.
- Your attorney might be able to negotiate more favorable terms to compensate for the higher risk associated with an unproven system.
Possible Fad Business
Medium Risk
Explanation
The business concept is a restaurant and bar with a highly specific theme: "the year 1943 in Korea, featuring retro décor and visual accents." While Korean cuisine is popular, a business model built around such a niche and specific historical theme may have a limited or temporary appeal. There is a potential risk that the concept could be a fad, which could impact long-term consumer demand and the sustainability of your investment.
Potential Mitigations
- Engage a business advisor to conduct independent market research on the long-term appeal of such a specific, themed dining concept in your area.
- Discuss the franchisor's plans for evolving the brand and menu to stay relevant beyond the initial theme with your business consultant.
- Your financial advisor can help model the financial risks if consumer tastes shift away from this specific theme.
Inexperienced Management
Medium Risk
Explanation
The CEO has experience operating this and other concepts for the parent company in South Korea. However, the management team's direct experience is in the Korean market, not the United States. Navigating the unique legal, cultural, and competitive landscape of the U.S. restaurant and franchise industry presents a different set of challenges. This lack of specific U.S. market and franchising experience could pose a risk to the quality and relevance of the support you receive.
Potential Mitigations
- When interviewing the franchisor, ask specific questions about how they plan to adapt their strategies and support for the U.S. market.
- A business advisor can help you evaluate whether the management team has engaged U.S.-based consultants to bridge any experience gaps.
- Speaking with the first U.S. franchisee about the quality of support they have received would provide valuable insight.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. The franchisor is disclosed as being a subsidiary of a Korean corporation, not a private equity firm. Private equity ownership can sometimes introduce risks related to a focus on short-term profitability over the long-term health of the franchise system, potentially leading to increased fees, reduced support, or a quick sale of the company.
Potential Mitigations
- A business advisor can help you research the ownership structure of any franchisor you consider.
- It's good practice to have your attorney review clauses related to the sale or assignment of the franchise system.
- If a franchisor is owned by a private equity firm, your business advisor should research that firm's history with other franchise brands.
Non-Disclosure of Parent Company
High Risk
Explanation
Wevelopment USA is a new, thinly capitalized subsidiary of a foreign parent, Wevelopment Korea. The parent company is also designated as the sole supplier for key proprietary products. Under these circumstances, the parent's financial health is material to your risk, but its financial statements are not included in the FDD. Without them, you cannot fully assess the stability of your supply chain or the overall financial strength backing your franchise.
Potential Mitigations
- Your attorney should request the financial statements of the parent company, Wevelopment Korea, to allow for a complete risk assessment.
- An accountant should review the parent's financials, if provided, to assess its ability to support the US operations and act as a reliable supplier.
- A business advisor can help evaluate the risks associated with a supply chain dependent on a foreign parent company.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 clearly states that the franchisor has no predecessors. In cases where a franchisor has acquired the system from a predecessor, it is important to investigate the predecessor's history, including any past litigation, bankruptcy, or high franchisee turnover, as these can sometimes indicate underlying problems that may persist with the new ownership.
Potential Mitigations
- When analyzing an FDD, always have your attorney carefully review Item 1 for any mention of predecessors.
- If a predecessor exists, a business advisor can help you research the predecessor's public records and history.
- Your attorney can guide you in asking current long-term franchisees about their experience under any previous ownership.
Pattern of Litigation
Medium Risk
Explanation
The franchisor's parent company, Wevelopment Korea, has a pending administrative action against it by the State of Virginia. The allegation is that the parent company offered or sold a franchise in Virginia without being properly registered. While not a lawsuit initiated by a franchisee for fraud, this action relates directly to non-compliance with U.S. franchise law and could indicate a lack of experience or diligence in navigating the U.S. regulatory environment.
Potential Mitigations
- Your attorney should evaluate the significance of this pending action and its potential impact on the franchisor and the system.
- It would be prudent to ask the franchisor for more details about the circumstances of the Virginia case.
- A business advisor can help you assess if this legal issue is part of a broader pattern of inexperience with U.S. regulations.
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