Clean Juice
Initial Investment Range
$176,500 to $419,000
Franchise Fee
$20,000 to $35,000
You will operate a retail store offering primarily fruit and vegetable juices, smoothies, coffees, teas (including matcha), acai bowls, toasts, sandwiches, wraps and other related supplemental products and services under the trade name Clean Juice.
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Clean Juice April 3, 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 franchisor explicitly warns that its financial condition calls its ability to provide support into question. An initial audited financial statement includes a "going concern" note, indicating dependence on its parent company for liquidity. The state of California also imposes a fee deferral condition due to concerns about capitalization. These factors suggest you may face risks related to the franchisor's financial stability and its ability to support your business effectively.
Potential Mitigations
- An experienced franchise accountant must review all financial statements, including the 'going concern' note and the parent company's commitment.
- Discuss the practical implications of the franchisor's financial state and its reliance on a parent company with your business advisor.
- Your attorney should analyze the terms of the fee deferral conditions in any state addenda applicable to you.
High Franchisee Turnover
High Risk
Explanation
The franchisor explicitly highlights a high turnover rate as a special risk, stating approximately 36% of franchised outlets were terminated in the last year. Item 20 data confirms a significant number of closures and transfers relative to the system’s size. This level of churn can be a critical indicator of potential systemic issues, such as franchisee unprofitability, dissatisfaction with the system, or inadequate support, which could significantly increase your investment risk.
Potential Mitigations
- It is crucial to contact a significant number of former franchisees listed in Exhibit F to understand their reasons for leaving the system.
- Your accountant should help you analyze the Item 20 data to calculate the effective annual churn rate for the system.
- Engage a business advisor to discuss whether this turnover rate signals underlying problems with the business model's viability or profitability.
Rapid System Growth
Low Risk
Explanation
This risk was not identified, as Item 20 data indicates a recent net decrease in outlets rather than rapid expansion. Generally, a franchisor growing too quickly may outpace its ability to provide adequate training, site selection assistance, and operational support to all new franchisees. This can lead to diminished brand quality and franchisee struggles. While not a current issue here, it is a factor to monitor in any franchise system.
Potential Mitigations
- When evaluating any franchise, your business advisor can help you assess if the franchisor's growth plans are sustainable and well-supported.
- Reviewing a franchisor's financial statements with an accountant can reveal if they have the capital and staffing to support planned growth.
- Discussing support levels with both new and established franchisees can provide valuable insight into the real-world effects of system growth.
New/Unproven Franchise System
Medium Risk
Explanation
The current franchisor entity, CJ Fresh Holdings FC, LLC (CJ Fresh Holdings FC), is very new, having been formed in May 2024 after acquiring the system from a predecessor. The FDD explicitly flags this "Short Operating History" as a special risk. While the Clean Juice brand has existed since 2016 and management has experience with other brands, a new ownership entity can introduce significant changes in support, strategy, and operational focus, creating uncertainty for you.
Potential Mitigations
- A business advisor should help you research the track record of the new parent company, BRIX Holdings, and its management of other franchise brands.
- Inquire with franchisees who have been in the system before and after the May 2024 acquisition about any changes in support or operations.
- Your attorney can help you understand any implications arising from the transfer of franchise agreements to a new legal entity.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. A fad business is one based on a short-lived trend, which can be a significant risk for a long-term investment like a franchise. When consumer interest wanes, your business could fail, but you would still be bound by the franchise agreement's obligations, such as ongoing fees and post-termination non-compete clauses. Evaluating a concept's long-term consumer demand is a key piece of due diligence.
Potential Mitigations
- An independent assessment of the long-term market demand for the core products or services should be conducted with your business advisor.
- Investigate the franchisor's plans for innovation, product development, and adaptation to stay relevant beyond current trends.
- Analyzing the business model's resilience to economic shifts with your financial advisor can provide important insights.
Inexperienced Management
Low Risk
Explanation
While the franchisor itself is new, its key executives, as listed in Item 2, have extensive experience in the restaurant and franchise industry through their roles at parent company BRIX Holdings and other major brands. This experienced management team mitigates the risk typically associated with a new franchisor entity. However, you should still verify that their experience translates into effective support and strategy for this specific brand.
Potential Mitigations
- It is wise to discuss the management team's specific involvement and strategy for this brand with current franchisees.
- A business advisor can help you research the performance of other franchise brands managed by the same executive team.
- During your discussions with the franchisor, inquire about the management team's vision and long-term commitment to the Clean Juice system.
Private Equity Ownership
Medium Risk
Explanation
Item 1 discloses that the franchisor is part of BRIX Holdings, LLC, which appears to be a private-equity-style holding company for multiple franchise brands. This structure can introduce risks where decisions prioritize short-term investor returns over the long-term health of franchisees. This might manifest as pressure to cut support costs, increase fees, or focus on rapid franchise sales. The franchisor's ability to be sold at any time also creates uncertainty about future ownership.
Potential Mitigations
- Research the reputation and track record of BRIX Holdings with its other franchise concepts by speaking with a business advisor.
- It is important to ask current franchisees about any noticeable changes in culture, support, or costs since the acquisition.
- Your attorney should review the assignment clauses in the Franchise Agreement to understand your rights if the system is sold again.
Non-Disclosure of Parent Company
Low Risk
Explanation
The FDD discloses the parent and ultimate parent companies in Item 1. Furthermore, the financial statements in Exhibit E include a 'going concern' note which discusses the franchisor's reliance on its parent for liquidity and the parent's commitment to provide funding. Therefore, this specific risk of non-disclosure does not appear to be present, as the corporate structure and its financial implications are acknowledged.
Potential Mitigations
- It is always prudent for your accountant to confirm that all required financial statements, including those of a parent guarantor, are provided.
- Your attorney can help verify the legal structure of the franchisor and its parent entities to ensure full transparency.
- Questioning the nature of the relationship between the franchisor and its parent can provide clarity on operational and financial support.
Predecessor History Issues
Medium Risk
Explanation
Item 1 discloses that the current franchisor acquired the system from a predecessor, Clean Juice Holdings, LLC, in May 2024. However, the FDD contains numerous disclaimers (e.g., Note 1 in Item 20) stating that information from the predecessor for the period just prior to the acquisition is unavailable or has not been independently verified. This gap in the system's recent history could obscure potential issues that occurred under the previous owner, creating risk for a new franchisee.
Potential Mitigations
- Your attorney should carefully review all disclosures and disclaimers related to the predecessor entity.
- Question the franchisor about the circumstances of the acquisition and any known historical issues with the system.
- Speaking with franchisees who operated under the predecessor can provide invaluable, firsthand historical context.
Pattern of Litigation
Medium Risk
Explanation
Item 3 discloses one pending lawsuit against the predecessor franchisor filed by a former franchisee. The complaint alleges failure to update disclosure documents with material information and providing inaccurate Item 19 data. While this is only one case, allegations of inaccurate financial performance representations and disclosure failures are serious. This lawsuit, predating the current franchisor's acquisition, may indicate historical problems within the system that could persist.
Potential Mitigations
- Your attorney must carefully review the details of the litigation disclosed in Item 3, including the specific allegations and current status.
- It is advisable to discuss this litigation with the franchisor to understand their perspective and its potential impact on the system.
- Contacting other franchisees to ask about their experience with the accuracy of Item 19 could provide important context.
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
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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