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Cleanstart Systems

Cleanfran, LLC
https://www.cleanstartsystems.com
1-315-383-8333
87 Grant Avenue, Auburn, NY 13021

How much does Cleanstart Systems cost?

Initial Investment Range

$30,300 to $38,400

Franchise Fee

$24,900

The franchise offered is a specialty services business providing commercial janitorial and cleaning services, as well as offering related services and products.

Enjoy our partial free risk analysis below

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Cleanstart Systems March 5, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 21, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
2
2
6

Disclosure of Franchisor's Financial Instability

Medium Risk

Explanation

The franchisor's audited financial statements show profitability. However, revenues declined from 2023 to 2024, and in both years, the owner's draws exceeded the company's net income. This practice of distributing more cash than earned, while not uncommon in private companies, could suggest a lack of reinvestment into the system's growth and support infrastructure, which may pose a risk to you over the long term.

Potential Mitigations

  • Your accountant should analyze the financial statements, focusing on trends in revenue, profitability, and cash flow.
  • A discussion with a financial advisor is important to assess if the franchisor's financial structure supports long-term franchisee assistance.
  • Inquire with existing franchisees about their perception of the franchisor's reinvestment into the brand and support systems.
Citations: Item 21, Exhibit B

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a franchise system that has been static for three years, with only two franchisees. More concerning is the inconsistency within the data: Table 2 reports one franchise transfer in 2024, while Table 3, which details the status of franchised outlets, reports zero transfers for the same period. This contradiction raises significant questions about the accuracy and reliability of the disclosed system data.

Potential Mitigations

  • Your attorney should scrutinize the inconsistencies in the Item 20 data and question the franchisor about them.
  • Discuss the system's static size and the data discrepancy with the current franchisees listed in Item 20.
  • An accountant can help you assess the risks associated with a stagnant system and questionable reporting.
Citations: Item 20

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD Package. The data in Item 20 indicates a static system with no net growth in the number of outlets over the past three years. A rapidly expanding system can sometimes strain a franchisor's ability to provide adequate support to its franchisees. However, the opposite concern of a stagnant system is present here.

Potential Mitigations

  • Have your accountant review the franchisor's financials in Item 21 to evaluate their capacity for supporting any future growth.
  • A business advisor can help you assess the franchisor's infrastructure and plans for managing expansion.
  • It is wise to discuss the quality and timeliness of franchisor support with existing franchisees.
Citations: Not applicable

New/Unproven Franchise System

High Risk

Explanation

The franchisor, Cleanfran, LLC (Cleanfran), began franchising in 2016 but has only two active franchisees as of the FDD issuance date. This indicates a very small, unproven franchise system that has not achieved significant growth or market validation over several years. Investing in such a system carries higher risks related to brand recognition, operational refinement, and long-term viability.

Potential Mitigations

  • A thorough due diligence process, with the help of a business advisor, is critical to investigate why the system has not grown.
  • An accountant should carefully examine the franchisor's financial stability and its reliance on franchise fees versus ongoing royalties.
  • Consult with your attorney about negotiating more favorable terms to compensate for the higher risk of an unproven system.
Citations: Items 1, 20, 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD Package. The commercial janitorial and cleaning industry is a well-established and mature market with consistent demand. It is not considered a business based on a short-term fad or trend. Your success will likely depend more on operational execution and local competition rather than fluctuating consumer interest in a novel concept.

Potential Mitigations

  • A business advisor can help you research the long-term stability and competitive landscape of the commercial cleaning market in your area.
  • It is prudent to evaluate the franchisor's plans for innovation and service development to stay competitive.
  • Discuss the business model's resilience to economic shifts with your financial advisor.
Citations: Not applicable

Inexperienced Management

Medium Risk

Explanation

While the principal, Robert Blount, has been involved in the cleaning industry since 2005, the franchising entity has only two franchisees after approximately eight years of operation. This suggests a lack of experience in successfully developing and scaling a franchise system. This may impact the quality of franchisee support, marketing, and strategic growth, despite the principal's industry knowledge.

Potential Mitigations

  • Question the franchisor directly about their franchising experience and the reasons for the system's limited growth.
  • A discussion with the two current franchisees about the quality of franchise-specific support they receive is essential.
  • Your business advisor can help you assess whether the management team has the necessary skills to grow a franchise network.
Citations: Items 1, 2, 20

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 does not indicate that the franchisor is owned or controlled by a private equity firm. The ownership structure appears to be a standard limited liability company. Therefore, risks specifically associated with short-term profit motives of private equity ownership do not appear to be present.

Potential Mitigations

  • Your attorney should always confirm the ownership structure detailed in Item 1 of the FDD.
  • It is a good practice to research the background of the franchisor's principals, which a business advisor can assist with.
  • Reviewing the franchisor's right to sell or assign the franchise in the Franchise Agreement is always a prudent step.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 discloses an affiliate, Clean Start Systems, LLC, but does not indicate the presence of a parent company. The franchisor, Cleanfran, LLC, appears to be the primary entity. Therefore, risks associated with an undisclosed parent company or the failure to provide required parent financials are not apparent.

Potential Mitigations

  • Your attorney can help verify the franchisor's corporate structure and identify any controlling entities.
  • It's important to have an accountant review the provided financial statements in Item 21 for any notes regarding guarantees or support from other entities.
  • Always clarify the roles and relationships of any affiliates mentioned in Item 1.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 states that the franchisor, Cleanfran, LLC, does not have a predecessor. The franchised business is modeled after an affiliate, but the franchisor itself did not acquire the system from a prior entity. Therefore, risks associated with an incomplete or negative history from a predecessor are not applicable.

Potential Mitigations

  • Your attorney should always confirm the predecessor information disclosed in Item 1.
  • It remains a good practice to ask long-term franchisees, if any, about the history of the system.
  • A business advisor can help you research the history of the brand and its affiliate.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 3 states that there is no litigation that requires disclosure. This suggests the franchisor and its management have not been involved in significant legal disputes with franchisees or regarding fraud, which is a positive indicator. However, this should be confirmed through broader due diligence.

Potential Mitigations

  • Your attorney can conduct independent searches for litigation involving the franchisor or its principals as a verification step.
  • Asking current and former franchisees about any disputes, settled or otherwise, can provide valuable insight.
  • A review of the dispute resolution procedures in the Franchise Agreement is always advisable with legal counsel.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
2
2
11

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: 10
5
5
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

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4

Legal & Contract Risks

Total: 16
6
4
6

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

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5

Territory & Competition Risks

Total: 5
3
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

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6

Regulatory & Compliance Risks

Total: 10
3
2
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

Unlock Full Risk Analysis

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7

Franchisor Support Risks

Total: 4
2
1
1

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

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8

Operational Control Risks

Total: 12
3
6
3

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.

9

Term & Exit Risks

Total: 18
9
6
3

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

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10

Miscellaneous Risks

Total: 1
1
0
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.