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Core Group Restoration
How much does Core Group Restoration cost?
Initial Investment Range
$56,350 to $373,710
Franchise Fee
$26,100 to $96,210
CORE Group Restoration franchises provide disaster recovery and property damage restoration services to residential and commercial customers.
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Core Group Restoration May 28, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 19, 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
State regulators in Illinois and North Dakota have imposed a fee deferral requirement “because of our financial condition.” This is a significant warning, suggesting regulators perceive financial risk, despite audited financials that appear profitable. This could signal underlying instability or capitalization issues that might affect the franchisor's ability to provide long-term support. The financials also show large management fees paid to an affiliate and significant cash distributions to members.
Potential Mitigations
- An experienced franchise accountant must thoroughly analyze the financial statements, especially the large related-party transactions and cash distributions.
- It is critical to ask your attorney why state regulators required a fee deferral and what specific protections this offers you.
- Discuss the franchisor's capitalization and reliance on affiliate transactions with your financial advisor to assess long-term stability.
High Franchisee Turnover
Medium Risk
Explanation
Item 20 tables show a pattern of franchisee closures across both the Elite and Signature franchise types over the last two years. In 2024, four franchisees left the system. While the system is growing overall, this consistent churn could indicate underlying challenges with profitability, operational support, or the business model for some operators. This warrants further investigation into the reasons for these departures.
Potential Mitigations
- Contacting the former franchisees listed in Exhibit F is essential to understand why they left the system; your attorney can help you prepare questions.
- Discussing the closure rates and the support provided to struggling franchisees with a range of current operators should be a priority.
- A business advisor can help you analyze the turnover data in the context of the system's rapid growth.
Rapid System Growth
High Risk
Explanation
The Signature franchise model has experienced extremely rapid growth, more than doubling its unit count in 2023 and growing significantly again in 2024. Such rapid expansion can strain a franchisor's ability to provide adequate training and ongoing operational support. This risk is heightened by state-mandated fee deferrals which may indicate capitalization issues that make scaling support more difficult for CORE Group Restoration Franchising, LLC (CGR).
Potential Mitigations
- In discussions with the franchisor, inquire specifically about how they have scaled their support staff and systems to manage this rapid growth.
- Asking recent franchisees about the quality and timeliness of the support they received during their launch and first year is crucial.
- Your business advisor should help you evaluate if the franchisor's infrastructure, as described in Item 11, appears adequate for the system's current size.
New/Unproven Franchise System
Medium Risk
Explanation
While CGR has operated since 2019, it is a relatively young system undergoing rapid growth. Furthermore, the “Main Street” franchise model is brand new as of May 2025, meaning it has no operational track record. Investing in a newer system, and particularly a brand new model, carries higher risk regarding the unproven nature of its long-term success, brand recognition, and support systems.
Potential Mitigations
- Conduct extensive due diligence on the management team's prior industry and franchising experience with your business advisor.
- For the established models, speaking with the earliest franchisees is important to understand the system's evolution and the franchisor's performance over time.
- An attorney may be able to negotiate more franchisee-favorable terms to compensate for the higher risk associated with a younger system.
Possible Fad Business
Low Risk
Explanation
This risk was not identified. The property damage restoration industry is based on a consistent, ongoing need for services due to events like fires, floods, and storms, rather than a short-term trend. This type of business is generally not considered a fad. A long-term market for these services is likely to persist.
Potential Mitigations
- A business advisor can help you research the stability and long-term trends within the property restoration industry in your local market.
- Discuss the business model's resilience to economic cycles with your financial advisor.
- Review the range of services offered with the franchisor to understand how they adapt to different types of local demand.
Inexperienced Management
Medium Risk
Explanation
While the CEO has significant management experience, some key executives listed in Item 2 have limited or seemingly unrelated prior work history. For instance, the Chief Technology Officer's disclosed experience is very brief, and the Director of Concierge Services comes from an unrelated industry. This mixed experience level on the management team could impact the quality of technological development and specific areas of franchisee support.
Potential Mitigations
- In your discussions with the franchisor, it would be prudent to inquire further about the specific qualifications and track records of the management team.
- Questioning current franchisees about their direct experiences with the support provided by different departments can offer valuable insight.
- A business advisor can help you assess the overall strength and balance of the executive team.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified. Item 1 of the FDD does not indicate that the franchisor, CGR, is owned or controlled by a private equity firm. The primary risk associated with private equity ownership, such as a focus on short-term returns over long-term system health, does not appear to be present here.
Potential Mitigations
- Your attorney can help you confirm the ownership structure of the franchisor LLC to ensure there are no undisclosed controlling entities.
- It is always good practice to ask the franchisor about their long-term vision and any potential plans for selling the franchise system.
- Discuss the franchise's capital structure and long-term strategy with your financial advisor.
Non-Disclosure of Parent Company
High Risk
Explanation
Item 1 discloses a key affiliate, CGR Affiliate, that owns all intellectual property and receives substantial management fees. However, the FDD does not include this affiliate's financial statements. This omission makes it impossible to assess the complete financial health and stability of the enterprise that controls the brand and is a major recipient of funds from the franchisor, creating a significant information gap for you.
Potential Mitigations
- It is critical to have your attorney request the financial statements for the affiliate, CGR Affiliate, to get a full picture of the enterprise's stability.
- Your accountant should analyze the relationship and flow of funds between the franchisor and its affiliate.
- Discussing the operational and financial interdependence of the two companies with a business advisor is highly recommended.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified. The franchisor explicitly states in Item 1 that it has no predecessor entities. Therefore, there are no risks associated with a hidden or problematic history from a prior version of the company. You are dealing with the original franchising entity, which was formed in 2019.
Potential Mitigations
- Your attorney can help verify the franchisor's corporate history to confirm the 'no predecessor' statement.
- A business advisor can assist in researching the business history of the individual founders listed in Item 2.
- You can ask the franchisor directly about the origins of the business concept and operating system.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified. Item 3 of the FDD states that there is no litigation that requires disclosure. This suggests the franchisor has not been involved in significant legal disputes with franchisees, regulators, or other parties concerning issues like fraud, misrepresentation, or breach of contract. This is a positive indicator.
Potential Mitigations
- While the FDD shows no litigation, your attorney could conduct independent public record searches for any litigation not meeting the specific disclosure thresholds.
- Asking current and former franchisees about any informal disputes or disagreements they have had with the franchisor can provide additional insight.
- A business advisor can help you assess the overall health of franchisor-franchisee relationships based on your discussions with other operators.
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
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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