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Dimensional Search
How much does Dimensional Search cost?
Initial Investment Range
$103,900 to $131,600
Franchise Fee
$88,000
As a Dimensional Search franchisee you will operate an executive search and recruiting business.
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Dimensional Search March 14, 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
The franchisor, Sanford Rose Associates International, LLC (SRAI), explicitly discloses that its financial condition may impact its ability to provide support. Financials in Item 21 show Member's Equity is only $62,712 against over $4.3 million in liabilities. Crucially, supplementary data reveals the 'Dimensional Search' brand you would operate is unprofitable, posting a net loss of nearly $900,000 in 2024. This poses a significant risk to the support and viability of your specific brand.
Potential Mitigations
- An experienced franchise accountant must thoroughly review all financial statements, including footnotes and supplementary data for the specific brand.
- Your attorney should advise on the implications of the franchisor's explicit risk warning.
- A business advisor can help you assess if the franchisor has the resources to support its network despite the low equity.
High Franchisee Turnover
Medium Risk
Explanation
The franchise system is very new, making trend analysis difficult. However, Item 20 data for 2024 shows one franchisee terminated out of a starting base of seven units. This represents a potentially concerning 14% turnover rate in the system's first full year of operation. This could indicate early challenges with the business model or franchisee satisfaction that warrant further investigation before you invest.
Potential Mitigations
- It is crucial to contact the former franchisee listed in Exhibit One to understand their reasons for leaving.
- A business advisor can help you analyze the growth and turnover data in the context of a new system.
- Your attorney can assist in formulating questions for both former and current franchisees.
Rapid System Growth
High Risk
Explanation
Item 20 data shows extremely rapid expansion, growing from zero to 41 franchised outlets in just two years (2023-2024). When combined with the franchisor's low equity and stated financial condition risks in Item 21, this rapid growth may strain SRAI's ability to provide adequate and timely training, support, and resources to all new franchisees. The quality of support you receive could be diluted as a result.
Potential Mitigations
- Engaging a business advisor to assess the franchisor's capacity to support this rapid growth is highly recommended.
- You should ask current franchisees about the quality and responsiveness of the support they are receiving.
- An accountant should review the financials to determine if SRAI is investing in support infrastructure to match its growth.
New/Unproven Franchise System
High Risk
Explanation
The Dimensional Search franchise is a new system, having only started franchising in 2023, as shown in Item 20. The brand's financial data in the Item 21 exhibits shows it is not yet profitable. Investing in such a new and unproven system carries higher risks related to the viability of the business model, brand recognition, and the franchisor's ability to provide effective, time-tested support.
Potential Mitigations
- A thorough investigation of the management team's prior industry and franchising experience is essential, which a business advisor can help with.
- Speaking with the earliest franchisees about their experiences is critical.
- Your accountant should carefully analyze the financials to assess the system's path to profitability and capitalization.
Possible Fad Business
Low Risk
Explanation
The executive search industry is established, not a fad. However, the success of your specific franchise will depend on your ability to specialize and differentiate your services within a competitive market. SRAI encourages specialization in a particular industrial or institutional sector, which suggests a strategy to mitigate the risks of being a generalist in a crowded field.
Potential Mitigations
- A business advisor can help you research the long-term demand for executive search services in your chosen specialization.
- Evaluating the franchisor's plans for innovation and technology is important for staying competitive.
- Consider the business model's resilience to economic downturns with your financial advisor.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor's management team, detailed in Item 2, appears to have extensive experience in the recruiting and staffing industry, including with affiliated and parent companies. However, a lack of direct franchising experience can sometimes lead to challenges in supporting franchisees effectively. The quality of support and systems often reflects management's understanding of the franchisee-franchisor relationship.
Potential Mitigations
- A business advisor can help you thoroughly vet the management team's background and specific experience in managing a franchise system.
- Discuss the quality of support and management's accessibility with current franchisees.
- You should inquire directly about how the management team's experience translates into tangible benefits and support for franchisees.
Private Equity Ownership
Medium Risk
Explanation
Item 1 discloses a complex ownership structure involving parent companies like NL Starfish Partners, Inc. and Next Level Exchange, LLC. While not explicitly identified as a private equity firm, this corporate structure could involve investment partners with priorities focused on returns, which may influence decisions on fees, support levels, or an eventual sale of the franchise system. The Franchise Agreement allows SRAI to sell the system without your consent.
Potential Mitigations
- A business advisor can help you research the parent companies and their track record with other businesses.
- Discussing any changes in the system since the new ownership structure was established with current franchisees is advisable.
- Your attorney can explain the implications of the franchisor's right to assign the agreement to a new owner.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 discloses the parent companies, and their financials are not provided. However, there is no parent company guarantee of SRAI's obligations. Therefore, the financial stability of SRAI on its own, as disclosed in Item 21, is the primary consideration. The lack of a parent guarantee heightens the risk associated with SRAI's own weak financial position.
Potential Mitigations
- Your attorney should confirm that no parent guarantee is offered or implied.
- An accountant should focus the financial review on SRAI's standalone ability to meet its obligations.
- Inquiring with a business advisor about the parent's informal support for its subsidiaries could provide additional context.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 describes the predecessor and ownership history. There are no negative historical issues like bankruptcy or significant litigation associated with these predecessors disclosed in Items 3 and 4. The franchise system itself is new, so there is no long franchisee history under predecessors to analyze. The focus remains on the current franchisor's performance and stability.
Potential Mitigations
- Your attorney should still review the predecessor information in the FDD for any subtle red flags.
- A business advisor can help you research the history of the parent companies for additional context.
- It is always a good practice to ask long-tenured employees or affiliates about the company's history.
Pattern of Litigation
Low Risk
Explanation
Item 3 discloses one concluded regulatory action by the State of Illinois against SRAI for inadvertently failing to register the franchise offering before making sales. While this was resolved, it indicates a past compliance failure. There are no other disclosures of litigation involving claims of fraud, misrepresentation, or a pattern of disputes with franchisees. The absence of such a pattern is a positive sign.
Potential Mitigations
- Your attorney should review the details of the Illinois regulatory action and its resolution.
- It is wise to ask the franchisor what measures have been implemented to prevent future compliance issues.
- A discussion with your business advisor can help place this single past issue in the proper context of your overall risk assessment.
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.
