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Ecomaids

ecomaids LLC
https://www.ecomaids.com
1-732-946-4300
142 State Route 34, Holmdel, New Jersey 07733

How much does Ecomaids cost?

Initial Investment Range

$129,149 to $150,949

Franchise Fee

$94,950

The franchise offered is for the right to operate an “ecomaids” cleaning business, which specializes in environmentally friendly cleaning services through a maintenance program for residential and commercial properties.

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Ecomaids August 5, 2024 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.

1

Franchisor Stability Risks

Start Here
Total: 10
3
3
4

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

Financial statements are for the guarantor parent, LD Parent, Inc., not ecomaids LLC (EM) itself. While the parent is profitable, it carries significant debt and relies on a portfolio of brands. This structure means you cannot assess the standalone financial health or viability of EM, which could be undercapitalized and dependent on its parent. The provided parent guarantee is a positive factor, but does not eliminate the risk associated with the franchisor entity's own potential financial weakness.

Potential Mitigations

  • Your accountant must analyze the parent company's consolidated financial statements, paying close attention to debt levels, cash flow, and the sources of revenue.
  • It is important for your attorney to review the parent guarantee to understand its scope and any limitations on its enforceability.
  • Discuss the franchisor's specific financial condition and its relationship with the parent company with your business advisor and existing franchisees.
Citations: Item 21, Exhibit I

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals an exceptionally high rate of franchisee failure. The system experienced a net loss of 18 franchised outlets in 2023, representing a 23.7% decline from the start of the year. The tables show 23 terminations in 2023 and 28 in 2022. Furthermore, Item 19 discloses that an additional 12 franchisees with 23 territories ceased operations in 2023 but were excluded from the performance data. This signals profound, systemic problems with franchisee success and profitability.

Potential Mitigations

  • You must treat this data as a critical red flag; a comprehensive discussion with your attorney and accountant about the viability of this franchise system is essential.
  • It is imperative to contact a significant number of the former franchisees listed in Exhibit H to understand why they left the system.
  • A business advisor can help you assess if the underlying business model is sustainable given the high rate of disclosed failures.
Citations: Item 19, Item 20

Rapid System Growth

Medium Risk

Explanation

While the system is growing, the high rate of franchisee terminations and cessations disclosed in Item 20 suggests that ecomaids LLC (EM) may be selling franchises faster than it can effectively support them or that the model itself is struggling. This rapid churn, combined with a complex corporate structure, indicates that the franchisor's support systems could be strained, potentially leading to inadequate assistance for new franchisees despite the fees you pay.

Potential Mitigations

  • In discussions with current franchisees, you should specifically inquire about the quality and timeliness of the support they receive from the corporate office.
  • Your business advisor should help you evaluate whether the franchisor's support infrastructure seems adequate for the number of operating units.
  • An accountant should review the franchisor's financials to assess its investment in franchisee support relative to its revenue from franchise sales.
Citations: Item 20, Item 21

New/Unproven Franchise System

High Risk

Explanation

Although the brand has existed since 2012, the current franchisor, ecomaids LLC (EM), has been franchising only since 2019. More importantly, the extremely high franchisee turnover rate detailed in Item 20 indicates the business model may be unproven in its ability to generate sustainable profits for franchisees. Investing in a system with such a high failure rate carries substantial risk, as the operational and support systems have not demonstrated consistent success across the network.

Potential Mitigations

  • Given the high failure rate, a thorough due diligence process involving discussions with many former franchisees is crucial.
  • Your accountant must help you develop extremely conservative financial projections, as the system's viability appears questionable.
  • A franchise attorney should be consulted to understand all potential risks associated with an investment in a system with this track record.
Citations: Item 1, Item 20, Item 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. A fad business is one tied to a short-lived trend, which can be risky for a long-term franchise investment. Your success depends on sustained consumer demand. It's important to assess if the product or service meets a lasting need or is merely a novelty that could lose appeal, leaving you with long-term contractual obligations after public interest has faded.

Potential Mitigations

  • Engage a business advisor to research the long-term market trends for environmentally friendly cleaning services to gauge sustainability.
  • Discuss the franchisor's strategy for innovation and adaptation to evolving consumer preferences with their management team.
  • Your financial advisor can help you evaluate the business model's resilience to economic shifts and changing trends.
Citations: Item 1, Item 11

Inexperienced Management

Medium Risk

Explanation

The Chief Executive Officer has been in her role only since May 2023. While other executives have experience with affiliated brands, the high rate of franchisee failure disclosed in Item 20 occurred under the watch of the broader management team. This raises questions about the leadership's ability to successfully manage this specific franchise system and provide the necessary support to ensure franchisee success, which presents a risk to your investment.

Potential Mitigations

  • When speaking with current and former franchisees, specifically ask about their confidence in and the effectiveness of the current management team.
  • A business advisor can help you further research the professional backgrounds and track records of the key executives listed in Item 2.
  • It is important to ask the franchisor direct questions about the steps management is taking to address the high franchisee turnover rate.
Citations: Item 2, Item 20

Private Equity Ownership

Medium Risk

Explanation

Item 1 indicates that ecomaids LLC (EM) is part of a portfolio of brands indirectly controlled by Levine Leichtman Capital Partners (LLCP), a private equity firm. This ownership structure can create risks where decisions prioritize short-term investor returns over the long-term health of the system or franchisee profitability. This might manifest as pressure to cut support costs, increase fees, or focus on rapid sales over sustainable growth, potentially impacting your business.

Potential Mitigations

  • A business advisor can help you research the private equity firm's reputation and its track record with other franchise systems.
  • In your discussions with current franchisees, inquire about any changes to the system's culture, support, or fee structures since the PE firm's involvement.
  • Your attorney should carefully review the franchisor's right to sell the system and the potential implications for you if a new owner takes over.
Citations: Item 1, Item 2

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. Franchisors are required to disclose parent companies in Item 1. If a franchisor is a thinly capitalized subsidiary, it may also be required to include the parent's financial statements. Failure to do so can hide financial instability. In this case, the parent company is disclosed and its financials are provided.

Potential Mitigations

  • Your attorney should always verify the corporate structure disclosed in Item 1 to ensure all relevant parent companies are identified.
  • If a parent company guarantee is offered, it's wise to have an accountant review the parent's financial statements for stability.
  • A business advisor can help research the relationship between the franchisor and its parent to understand the dynamics of their support.
Citations: Item 1, Item 21, Exhibit I

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 properly discloses that ecomaids LLC (EM) acquired the system from a predecessor, Thoughts Are Things Franchising, LLC. A failure to disclose or provide details about a predecessor's history can obscure past problems like litigation or high failure rates. In this case, the disclosure appears to meet requirements.

Potential Mitigations

  • It is good practice to have your attorney review the predecessor information in Items 1, 3, and 4 of any FDD.
  • With a business advisor, you can conduct independent research into the predecessor's reputation and historical performance.
  • Ask long-tenured franchisees about their experiences under any previous ownership.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states that no litigation is required to be disclosed. A pattern of lawsuits, especially those from franchisees alleging fraud or misrepresentation, can be a major red flag indicating systemic issues. The absence of such disclosures here is a positive factor, though it does not eliminate all other risks.

Potential Mitigations

  • Your attorney should always carefully review any litigation disclosed in Item 3 for patterns and potential risks.
  • It can be beneficial for a business advisor to help you search public records for any litigation that may not have met the threshold for disclosure.
  • When speaking with former franchisees, it's wise to ask about any legal disputes they may have had, even if not formally disclosed.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
8
1
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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3

Financial & Fee Risks

Total: 10
4
4
2

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.

4

Legal & Contract Risks

Total: 16
7
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.

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

Purchase the complete risk review to see all 102 risks across all 10 categories.

6

Regulatory & Compliance Risks

Total: 10
4
2
4

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.

7

Franchisor Support Risks

Total: 4
2
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

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
3
5
4

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
4
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

Purchase the complete risk review to see all 102 risks across all 10 categories.

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.