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Federal Injury Centers
How much does Federal Injury Centers cost?
Initial Investment Range
$94,300 to $324,000
Franchise Fee
$49,000
The franchise that we offer is for a Federal Injury Centers business, each referred to as a “Franchised Business” or “Clinic Location Franchise,” that either: (1) provides training and education to healthcare practitioners so that they become experienced in handling U.S. Department of Labor/The Office of Workers’ Compensation Programs injury claims from a medical office or facility under the Federal Injury Centers name and marks.
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Federal Injury Centers May 1, 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
Medium Risk
Explanation
The franchisor, Federal Injury Centers, LLC (FIC LLC), is a very young company, formed in 2020. While financial statements show strong profitability, a significant portion of net income is paid out to members as distributions rather than being reinvested. This strategy, for a rapidly growing system, may strain its ability to provide adequate long-term franchisee support. Your accountant should evaluate the franchisor's capital reinvestment strategy and its capacity to support the expanding network.
Potential Mitigations
- A franchise accountant should analyze the franchisor's financial statements, paying close attention to cash flow, debt, and the balance between member distributions and reinvestment in the company.
- Discuss the franchisor's capitalization and plans for funding future support and growth with your financial advisor.
- It is wise to ask the franchisor directly about their capital strategy for supporting the system's rapid expansion.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a concerning pattern of franchisee exits. Over the last two years, the annual rate of units that were terminated or ceased operations has exceeded 10% of the franchise system's size at the start of each year. This is a significant red flag that may indicate systemic issues within the business model, potentially related to franchisee profitability, satisfaction, or the level of support provided by FIC LLC, and warrants thorough investigation.
Potential Mitigations
- With your business advisor, it is critical to contact a significant number of former franchisees listed in Exhibit H to understand their reasons for leaving the system.
- Your accountant should help you calculate the precise turnover rates for the last three years and compare them to any available industry benchmarks.
- You should directly question the franchisor about the reasons for the high number of ceased operations and terminations.
Rapid System Growth
High Risk
Explanation
The system has more than doubled in size in three years, which constitutes very rapid growth for a company established in 2020. This aggressive expansion, combined with high franchisee turnover rates and significant profit distributions to owners, raises concerns about whether the franchisor's support infrastructure can adequately serve its growing number of franchisees. Over-expansion can lead to diluted support, poor quality control, and increased franchisee failure rates, posing a significant risk to your investment.
Potential Mitigations
- A business advisor can help you assess whether the franchisor's support staff and systems are sufficient for the current and projected number of units.
- It is essential to ask current franchisees, particularly those who opened recently, about the quality and timeliness of the support they receive.
- Your accountant should review the franchisor's spending on franchisee support relative to its revenue from franchise sales.
New/Unproven Franchise System
High Risk
Explanation
FIC LLC was established in January 2020 and began franchising just one month later. This makes it a very new franchisor with a limited track record. The business model's long-term viability, brand recognition, and operational systems are not yet fully proven in the marketplace. Investing in such a young system carries a higher level of risk compared to investing in a well-established brand with a long history of success and stable operations.
Potential Mitigations
- Conducting extensive due diligence by speaking with the earliest franchisees in the system is crucial for understanding its evolution and challenges.
- Your business advisor should help you carefully evaluate the franchisor's business plan and the long-term market demand for its specialized services.
- An attorney may be able to negotiate more favorable contract terms to compensate for the higher risk associated with a new system.
Possible Fad Business
Medium Risk
Explanation
The business model is highly specialized, focusing on processing U.S. Department of Labor/OWCP injury claims. This niche market, while potentially profitable, may be vulnerable to changes in federal regulations, government reimbursement rates, or the overall structure of the workers' compensation system. A prospective franchisee could find their business's viability significantly impacted by legislative or administrative changes beyond their or the franchisor's control, which makes it different from a business with a broader customer base.
Potential Mitigations
- Engaging a business advisor to research the stability and long-term outlook for the OWCP market is a prudent step.
- Discuss the potential impact of regulatory changes on the business model with the franchisor and your attorney.
- You should evaluate whether the business could pivot or adapt if its primary niche market were to change significantly.
Inexperienced Management
Medium Risk
Explanation
The executives' backgrounds listed in Item 2 show experience in the healthcare industry since 2015, but their specific experience managing a national franchise system, particularly one with such complex regulatory requirements, only dates back to 2020. Franchising is a distinct business model, and a lack of deep experience in supporting franchisees across multiple states can present risks related to the quality of training, marketing, and operational support you will receive.
Potential Mitigations
- Your business advisor can help you vet the specific franchising experience of the management team.
- Asking current franchisees about the competence and responsiveness of the franchisor's leadership team is a vital part of due diligence.
- It is advisable to inquire if the franchisor has engaged experienced external franchise consultants to support their management team.
Private Equity Ownership
Low Risk
Explanation
This risk, where a franchisor is owned by a private equity firm that might prioritize short-term returns over long-term system health, was not identified. Item 1 of the FDD does not indicate that Federal Injury Centers, LLC is owned by a private equity firm. However, it's always important to understand the franchisor's ownership structure and their long-term goals for the franchise system.
Potential Mitigations
- During due diligence, a business advisor can help you investigate the franchisor's ownership structure and any plans for a future sale of the company.
- It is always prudent to ask a franchisor about their long-term vision for the brand and its franchisees.
- Your attorney should review the assignment clauses in the franchise agreement to understand what happens if the franchisor is sold.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 discloses the franchisor and its affiliates but does not mention a parent company. In some cases, a franchisor might be a subsidiary of a larger parent corporation, and the financial health of that parent could be material to your investment. If a parent company's financials are required for disclosure but are withheld, it can obscure a complete view of the system's stability.
Potential Mitigations
- Your attorney can help verify the franchisor's corporate structure and determine if any undisclosed parent entities exist.
- If a parent company provides a guarantee, your accountant should ensure their financial statements are provided and reviewed.
- Understanding the full corporate web of the franchisor is a key part of the due diligence process a business advisor can assist with.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified, as Item 1 of the FDD states that the franchisor has no predecessors. When a franchisor acquires a business or its assets from a predecessor, it is required to disclose that history. This information is important because the predecessor's track record, including any litigation or franchisee failures, can provide valuable insight into the historical health and challenges of the franchise system you are considering joining.
Potential Mitigations
- Your attorney should always confirm the accuracy of the predecessor information disclosed in Item 1.
- If a predecessor is disclosed, a business advisor can help you research its history and reputation.
- Speaking with long-term franchisees who may have operated under a predecessor is crucial for a complete understanding of the system's history.
Pattern of Litigation
High Risk
Explanation
Item 3 reveals a significant pattern of legal and regulatory issues for such a young company. The franchisor settled one lawsuit by paying a franchisee $100,000, is currently in another lawsuit with a franchisee counterclaiming for deceptive practices, and has faced administrative actions in two states for selling unregistered franchises. This history suggests potential issues with the franchisor's compliance systems, sales practices, and franchisee relations, posing a high risk to a new franchisee.
Potential Mitigations
- A thorough review of all litigation and regulatory actions detailed in Item 3 with your attorney is absolutely essential.
- Treating this pattern of legal trouble as a major red flag and discussing its implications for your investment with your business advisor is highly recommended.
- You should request an explanation from the franchisor regarding these issues and the steps taken to prevent recurrence.
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.
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