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How much does Five Iron Golf cost?
Initial Investment Range
$1,728,500 to $4,405,000
Franchise Fee
$30,000 to $50,000
We offer franchises for high-tech, multi-functional indoor golf simulator and entertainment facilities open to the general public that offer top-of-the-line golf simulator bays, professional golf lessons, custom golf club fittings, weekly league play, monthly memberships, club storage, events of all sizes, ancillary game options, retail items and other products and services we require.
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Five Iron Golf May 15, 2025 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The audited financial statements for Five Iron Golf Franchising LLC (Five Iron) reveal significant financial weakness. It reported a net loss of over $896,000 in 2024 and has a member's deficit of nearly $1.5 million. A "going concern" note indicates reliance on its parent company for funding, whose own financials are not provided. This poses a substantial risk to Five Iron's ability to provide support and meet its obligations.
Potential Mitigations
- An experienced franchise accountant must perform a detailed analysis of the franchisor's financial statements, including the 'going concern' note.
- Your attorney should investigate the legal and financial relationship with the parent company and the nature of its support commitment.
- Engage a financial advisor to assess if the franchisor has sufficient capital to support its obligations and growth without relying on new franchise fees.
High Franchisee Turnover
High Risk
Explanation
While the franchise system is very young, the disclosures in Item 20 and Exhibit I reveal a notable turnover event. One of the first few franchisees signed left the system in 2024 before their location even opened. This early-stage pre-opening failure could be an indicator of potential issues with the site selection, build-out, or financing process for franchisees and is a concerning sign for a new system.
Potential Mitigations
- It is critical to contact the former franchisee listed in Exhibit I to understand why they left the system before opening.
- Your attorney should help you formulate specific questions for this former franchisee regarding their experience.
- Discuss the circumstances of this departure with the franchisor and evaluate their explanation with your business advisor.
Rapid System Growth
High Risk
Explanation
Five Iron is growing its company-owned outlets very rapidly while simultaneously launching its franchise program. Item 20 shows an increase from 10 to 25 corporate stores in just three years. This aggressive growth, combined with the weak financial condition shown in Item 21, could strain the company's resources, potentially compromising the quality and availability of franchisee support and training.
Potential Mitigations
- Question the franchisor on how their support infrastructure is scaling to handle both corporate and franchisee growth; a business advisor can help evaluate this.
- A thorough review of the franchisor's financials with your accountant is essential to assess if they have the capital to support this expansion.
- Interview the existing franchisees about the current quality and responsiveness of franchisor support.
New/Unproven Franchise System
High Risk
Explanation
Five Iron is a new and unproven franchise system, having been formed in 2022 and with only three franchised outlets open at the end of 2024. The franchisor explicitly highlights its "Short Operating History" as a special risk. Investing in a new system carries higher risk as the business model, support systems, and brand recognition are not yet well-established in a franchise context.
Potential Mitigations
- A business advisor should help you conduct extensive due diligence on the franchisor's management team and their prior experience in the industry and franchising.
- Speaking with the first few franchisees listed in Item 20 is crucial to understand their initial experiences.
- Your attorney may be able to negotiate more franchisee-favorable terms to compensate for the higher risk of joining an unproven system.
Possible Fad Business
Low Risk
Explanation
This specific risk was not identified. Indoor golf and entertainment centers represent a growing market segment, not a temporary fad. However, when evaluating any franchise, it is important to consider the long-term sustainability and consumer demand for its core products or services. A business tied to a short-lived trend could face declining sales once public interest wanes.
Potential Mitigations
- Engaging a business advisor to research market trends and the long-term viability of the core business concept is a prudent step.
- An accountant can help you model financial scenarios, including potential declines in consumer demand over the franchise term.
- Discuss the franchisor's strategies for innovation and adaptation to evolving market tastes with their management team.
Inexperienced Management
Low Risk
Explanation
This risk was not identified, as the management team described in Item 2 appears to have relevant experience. The executives have held senior roles within the parent company or have prior experience in franchising and related industries. It is generally important for a franchisor's leadership to have a strong background in both their specific industry and in managing a franchise system to provide effective support.
Potential Mitigations
- A business advisor can help you research the professional backgrounds of the key management personnel listed in Item 2.
- When speaking with current franchisees, inquire about their direct experiences with the management team's competence and support.
- During your own interactions, assess the professionalism and knowledge of the franchisor's leadership team.
Private Equity Ownership
Low Risk
Explanation
The FDD does not indicate that the franchisor is owned or controlled by a private equity firm. When a franchisor is PE-owned, there can be a risk that management decisions prioritize short-term investor returns over the long-term health of the franchise system. This can sometimes lead to reduced franchisee support or increased fees.
Potential Mitigations
- Your attorney should review the ownership structure disclosed in Item 1 to confirm the ultimate controlling parties.
- A business advisor can help you research the ownership of the parent company for any signs of institutional investment.
- Speaking with franchisees can provide insight into any recent changes in ownership or operational philosophy.
Non-Disclosure of Parent Company
High Risk
Explanation
The franchisor discloses its parent company and its financial dependence on it to continue as a "going concern." However, the parent company's financial statements are not provided in the FDD. This prevents you from fully assessing the financial strength of the entity that is propping up the franchisor, creating significant uncertainty about the system's long-term stability and the reliability of its financial backing.
Potential Mitigations
- Your attorney should formally request the parent company's audited financial statements from the franchisor for a complete risk assessment.
- An accountant's review is critical to determine if the parent company has the financial capacity to support the franchisor's ongoing losses and obligations.
- Your attorney should investigate the legal nature of the parent's support commitment to determine if it is a binding guarantee.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified, as the franchisor states in Item 1 that it has no predecessors. A predecessor is a company from which the franchisor acquired the main part of its business. Reviewing a predecessor's history of litigation, bankruptcy, or franchisee relations is important as it can reveal inherited issues or historical problems with the franchise system.
Potential Mitigations
- A business advisor can help conduct independent research to verify if any other entities previously operated a similar system that was acquired by the franchisor.
- Your attorney can confirm the franchisor's corporate history through public records searches.
- In discussions with the franchisor, confirm that the system was developed internally and not acquired from a prior operator.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified. Item 3 of the FDD indicates there is no material litigation history involving the franchisor, its predecessors, or its management that requires disclosure. A pattern of litigation, especially lawsuits from franchisees alleging fraud or misrepresentation, can be a major red flag about a franchise system's practices and health.
Potential Mitigations
- Your attorney can conduct independent public record searches for litigation that may not have met the technical disclosure threshold but could still be relevant.
- When speaking with current and former franchisees, it is wise to ask about any past or present legal disputes they are aware of within the system.
- Engaging an attorney to review the entire FDD package helps ensure no related disclosures in other Items were missed.
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
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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
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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
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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
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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.