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Focus CFO

Focus CFO Group, LLC
https://www.focuscfo.com
1-614-944-5760
575 Charring Cross Drive, Ste. 102, Westerville, Ohio 43081

How much does Focus CFO cost?

Initial Investment Range

$36,000 to $64,000

Franchise Fee

$35,000

The franchise described in this franchise disclosure document is for the establishment and operation of a business providing fractional Chief Financial Officer services as an Area President, working to generate new clients within a coordinated client development system.

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Focus CFO April 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.

1

Franchisor Stability Risks

Start Here
Total: 10
1
3
6

Disclosure of Franchisor's Financial Instability

Medium Risk

Explanation

The franchisor's audited financial statements show growing revenue and profitability. However, the auditor's report notes a significant prior-year accounting error was corrected, indicating a past weakness in financial controls. A note also states the franchisor may rely on its parent company for financial support, which can suggest that the franchisor entity on its own may not be fully self-sufficient, despite the strong reported numbers. This creates some uncertainty about its standalone stability.

Potential Mitigations

  • Your accountant should carefully review the audited financials, including the footnotes regarding the 'Correction of Error' and the parent company's financial support commitment.
  • A business advisor can help you ask the franchisor to clarify the circumstances under which it would need to rely on its parent for support.
  • It is prudent for your attorney to confirm if the parent company has formally guaranteed the franchisor's obligations to you.
Citations: Item 21, FDD Exhibit D

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals an extremely high number of franchise cessations over the last two years, with a net decrease of 67 outlets from a starting base of 126. The franchisor, Focus CFO Group, LLC (Focus CFO), explains this is due to a major business model change, converting 'CFO' franchisees to non-franchise licensees. While explained, this massive churn indicates fundamental system instability and presents a significant risk that the model you are buying into could also be subject to dramatic changes.

Potential Mitigations

  • Discussing this high turnover and business model pivot with a significant number of current and former franchisees is critical for your due diligence.
  • A franchise attorney should help you understand the implications of the franchisor's willingness to fundamentally alter its business model.
  • Your business advisor can help you assess the viability and stability of the 'new' Area President model in light of this history.
Citations: Item 20

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD Package. The data in Item 20 shows a significant decrease in the number of franchise outlets over the past two years, not rapid growth. A franchisor expanding too quickly can strain its ability to provide adequate support to its franchisees.

Potential Mitigations

  • An accountant can help you review the franchisor's financial statements in Item 21 to assess if they have the capital and cash flow to support their existing system.
  • Speaking with franchisees who have been in the system for different lengths of time can provide insight into the consistency of franchisor support.
  • A business advisor can help you analyze the ratio of support staff to franchisees to gauge if the support infrastructure seems adequate.
Citations: Not applicable

New/Unproven Franchise System

Medium Risk

Explanation

Focus CFO began franchising in 2018, giving it several years of experience. However, Item 20 discloses a major pivot in its business model effective in 2023, shifting from franchising to CFOs to a new model of franchising to 'Area Presidents' for business development. This new model, which you are buying into, is therefore relatively recent and unproven in the marketplace, which increases your risk.

Potential Mitigations

  • Engage a business advisor to thoroughly investigate the track record and success of franchisees operating under this new 'Area President' model.
  • It is important to speak with the earliest franchisees under this new model to understand their experience and the maturity of the required support systems.
  • Your franchise attorney can help you understand any unique risks associated with being part of a recently restructured franchise system.
Citations: Items 1, 20

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD Package. The business model of providing fractional CFO services to small and medium-sized businesses is a recognized professional service and does not appear to be based on a short-term trend or fad. Investing in a fad business carries the risk of declining consumer interest, which could jeopardize the long-term viability of your investment.

Potential Mitigations

  • A business advisor can help you research the long-term demand for the services offered by the franchise in your local market.
  • Evaluating the franchisor's plans for innovation and adaptation to market changes is a prudent step.
  • Discuss the stability and resilience of the business model through various economic cycles with current franchisees.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 2 indicates that the key executives, including the founder, have extensive experience in the financial services industry. While some executives are recent hires, their backgrounds appear relevant. Inexperienced management can be a significant risk, as it may lead to poor strategic decisions and inadequate support for franchisees.

Potential Mitigations

  • Your business advisor can help you research the backgrounds of the key management team members listed in Item 2.
  • Inquiring with current franchisees about their direct experiences with the management team can provide valuable insight.
  • Your attorney can help you ask the franchisor about the specific franchising experience of their leadership team.
Citations: Not applicable

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 indicates the franchisor is owned by a holding company, which in turn is owned by the founder and a group of employees and franchisees. There is no mention of private equity ownership. Private equity ownership can sometimes lead to a focus on short-term profits over the long-term health of the franchise system.

Potential Mitigations

  • A franchise attorney can help you review Item 1 to confirm the ownership structure of the franchisor and its parent companies.
  • Researching the ownership entity can provide clarity on its background and typical investment strategies.
  • Speaking with longtime franchisees can reveal if there have been any ownership changes and what impact they had on the system.
Citations: Not applicable

Non-Disclosure of Parent Company

Medium Risk

Explanation

Item 1 discloses the parent company, Focus CFO Holdings, LLC. The financial statements in Item 21 include a note that the franchisor may rely on this parent for financial support. However, the parent company's own financial statements are not provided. This creates a risk because you cannot independently assess the financial health of the entity that the franchisor itself may depend on, making the support commitment uncertain.

Potential Mitigations

  • Your attorney should ask the franchisor for the financial statements of the parent company, given its role in providing financial support.
  • Have your accountant assess the franchisor's financials to determine the potential extent of its reliance on the parent company.
  • Understanding the legal enforceability of the parent's commitment to provide support is a key question for your attorney.
Citations: Item 1, Item 21 (Exhibit D)

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 does not disclose any predecessors from which the franchisor acquired its business. A predecessor with a history of problems, such as litigation or high franchisee failure rates, could be a red flag for the health of the system you are joining.

Potential Mitigations

  • Your attorney should confirm the predecessor history disclosed in Item 1 of the FDD.
  • Independent online research can sometimes uncover information about a brand's history prior to its current ownership structure.
  • Asking long-tenured franchisees about the history of the system can provide valuable context.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 3 states there is no litigation that requires disclosure. A pattern of lawsuits, particularly those initiated by franchisees alleging fraud or misrepresentation, can be a significant indicator of systemic problems within a franchise.

Potential Mitigations

  • A franchise attorney can help you review Item 3 and can also conduct independent searches for litigation involving the franchisor.
  • Inquiring with former franchisees about any legal disputes they may be aware of can sometimes provide additional information.
  • Understanding the nature of any disclosed litigation, whether initiated by or against the franchisor, is crucial.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
4
0
11

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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3

Financial & Fee Risks

Total: 10
2
4
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

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4

Legal & Contract Risks

Total: 16
10
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.

5

Territory & Competition Risks

Total: 5
1
0
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.

6

Regulatory & Compliance Risks

Total: 10
3
3
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
1
1

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
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.

9

Term & Exit Risks

Total: 18
7
1
10

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: 2
2
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.