Freeway Insurance
Initial Investment Range
$10,950 to $232,000
Franchise Fee
$3,000 to $73,000
We license third parties the right to own and operate a business that will primarily sell, service, and deliver insurance services and ancillary products to clients under the trademark Freeway Insurance®.
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Freeway Insurance April 14, 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
Confie Franchise Services, LLC (CFS) has a history of financial weakness. Audited financials for 2023 show a net loss of over $534,000, an accumulated deficit exceeding $1.6 million, and included a “going concern” warning from the auditor, indicating doubt about its ability to continue operating. Although 2024 showed a profit, a large accumulated deficit remains. Several state regulators require CFS to defer collecting initial fees from you due to this financial condition, signaling significant underlying risk.
Potential Mitigations
- Your accountant must conduct a thorough analysis of the financial statements for the past three years, including all footnotes and the parent company's commitment to provide funding.
- It is critical to ask your franchise attorney to explain the practical protections, or lack thereof, offered by the state-mandated fee deferrals.
- A business advisor can help you assess if the recent profitability in 2024 represents a sustainable turnaround or a temporary event.
High Franchisee Turnover
Low Risk
Explanation
The franchise system is very new, having started with only two franchised outlets at the beginning of 2023. While Item 20 data does not currently show a pattern of high franchisee terminations or failures, the system's lack of a long-term track record means the stability and success rate of its franchisees are still unproven. The limited operating history of the franchise network itself is a key risk factor to consider.
Potential Mitigations
- Engaging a business advisor to analyze the growth trajectory in Item 20 against the franchisor’s support capabilities is important.
- Speaking with the earliest-operating franchisees listed in Item 20 can provide crucial insights into the system's initial challenges and support.
- Your accountant should model different scenarios to account for the risks inherent in a new and rapidly growing system.
Rapid System Growth
Medium Risk
Explanation
The franchise system is growing very rapidly, expanding from 2 to 33 franchised units in just two years. When combined with the franchisor's recent history of financial losses, this rapid expansion creates a risk that its support systems for training, operations, and marketing may be strained or unable to keep pace with the needs of a quickly growing franchisee base. This could potentially dilute the quality of support you receive.
Potential Mitigations
- With your business advisor, you should question the franchisor about their specific plans and resource allocation for scaling up support staff and infrastructure.
- It is important to ask the newest franchisees about the current quality and responsiveness of the training and support they have received.
- An accountant should review the financial statements to assess if CFS has the capital to sustain both growth and robust franchisee support.
New/Unproven Franchise System
High Risk
Explanation
CFS is a new franchisor, formed in 2021 and beginning to franchise in 2022. The FDD explicitly flags its “Short Operating History” as a special risk. Investing in a new, unproven franchise system carries higher risk than an established one, as the business model, brand recognition, and support structures are not yet time-tested. The franchisor’s past financial instability further elevates this risk, making your investment's success heavily dependent on their new and unproven execution.
Potential Mitigations
- A thorough due diligence investigation into the franchisor's business plan and the experience of its management team is essential; your business advisor can help lead this.
- Negotiating more franchisee-favorable terms to offset the higher risk should be a priority for your franchise attorney.
- Your accountant should help you create conservative financial projections that account for the uncertainties of a new franchise system.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. Selling insurance is a well-established industry with consistent demand and is not dependent on temporary trends or fads. However, any business can be affected by economic cycles or shifts in consumer behavior, so long-term market awareness is always important for a small business owner.
Potential Mitigations
- Working with a business advisor to research the long-term stability and competitive landscape of the specific insurance market in your area is a valuable step.
- It is wise to ask your accountant to help you develop a business plan that is resilient to economic fluctuations.
Inexperienced Management
Medium Risk
Explanation
While the executives listed in Item 2 have experience within the insurance industry and the parent company's network, the franchisor entity itself is very new. The team's collective experience in specifically managing and supporting a franchise system, which is different from running company-owned stores, appears limited. This could impact the quality of franchise-specific support, systems, and strategic guidance you receive as you build your business, presenting a moderate risk.
Potential Mitigations
- In your discussions with the franchisor, asking about their specific experience in franchising and any external franchise consultants they have engaged is advisable.
- A business advisor can help you evaluate whether the management team's skills align with the needs of a franchise system.
- Inquiring with the earliest franchisees about their satisfaction with the management's franchise support can provide valuable insight.
Private Equity Ownership
Medium Risk
Explanation
CFS is a subsidiary of a larger holding company, Confie Holding II Co. This structure can sometimes involve private equity-like dynamics where decisions might prioritize short-term investor returns. The Franchise Agreement allows CFS to sell or assign the agreement to any other entity without your consent. This could mean a new owner with different priorities or less capability could take over, creating uncertainty for your long-term investment.
Potential Mitigations
- Your attorney should discuss the potential implications of the franchisor's right to assign the agreement without your consent.
- A business advisor could help research the parent company's history and its typical approach to managing its subsidiary brands.
- Asking existing franchisees about any changes in system direction or support levels is an important due diligence step.
Non-Disclosure of Parent Company
Medium Risk
Explanation
CFS is a subsidiary of Confie Holding II Co. and the franchisor's own financial statements note a reliance on the parent for funding to continue as a going concern. However, the parent company's financial statements are not included in the FDD. Without them, you cannot independently verify the parent's ability to provide the promised support, which presents a risk given the franchisor's own history of financial weakness. This lack of transparency is a moderate concern.
Potential Mitigations
- Your accountant should note the absence of parent company financials as a limitation in your due diligence.
- It is important for your attorney to confirm if state law should have required the inclusion of the parent's financials given the circumstances.
- You should ask the franchisor why the parent company's financials are not disclosed and what assurances of support they can provide in writing.
Predecessor History Issues
Low Risk
Explanation
This specific risk was not identified in the FDD package. Item 1 explicitly states that the franchisor does not have any predecessors that offered franchises. Therefore, there is no hidden history of past system failures or challenges under a different company name to be concerned about. You are dealing with a new franchisor entity.
Potential Mitigations
- Your attorney can confirm the franchisor's corporate history to ensure the 'no predecessor' statement is accurate.
- A business advisor can help you understand that while there is no predecessor history, the lack of any history also presents its own set of risks associated with new ventures.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package. Item 3 states that there is no litigation that must be disclosed. This indicates that, as of the FDD's issuance date, neither the franchisor nor its key personnel were involved in the types of significant legal actions that are required to be reported, such as those involving fraud or franchise law violations. This is a positive indicator.
Potential Mitigations
- Your attorney can perform an independent public records search to confirm the absence of recent litigation.
- Including questions about any past or pending informal disputes in your conversations with current and former franchisees is a good due diligence practice.
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
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.
