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How much does Fried Chicken Master cost?
Initial Investment Range
$239,000 to $511,500
Franchise Fee
$95,000 to $105,000
As a Fried Chicken Master master franchisee, you will operate, and have the option to license others to operate Fried Chicken Master retail food service establishments that sell items from a proprietary menu featuring specialty and proprietary crispy fried chicken.
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Fried Chicken Master April 15, 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
High Risk
Explanation
The franchisor’s financial statements in Exhibit B indicate it is a new entity with a limited financial history and is reliant on initial franchise fees for revenue. The notes to the financials reveal that the company's only franchisee, located in Canada, ceased operations in 2023. This history suggests a significant risk regarding the brand's viability and the franchisor's ability to provide long-term support, representing a potential threat to your investment's stability.
Potential Mitigations
- A franchise accountant should conduct a detailed review of the franchisor's financial statements, including all footnotes and cash flow analysis.
- Understanding the franchisor's dependency on franchise fees versus ongoing royalties requires a thorough discussion with your financial advisor.
- It is crucial for your attorney to assess any financial performance guarantees or support obligations from the franchisor's foreign parent or affiliates.
High Franchisee Turnover
High Risk
Explanation
While Item 20 shows no US-based franchisee turnover because there are no US units, the notes to the financial statements in Exhibit B reveal a critical fact: the franchisor's only franchisee (in Canada) has ceased operations. This represents a 100% effective failure rate for the system to date. Such an event indicates extreme potential for systemic problems with the business model, support, or profitability, posing the highest level of risk to a new franchisee.
Potential Mitigations
- Your attorney must help you understand the implications of the sole existing franchisee having ceased operations.
- A business advisor can help you investigate the specific reasons for the Canadian unit's failure before making any investment.
- Discuss the extremely high risk indicated by this failure with your financial advisor to determine if the investment is prudent.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD package. The data in Item 20 shows that the franchisor has not yet established any franchises in the United States. Rapid growth can strain a franchisor's ability to provide adequate support, so its absence here means you will be part of the initial, slow-growth phase. However, this also carries the risks associated with a new system.
Potential Mitigations
- A business advisor can help you evaluate the franchisor's strategic plan for future growth and the infrastructure in place to support it.
- It is important to discuss with your attorney how your agreement might be affected if the system grows rapidly in the future.
- In your financial projections, your accountant should model scenarios for both slow and rapid system growth.
New/Unproven Franchise System
High Risk
Explanation
The franchisor explicitly discloses a 'Short Operating History' as a Special Risk. Item 20 confirms there are no operating US franchises, and the financials in Item 21 show a new enterprise. The business model is unproven in the United States, and its only Canadian franchisee has already ceased operations. This lack of a successful track record significantly increases your investment risk compared to an established system, as support systems and brand recognition are undeveloped.
Potential Mitigations
- Thoroughly investigate the business background and specific US market experience of the management team with your business advisor.
- Your attorney should attempt to negotiate more protective terms, such as lower initial fees or enhanced support obligations, to offset the higher risk.
- An accountant should help you develop conservative financial projections that account for the challenges of launching an unproven brand.
Possible Fad Business
Low Risk
Explanation
This risk was not identified. The franchised business, Fried Chicken Master, operates in the quick-service restaurant industry, which is a well-established and long-standing market segment. While there are popular trends within this industry, the core product of fried chicken is not generally considered a short-term fad. The concept has a history in Asia, suggesting a degree of sustainability.
Potential Mitigations
- A business advisor can help you research the long-term consumer demand for this specific style of fried chicken in your local market.
- Evaluating the franchisor's plans for product innovation and menu development with a food service consultant could provide insight into long-term viability.
- Your attorney should review the franchise agreement to see how easily you can adapt to changing consumer tastes.
Inexperienced Management
Medium Risk
Explanation
While the franchisor’s management has extensive experience operating the brand in Asia, the US-based entity, A QIN LLC (A QIN LLC), is new and has a limited, unsuccessful track record in North America, with its only franchisee having ceased operations. This lack of demonstrated success in the target market poses a significant risk, as strategies and support systems proven overseas may not translate effectively, potentially impacting your operational success and the quality of guidance you receive.
Potential Mitigations
- A business advisor should help you critically assess how management's overseas experience translates to the competitive US market.
- Questioning the franchisor about their specific strategies for the US and the lessons learned from the Canadian failure is a task for you and your attorney.
- Your accountant can help you evaluate the US entity's capitalization to determine if it has the resources to execute its plans.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 indicates that the franchisor is a wholly-owned subsidiary of a corporate entity, Super Qin Private Ltd., not a private equity firm. This structure may suggest a focus on long-term brand building rather than the shorter-term financial returns often associated with private equity ownership, though other corporate pressures can still exist.
Potential Mitigations
- Your attorney can help you verify the ownership structure of the franchisor and its parent company through public records.
- Understanding the parent company's long-term strategy for the brand can be explored in discussions with the franchisor, with guidance from your business advisor.
- It is wise to have your accountant review the financial relationship and any fund flows between the franchisor and its parent.
Non-Disclosure of Parent Company
Medium Risk
Explanation
The FDD discloses its parent company but explicitly states the parent does not guarantee A QIN LLC's obligations. Furthermore, the parent company's financial statements are not included. Given that the US franchisor is a new, thinly capitalized entity with a poor track record, this lack of a financial backstop from the more established parent entity presents a significant risk. The franchisor's ability to provide support or survive challenges on its own may be limited.
Potential Mitigations
- Your attorney should try to negotiate for a performance guarantee from the parent company.
- A thorough analysis of the US entity’s standalone financials by your accountant is critical to assess its ability to meet obligations without parent support.
- Discussing the parent company's commitment to the US market with a business advisor can provide important context.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD. Item 1 of the disclosure document explicitly states that the franchisor has no predecessors. This means the current entity is the original franchisor of this system in the US, and you do not need to be concerned about inherited issues, undisclosed liabilities, or a negative history from a prior company that operated the brand.
Potential Mitigations
- Your attorney can perform a corporate search to verify the franchisor's formation date and history to confirm the 'no predecessor' claim.
- A discussion with your business advisor can help you understand the risks and potential benefits of dealing with a first-generation franchisor.
- Even without predecessors, your accountant should still carefully analyze the franchisor's own financial and operational history since inception.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the provided FDD package. Item 3 states that there is no litigation that requires disclosure. The absence of legal disputes with franchisees, regulators, or suppliers is a positive sign, particularly for a new system. However, this could also be a reflection of its very limited operating history rather than a proven record of positive franchisee relations.
Potential Mitigations
- Your attorney can conduct an independent search of court records to verify the absence of litigation.
- A business advisor can help you investigate the franchisor's reputation and any informal disputes by speaking with industry contacts.
- Continuing to monitor Item 3 in future FDDs will be an important task for you and your attorney.
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
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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
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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
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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
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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