Frios Pops Logo

Frios Pops

Frios Franchising Company, LLC
https://www.friospops.com
1-817-675-6882
1201 West I-65 Service Road North, Mobile, Alabama 36618

Initial Investment Range

$59,548 to $211,417

Franchise Fee

$43,000 to $154,000

The franchise that we offer is for Frios gourmet pops, a mobile business featuring a menu of specialty gourmet ice pops and other menu items.

Enjoy our complimentary free risk analysis below

Unlock the full risk analysis to access 9 more categories covering 100+ risks.

Frios Pops April 28, 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.

1

Franchisor Stability Risks

Start Here
Total: 10
3
4
3

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor, Frios Franchising Company, LLC (Frios LLC), explicitly warns of its financial condition. Audited financial statements in Exhibit D show negative total member's equity of ($254,003) as of year-end 2024, meaning liabilities exceed assets. While profitable in 2024, the company had net losses in 2023 and 2022. This financial weakness calls into question its ability to provide support and remain a stable partner, representing a significant risk to your investment.

Potential Mitigations

  • A franchise accountant must thoroughly review the audited financials, including all footnotes and cash flow statements, to assess the company's viability.
  • Discuss the implications of the franchisor's negative net worth and reliance on new franchise sales for profitability with your financial advisor.
  • Your attorney should evaluate any state-mandated financial assurances, like bonds or escrow, that may be required due to this financial condition.
Citations: Item 21, Exhibit D

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a concerning number of franchise exits. In 2024, 11 out of 89 starting units (12.4%) left the system through termination, non-renewal, or ceasing operations. This includes 7 terminations and 3 non-renewals. This rate of turnover is a significant indicator of potential systemic problems, such as franchisee dissatisfaction or issues with the business model's profitability or sustainability, which could directly impact your potential for success.

Potential Mitigations

  • It is critical to contact a significant number of former franchisees listed in Exhibit G to understand why they left the system.
  • Your business advisor can help you calculate and analyze the turnover rates over the past three years to identify trends.
  • Discuss the high number of terminations and non-renewals directly with the franchisor and evaluate the reasonableness of their explanations.
Citations: Item 20

Rapid System Growth

High Risk

Explanation

The system is growing, with 30 new franchised outlets opened in 2024. However, this growth is paired with significant financial weakness, including negative equity as shown in Item 21. Such rapid expansion without a strong financial foundation could strain the franchisor's ability to provide adequate training, site selection assistance, and ongoing operational support to all franchisees, potentially diluting the quality of support you receive.

Potential Mitigations

  • Question the franchisor on how their support infrastructure is scaling to match the pace of unit growth; a business advisor can help evaluate their plans.
  • In speaking with franchisees, ask newer operators about the quality and timeliness of the support they received during their opening phase.
  • Your accountant should analyze whether the franchisor's cash flow can sustain support operations without heavy reliance on new franchise sales.
Citations: Item 20, Item 21

New/Unproven Franchise System

Medium Risk

Explanation

Frios LLC began franchising in December 2018, acquiring the system from a predecessor. While not a brand-new startup, it is still a relatively young franchise system. A shorter operational history means the business model, support systems, and brand recognition may not be as proven or robust as those of more established franchise brands. This presents a higher level of inherent risk regarding long-term market viability and system stability.

Potential Mitigations

  • A business advisor can help you conduct extensive due diligence on the long-term sustainability of a mobile gourmet ice pop business.
  • In your discussions with existing franchisees, focus on the evolution of the system and the franchisor's ability to adapt and support them over time.
  • Your attorney should carefully review the history of the predecessor and how the acquisition may have impacted the system.
Citations: Item 1, Item 2

Possible Fad Business

Medium Risk

Explanation

The business model is centered on gourmet ice pops, a product that could be subject to changing consumer trends and seasonality. While the mobile concept offers flexibility, there is a risk that the core product's appeal could diminish over time if it is part of a short-term food trend. The FDD provides limited information on how Frios LLC plans to innovate or evolve the product line to ensure long-term, sustained consumer demand.

Potential Mitigations

  • A business advisor can help you research the broader frozen dessert market to assess the long-term viability of a niche ice pop concept.
  • Question the franchisor about their research and development process for new products and flavors to adapt to changing tastes.
  • With your financial advisor, analyze the business's seasonality and develop a financial plan that accounts for potential off-season revenue dips.
Citations: Item 1, Item 11

Inexperienced Management

Medium Risk

Explanation

While some members of the management team have prior franchise experience, others are relatively new to their roles or to Frios LLC. For example, the Director of Franchise Development joined in April 2025 and the Brand President in November 2024. Leadership changes and newer executives in key roles can introduce uncertainty regarding the consistency and quality of franchise system management, strategic direction, and franchisee support, which are critical for a young system.

Potential Mitigations

  • When interviewing franchisees, ask specific questions about their interactions with and the effectiveness of the current management team.
  • A business advisor can help you research the past performance and reputation of the key executives in their prior roles.
  • Directly question the franchisor about the experience and long-term vision of the newer members of their leadership team.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package, as there is no disclosure of private equity ownership in Item 1. However, it's a risk to be aware of in franchising, as PE ownership can lead to a focus on short-term profits over the long-term health of the brand. The Franchise Agreement does allow the franchisor to sell or assign the agreement to any party without your consent, which is a related risk.

Potential Mitigations

  • It is wise to ask your attorney to explain the implications of the franchisor's right to sell the entire system without franchisee consent.
  • Your business advisor can help you research the current ownership structure of Frios LLC and its parent company.
  • When speaking with other franchisees, you could inquire if they are aware of any potential sales of the company.
Citations: Item 1, Item 17, FA § 14.A

Non-Disclosure of Parent Company

Medium Risk

Explanation

The FDD discloses a parent company, FGP Holding, LLC. However, the parent company does not provide a guarantee for Frios LLC's performance, nor does it provide its own financial statements. Given Frios LLC's negative equity, the financial strength and commitment of the parent company is a material fact for assessing overall system stability, but this information is not available in the FDD package for you to review.

Potential Mitigations

  • Your accountant should assess the franchisor's financials on a standalone basis, noting the increased risk due to the lack of a parent guarantee.
  • Ask your attorney to inquire if the parent company would be willing to provide a performance guarantee.
  • A business advisor can help you research the parent company to the extent possible through public records to understand its history and scale.
Citations: Item 1, Item 21

Predecessor History Issues

Low Risk

Explanation

The franchisor discloses that it acquired the system from a predecessor, FRIOS Gourmet Pops LLC, in 2018. The document does not contain negative history like litigation or bankruptcy related to the predecessor. However, when a system changes hands, it can lead to shifts in culture, support, and operational focus. Understanding the transition and any inherited issues is important for assessing the current state of the franchise.

Potential Mitigations

  • When speaking with long-term franchisees, ask about their experience under the predecessor and how the system has changed since the acquisition.
  • Your attorney should confirm that all required disclosures regarding the predecessor have been made.
  • A business advisor can help you understand the potential challenges that can arise when a franchise system is acquired by new ownership.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states, "No litigation is required to be disclosed in this Item." The absence of disclosed litigation, particularly actions initiated by franchisees alleging fraud or misrepresentation, is a positive indicator. However, this does not guarantee a dispute-free history, as some disputes may not meet the legal criteria for disclosure.

Potential Mitigations

  • Your attorney can conduct independent searches for litigation involving the franchisor or its principals as part of comprehensive due diligence.
  • Ask current and former franchisees about any disputes they may have had or are aware of within the system.
  • It is prudent for your attorney to review the dispute resolution clauses in the Franchise Agreement to understand the process if a conflict does arise.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
6
3
6

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.

3

Financial & Fee Risks

Total: 10
1
7
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.

4

Legal & Contract Risks

Total: 16
7
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.

5

Territory & Competition Risks

Total: 5
2
2
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.

6

Regulatory & Compliance Risks

Total: 10
5
2
3

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
1
2
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
5
9
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.

10

Miscellaneous Risks

Total: 1
1
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.