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Fuse Service
How much does Fuse Service cost?
Initial Investment Range
$91,700 to $222,800
Franchise Fee
$24,000
The franchise that we offer is for FUSE Service, a business that provides appliance repair, maintenance, and installation services.
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Fuse Service April 19, 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, Fuse Franchising, Inc. (Fuse Franchising), is profitable, but the auditor's report includes a significant 'Emphasis of Matter' paragraph. This highlights extensive transactions with affiliates, including a large loan receivable from a related party ($301,847 in 2024). The auditor notes the financials may not reflect what would have occurred independently. This reliance on affiliate relationships creates a potential financial stability risk if those affiliates face issues, impacting the support you receive.
Potential Mitigations
- Your accountant must carefully analyze the audited financial statements, paying close attention to the footnotes and the auditor's 'Emphasis of Matter' paragraph concerning related-party transactions.
- A discussion with your financial advisor is needed to assess the risk posed by the large loan to an affiliate and the franchisor's overall financial stability.
- It is advisable to ask the franchisor for more details about the nature and health of its affiliate relationships during your due diligence calls.
High Franchisee Turnover
High Risk
Explanation
The FDD discloses a very high rate of franchisee turnover. In 2024, there were four terminations from a starting base of 16 franchised outlets, representing a 25% termination rate for the year. This level of turnover is a significant red flag and may indicate systemic problems, such as franchisee unprofitability, dissatisfaction with the system or support, or overly aggressive enforcement by Fuse Franchising. This suggests a potentially high risk of failure for new franchisees.
Potential Mitigations
- It is critical to contact several former franchisees listed in Exhibit G to understand why they left the system; your attorney can help formulate probing questions.
- Analyzing the turnover rate and its potential impact on the system's stability should be a key topic of discussion with your business advisor.
- You should directly question the franchisor about the reasons for the high number of terminations disclosed in Item 20.
Rapid System Growth
High Risk
Explanation
The franchise system is undergoing extremely rapid growth, expanding from 5 to 34 franchised outlets in the two years from 2022 to 2024. When combined with the high termination rate noted in Item 20, this rapid expansion may suggest that the franchisor's support infrastructure could be strained. A potential risk is that Fuse Franchising may not be able to provide adequate and timely training, site selection assistance, or operational support to all franchisees.
Potential Mitigations
- A thorough discussion with your business advisor is necessary to evaluate if the franchisor's support systems are robust enough to handle this rapid growth.
- Inquiring with both new and established franchisees about the current quality and responsiveness of franchisor support is a crucial due diligence step.
- You should ask the franchisor directly about their specific plans to scale their support staff and infrastructure to match the system's growth.
New/Unproven Franchise System
High Risk
Explanation
Fuse Franchising is a relatively new franchisor, having started offering franchises in October 2021. While its principals have prior industry experience through an affiliate company, the franchising entity itself has a limited track record of supporting a franchise system. This newness presents risks, including potentially underdeveloped support systems, evolving operational standards, and limited brand recognition, which can impact your business's initial performance and long-term stability.
Potential Mitigations
- Engaging a business advisor to perform deep due diligence on the management team's specific experience in supporting a franchise network is recommended.
- It is vital to speak with the earliest franchisees listed in Item 20 to gauge how the franchisor's support and systems have evolved since inception.
- Your accountant should carefully review the franchisor's financials in Item 21 to assess its capitalization and ability to sustain the system through its growth phase.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. The business model, providing appliance, electrical, and HVAC repair services, caters to a consistent and long-term consumer need for home maintenance. This type of service-based business is generally not considered a fad and has demonstrated market sustainability, reducing the risk that your investment is tied to a short-lived trend.
Potential Mitigations
- A business advisor can help you analyze long-term demand for home repair services in your specific market to confirm the model's viability.
- It is still prudent to ask the franchisor about their strategies for adapting to technological changes in appliances and HVAC systems.
- Evaluating the local competitive landscape with a marketing professional will help you understand the sustained demand relative to existing providers.
Inexperienced Management
Medium Risk
Explanation
The executives of Fuse Franchising have several years of operational experience in the home services industry through an affiliate company. However, their experience specifically in managing and supporting a national franchise system is relatively recent, beginning in late 2021. Inexperienced franchise management can sometimes lead to challenges in providing consistent, scalable support, training, and marketing guidance, which could affect your business's growth and operational efficiency.
Potential Mitigations
- In your discussions with existing franchisees, it's important to specifically inquire about the quality, consistency, and expertise of the support provided by the management team.
- A business advisor can help you assess whether the franchisor has hired experienced franchise professionals to supplement the founders' operational expertise.
- During your due diligence, asking the franchisor about their past challenges in scaling the franchise system and how they were resolved is advisable.
Private Equity Ownership
Low Risk
Explanation
This specific risk was not identified in the FDD package. Item 1 indicates that the franchisor is a privately held corporation and does not disclose any ownership by a private equity firm. This can be positive, as it may suggest that management's focus is on the long-term health of the brand and its franchisees rather than on short-term financial returns for outside investors.
Potential Mitigations
- It is still a good practice to ask the franchisor about their long-term plans for the company, including any potential future sale.
- Your attorney should confirm the ownership structure and verify there are no undisclosed controlling entities that might behave like a private equity firm.
- A business advisor can help you understand the pros and cons of different franchisor ownership structures.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. The franchisor properly discloses its affiliate companies in Item 1. However, the auditor's report in Item 21 emphasizes the extensive transactions with these affiliates and includes a significant loan receivable from them. While the parent is disclosed, the financial interdependence creates a risk that is analyzed under 'Disclosure of Franchisor's Financial Instability'.
Potential Mitigations
- An experienced franchise accountant should review the disclosures in Item 1 and the financials in Item 21 to analyze the relationship and financial dependency between the franchisor and its affiliates.
- Your attorney can help you ask targeted questions about the operational and financial health of the affiliated companies.
- Understanding these affiliate relationships is crucial for assessing the overall stability of the franchisor.
Predecessor History Issues
Low Risk
Explanation
This specific risk was not identified in the FDD package. Item 1 of the FDD does not list any predecessors for Fuse Franchising, Inc. This indicates that the current company did not acquire the franchise system from a prior entity, which simplifies the due diligence process as there is no hidden history of litigation, bankruptcy, or franchisee turnover from a previous owner to investigate.
Potential Mitigations
- Your attorney should still verify the franchisor's corporate history to ensure no predecessor entities have been omitted from the disclosure.
- It is always a good practice to ask early franchisees about the history of the system to confirm the information presented in Item 1.
- A business advisor can help research the background of the key executives for any involvement in prior, unlisted ventures.
Pattern of Litigation
Low Risk
Explanation
This specific risk was not identified in the FDD package. Item 3 states, "No litigation is required to be disclosed in this Item." This absence of disclosed litigation against the franchisor is a positive indicator, suggesting there is not a history of significant disputes with franchisees, regulators, or other parties concerning fraud, contract breaches, or franchise law violations.
Potential Mitigations
- Although no litigation is disclosed, your attorney may still recommend conducting a public records search to be thorough.
- During your calls with current and former franchisees, it is wise to ask about their experiences with disputes and how the franchisor handled them.
- A business advisor can help you assess whether the lack of litigation aligns with the franchisor's overall track record and reputation.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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.
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