Explanation

The FDD does not indicate that the franchisor is growing at a rate that would strain its support systems. The net outlet growth was negative in 2023 and moderate in 2024. This risk was not identified. Rapid growth can sometimes stretch a franchisor's ability to provide adequate training and support, potentially harming new and existing franchisees. Slower, more controlled growth can be a sign of a more stable system.

Potential Mitigations

• Engage a business advisor to assess whether the franchisor's support infrastructure is appropriate for its current size and any future growth plans.
• Discussions with franchisees who have been in the system for varying lengths of time can provide insight into the consistency of franchisor support.
• An accountant's review of the franchisor's financials can help determine if they are investing adequately in support systems relative to their growth.

Explanation

This risk was not identified. The franchisor's predecessor has been offering franchises since 2007, and the current management team has significant tenure within the company and industry. A long operational history can indicate a more tested business model and experienced support system. New franchise systems, by contrast, may present higher risks due to unproven models, minimal brand recognition, and potential instability as they navigate initial growth phases.

Potential Mitigations

• Your business advisor can still help you research the company's history and the specific industry experience of its key leadership.
• It is always prudent for your attorney to review the full history of the franchisor and any predecessors as disclosed in Item 1.
• Speaking with long-term franchisees can provide valuable context on the system's evolution and management's effectiveness over time.

Explanation

This risk was not identified. The business model, focused on glass and window repair, replacement, and restoration, serves a consistent consumer and commercial need and is not based on a short-term trend. A business tied to a fad faces the risk of declining demand as public interest wanes, potentially jeopardizing your long-term investment even if your contractual obligations to the franchisor continue.

Potential Mitigations

• Your business advisor can help you conduct independent market research to confirm the long-term demand for the services in your area.
• Assessing the system's resilience to economic downturns and changing consumer habits is a valuable exercise to do with your financial advisor.
• Discuss the franchisor's plans for future innovation and service development to ensure they are focused on long-term market relevance.

Explanation

This risk was not identified in the FDD. Item 2 indicates that the key executives have substantial and long-term experience with The Glass Guru brand and in the industry, with some having been with the predecessor company since 2007. This level of experience can be a positive indicator for system stability and support. Inexperienced management can pose a risk if they lack the expertise to manage a franchise system effectively.

Potential Mitigations

• A business advisor can help you evaluate the specific franchising and industry experience detailed for each executive in Item 2.
• Speaking with current franchisees about their direct experiences with the management team can provide valuable, real-world insight.
• Your attorney can help you frame questions for the franchisor about their management philosophy and strategic direction.

Explanation

This risk was not identified in the FDD. Item 1 does not indicate that the franchisor is owned by a private equity firm. When a franchise is PE-owned, there can be a risk that decisions are focused on short-term investor returns, potentially through increased fees or reduced franchisee support, rather than the long-term health of the brand and its franchisees. Such ownership structures can also increase the likelihood of the system being sold.

Potential Mitigations

• It is always a good practice to ask your attorney to verify the full ownership structure of the franchisor.
• Researching a private equity firm's history with other franchise brands can provide insight into their typical operating strategy; a business advisor can assist with this.
• Franchisees in PE-owned systems should have their attorney review the assignment clauses in the Franchise Agreement to understand what happens if the brand is sold.

Explanation

This risk was not identified. The FDD provides information about the franchisor, The Glass Guru Enterprises, Inc., and its one affiliate, but does not indicate the existence of a parent company whose financials would be material to your investment decision. A failure to disclose a parent company, especially if the franchisor is a thinly capitalized subsidiary, can hide financial instability and create significant risk for franchisees.

Potential Mitigations

• An attorney should always review Item 1 and Item 21 to confirm the corporate structure and ensure all relevant entities have been disclosed.
• If a parent company does exist and guarantees the franchisor's performance, your accountant should review its financial statements.
• Your attorney can advise on whether the franchisor's financials appear sufficient on their own or if a parent guarantee would be necessary.

Explanation

This risk was not identified in the FDD. Item 1 discloses a predecessor entity and the transition to the current corporate structure. There are no indications of undisclosed negative history related to this predecessor. Concealing or downplaying a predecessor's history of litigation, bankruptcy, or high franchisee failure rates can obscure systemic problems and prevent you from making a fully informed investment decision.

Potential Mitigations

• A franchise attorney should review the predecessor information in Items 1, 3, and 4 to ensure complete disclosure.
• Conducting independent online research on the predecessor entity can sometimes uncover additional information; a business advisor may help.
• Speaking with long-tenured franchisees who operated under the predecessor can provide valuable historical context.

Explanation

This risk was not identified. Item 3 states, "No litigation information is required to be disclosed in this Item." The absence of significant litigation, particularly lawsuits initiated by franchisees alleging fraud or misrepresentation, is a positive indicator. A pattern of such litigation can signal systemic problems with a franchisor's sales practices, support obligations, or overall business model.

Potential Mitigations

• Your attorney should always carefully review the details of any litigation that is disclosed in Item 3.
• It is wise to ask current and former franchisees about any past or current disputes, even those not disclosed in the FDD.
• A business advisor can help you research online for any news reports or franchisee discussion forums that may mention legal disputes.