Explanation

This risk was not identified in the FDD. Item 20 data indicates a low rate of franchisee terminations, non-renewals, and other cessations over the past three years. Generally, high turnover can be a significant warning sign of systemic problems, such as franchisee unprofitability, dissatisfaction, or poor franchisor support. A stable franchise system is a positive indicator for prospective owners.

Potential Mitigations

• Even with low reported turnover, it is valuable to contact a diverse list of current and former franchisees from Item 20 to discuss their experiences.
• Your attorney can help you formulate insightful questions to ask former franchisees about their reasons for leaving the system.
• An accountant can help you analyze the multi-year turnover trends provided in the FDD for a complete picture.

Explanation

This risk was not identified. Item 20 data shows a modest and controlled rate of franchise growth over the last three years. The franchisor's financial statements in Item 21 do not appear to be strained by this growth. In general, a franchisor expanding too quickly may outpace its ability to provide adequate training and support, which can harm franchisees.

Potential Mitigations

• Discuss the franchisor's growth strategy and plans for scaling support systems with your business advisor.
• Asking existing franchisees about the current quality and responsiveness of franchisor support is a valuable step.
• Your accountant can review the franchisor's financials to assess if they have the resources to support future growth.

Explanation

The franchisor, Go Mini's Franchising, LLC, was formed in 2012 and began franchising the same year, giving it over a decade of operating history. Item 2 shows that key executives have significant experience in the industry. While any franchise carries risk, this system is established and is not an unproven startup. Therefore, the specific risks associated with a new or unproven system do not appear to be present.

Potential Mitigations

• It is still beneficial to conduct thorough due diligence on the management team's track record with your business advisor.
• Speaking with long-term franchisees about the system's evolution and stability can provide valuable insights.
• Your accountant can review the financials to confirm the franchisor's long-term stability and operational history.

Explanation

The portable storage and moving industry is well-established, serving consistent consumer and business needs for moving and storage. This business model does not appear to be based on a fleeting trend. A business with sustained, long-term demand is generally less risky than one tied to a short-lived fad. The franchisor has been operating since 2012, indicating a degree of market staying power.

Potential Mitigations

• Assess the long-term market demand for portable storage services in your specific territory with a business advisor.
• It is wise to evaluate the business model's resilience to economic downturns with your financial advisor.
• Discussing the industry's future and the franchisor's plans for innovation with existing franchisees can provide helpful context.

Explanation

This risk does not appear to be present. The executive profiles in Item 2 indicate that the key personnel have extensive experience in the moving, storage, and/or franchising industries. For example, several directors are also multi-unit franchisees within the system. An experienced management team may be better equipped to provide effective support and strategic guidance, which is a positive factor for prospective franchisees.

Potential Mitigations

• It is still prudent to thoroughly vet the management team's background and specific franchising experience with your business advisor.
• Speaking with existing franchisees about their direct experiences with the management team's support and leadership is recommended.
• In your discussions with the franchisor, inquire about the management team's long-term vision for the brand.

Explanation

This risk was not identified. Item 1 indicates the franchisor is a wholly-owned subsidiary of Go Mini's, LLC, which is in turn owned by Go Mini's Dealers, LLC, a company formed by franchise dealers. This structure suggests ownership by operators within the system rather than by a private equity firm. Therefore, the specific risks associated with PE ownership, such as a focus on short-term returns over system health, do not appear to be present here.

Potential Mitigations

• It is still valuable to understand the ownership structure and any potential plans for a future sale of the company by asking the franchisor directly.
• Your attorney can help confirm the corporate structure and identify the ultimate beneficial owners.
• Discussing the impact of the current ownership structure on the system's direction with existing franchisees is a good practice.