Good Feet Logo

Good Feet

Good Feet Worldwide, LLC
https://www.goodfeet.com
1-760-804-0751
12636 High Bluff Drive, Suite 200, San Diego, California 92130

Initial Investment Range

$255,478 to $595,000

Franchise Fee

$116,978 to $125,000

The franchise is to operate a Store under the GOOD FEET® name and system that sells GOOD FEET® brand arch supports and related foot products.

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Good Feet June 18, 2024 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
0
4
6

Disclosure of Franchisor's Financial Instability

Medium Risk

Explanation

Audited financials for Good Feet Worldwide, LLC (GFW LLC) show profitability and positive equity. However, Note 4 discloses that GFW LLC and its parent/affiliates are co-borrowers under a large credit facility with a balance of approximately $93 million. A default by the parent or affiliates on this substantial debt could create financial distress that might impact the franchisor's ability to support the system. This related-party debt structure presents a noteworthy risk.

Potential Mitigations

  • A thorough review of the complete financial statements, including all footnotes regarding related-party transactions and debt, by your accountant is essential.
  • It is prudent to discuss the implications of the parent company's large debt obligations on the franchisor's stability with a financial advisor.
  • Your attorney should be consulted to understand any potential claims the lender may have against the franchisor's assets in a default scenario.
Citations: Item 21, FDD Exhibit D (Notes to Financial Statements, Note 4)

High Franchisee Turnover

Low Risk

Explanation

This risk was not identified. Item 20 data for 2023 shows a very low number of franchisee cessations (2) relative to the system size (175 at start of year) and significant net growth in the number of franchised outlets. Low turnover can be an indicator of a stable and potentially healthy franchise system where franchisees are choosing to remain.

Potential Mitigations

  • Engaging a business advisor to analyze the Item 20 tables for multi-year trends can provide deeper insight into system stability.
  • Despite positive data, speaking with former franchisees listed in the FDD is a valuable due diligence step recommended by attorneys.
  • Your accountant can help you compare the disclosed turnover rates with available industry benchmarks for context.
Citations: Not applicable

Rapid System Growth

Medium Risk

Explanation

Item 20 data reveals significant and sustained growth, with the total number of outlets increasing from 167 to 237 over the last two full years. Such rapid expansion can sometimes strain a franchisor's resources and its ability to provide adequate training, site selection assistance, and ongoing operational support to all franchisees in the system. You should inquire how support systems are being scaled.

Potential Mitigations

  • Asking the franchisor directly about their specific plans to scale support infrastructure to match unit growth is a crucial step.
  • Engaging with a range of existing franchisees, both new and established, can provide perspective on the current quality of franchisor support.
  • A business advisor can help you assess whether the franchisor's disclosed support staff and systems seem adequate for the current rate of expansion.
Citations: Item 20

New/Unproven Franchise System

Low Risk

Explanation

This risk was not identified. The FDD indicates that the franchisor began its franchising operations in 2005, giving it a long history in the business. An established system often has more developed operational procedures, brand recognition, and a better understanding of the challenges that franchisees may encounter.

Potential Mitigations

  • When evaluating any franchise, it is wise to have your attorney review the business history disclosed in Item 1 for any red flags.
  • A business advisor can help research the franchisor’s reputation and track record over its many years of operation.
  • Discussing the evolution of the system with long-term franchisees can provide valuable historical context.
Citations: Not applicable

Possible Fad Business

Low Risk

Explanation

This risk does not appear to be present. The business model focuses on arch supports and foot comfort products, which serve a persistent consumer need within the broader health and wellness industry rather than a fleeting trend. A business based on a stable consumer need may have better long-term market viability than one based on a temporary fad.

Potential Mitigations

  • Independent market research, conducted with the help of a business advisor, can help validate the long-term consumer demand for the franchise's products.
  • Analyzing the franchisor's plans for product innovation and adaptation in Item 11 can provide insight into their long-term vision.
  • Your accountant can help model the business's potential resilience to economic downturns.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified. The executive team described in Item 2 appears to possess substantial prior experience in franchising, retail management, and leadership roles at other large, well-known companies. An experienced management team can be a significant asset in providing effective guidance and strategic direction for a franchise system.

Potential Mitigations

  • Even with an experienced team, it is valuable to have a business advisor help you research the specific track records of key executives.
  • Discussions with existing franchisees can offer firsthand accounts of the management team's effectiveness and support.
  • Your attorney can help you understand the roles and responsibilities of the key personnel as described in Item 2.
Citations: Not applicable

Private Equity Ownership

Medium Risk

Explanation

The franchisor was acquired in 2020 by its current parent, Good Feet Holdings, LLC, and the overall enterprise carries significant debt from a large credit facility, which is often characteristic of private equity ownership. Such an ownership structure could lead to decisions focused on short-term investor returns over the long-term health of franchisees, potentially affecting fees, support levels, or a future sale of the system.

Potential Mitigations

  • It is wise to research the parent company's reputation and track record with other franchise systems it may own or have owned.
  • Engaging a business advisor to discuss the potential impacts of a private equity ownership model on your franchise is beneficial.
  • Your attorney should review the assignment clauses in the Franchise Agreement to understand your rights if the system is sold.
Citations: Item 1, Item 21 (FDD Exhibit D, Notes 4 & 5)

Non-Disclosure of Parent Company

Medium Risk

Explanation

The FDD discloses the parent company but does not include its financial statements. Because the franchisor and its parent share a significant joint debt obligation, as disclosed in the financial notes, the absence of the parent's financials limits your ability to fully assess the financial health of the entire enterprise. This creates a risk, as the parent's financial condition could impact the franchisor.

Potential Mitigations

  • Your accountant must review the franchisor's financials and the related-party debt footnotes to assess potential risk from the parent company.
  • It is advisable to ask the franchisor why parent company financials are not included, given the shared debt structure.
  • A discussion with your attorney can help clarify the legal relationship and obligations between the parent and the franchisor.
Citations: Item 1, Item 21 (FDD Exhibit D, Note 4)

Predecessor History Issues

Low Risk

Explanation

This risk was not identified. Item 1 of the FDD describes the franchisor's history and its relationship with affiliated entities, and it does not appear to conceal any predecessor information. A clear and transparent corporate history allows for a more straightforward assessment of the business's background.

Potential Mitigations

  • A thorough review of Item 1 with your attorney is always recommended to ensure you understand the franchisor's complete history.
  • Independent research into the company's past, with the help of a business advisor, can sometimes uncover details not in the FDD.
  • Questioning long-term franchisees about the company's history can provide valuable context.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

This risk was not identified. While Item 3 discloses past litigation, including a settled class action lawsuit initiated by a customer and a case involving an executive's prior employment, it does not reveal a significant pattern of franchisee-initiated lawsuits against the franchisor alleging fraud or systemic problems. A lack of extensive franchisee litigation can be a positive indicator of system health.

Potential Mitigations

  • Having your attorney carefully review the details of any disclosed litigation in Item 3 is a crucial due diligence step.
  • Independent legal research, with assistance from your attorney, can sometimes provide additional context on disclosed cases.
  • You should discuss any concerns about litigation with current and former franchisees.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
3
2
10

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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3

Financial & Fee Risks

Total: 10
4
3
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

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4

Legal & Contract Risks

Total: 16
8
3
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

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5

Territory & Competition Risks

Total: 5
1
3
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
6
2
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

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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
4
6
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.

9

Term & Exit Risks

Total: 18
7
6
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.

10

Miscellaneous Risks

Total: 2
2
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.