Great Harvest Logo

Great Harvest

Great Harvest Franchising, LLC
https://www.greatharvest.com
1-406-683-6842
28 South Montana Street, Dillon, Montana 59725

Initial Investment Range

$298,145 to $989,639

Franchise Fee

$35,000 to $45,000

You will operate a high-quality bakery cafe that features fresh-baked whole wheat bread, baked goods, soups, salads, sandwiches, and related menu items under the trademark “Great Harvest”.

Enjoy our complimentary free risk analysis below

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

Great Harvest February 25, 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
1
6

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

Audited financials in Exhibit D show Great Harvest Franchising, LLC (Great Harvest) has a significant member's deficit of over $4 million and a net loss of nearly $5 million for fiscal year 2024. The FDD explicitly warns that this financial condition "calls into question the franchisor's financial ability to provide services and support to you." This financial weakness, also prompting financial assurances in several states, may severely impact their ability to support your business or even remain operational.

Potential Mitigations

  • An experienced franchise accountant must thoroughly review the franchisor's financial statements, including all footnotes and year-over-year trends.
  • It is critical to understand the protections offered by any state-mandated financial assurances, such as fee deferrals, with guidance from your attorney.
  • Discuss the franchisor's plan for achieving profitability and financial stability with your business advisor before investing.
Citations: Item 21, FDD page 4, Exhibit D

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a shrinking system, with a net loss of franchised outlets over the past three years. Of particular concern are the high numbers of stores that "ceased operations," with 15 in 2023 and 10 in 2022. This represents a significant percentage of the total system size each year. Such a trend could indicate systemic issues, franchisee dissatisfaction, or challenges with profitability that may affect your potential for success.

Potential Mitigations

  • A thorough analysis of the Item 20 tables with your accountant is necessary to understand the real rate of franchisee churn.
  • Contacting a significant number of former franchisees from the provided list is crucial to learn why they left the system.
  • Your business advisor can help you assess whether these turnover rates are a sign of systemic problems.
Citations: Item 20 Tables 1a, 3a

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD package. Rapid, uncontrolled growth can strain a franchisor's ability to provide adequate support. Monitoring franchise unit growth in Item 20 against the franchisor's financial and personnel resources is important to ensure they can maintain quality and support as the system expands.

Potential Mitigations

  • Your business advisor can help evaluate if the franchisor's support infrastructure is capable of handling its growth trajectory.
  • Discussing the quality and timeliness of support with both new and established franchisees can provide valuable insight.
  • An accountant should review the franchisor's financials to see if they are reinvesting in support systems to match growth.
Citations: Item 20

New/Unproven Franchise System

Low Risk

Explanation

This risk was not identified in the FDD package. The franchisor, Great Harvest, has been in operation since 1980, indicating a long history and an established business model. A new or unproven system can present higher risks due to untested operations, minimal brand recognition, and a lack of historical performance data for franchisees to evaluate.

Potential Mitigations

  • Even with a mature system, consulting a business advisor to review the company's recent history and changes is wise.
  • Your attorney should investigate the business experience of any new management figures who have recently joined the company.
  • An accountant can help assess the financial stability of even a long-standing franchisor.
Citations: Item 1, Item 2

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The core business of a bakery cafe selling bread, sandwiches, and baked goods has been a staple of food service for a long time and is not based on a recent or fleeting trend. A business tied to a fad faces the risk of declining consumer interest, which could jeopardize its long-term viability after the initial trend fades.

Potential Mitigations

  • A business advisor can help you research the long-term market demand and competitive landscape for bakery cafes in your area.
  • It is still prudent to review the franchisor's plans for innovation and adaptation with your financial advisor.
  • Your attorney can review the franchise agreement to understand your obligations if market conditions change.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. Item 2 indicates that the key personnel at Great Harvest have extensive experience within the company and the food service industry, some for many years. Inexperienced management can be a significant risk, as it may lead to poor strategic decisions, inadequate franchisee support, and a lack of tested operational systems.

Potential Mitigations

  • Even with an experienced team, it's beneficial to have your business advisor research the recent performance of the management team.
  • Discuss the support provided by the leadership team with current franchisees.
  • Your attorney should still review the obligations of the management team as outlined in the franchise agreement.
Citations: Item 2

Private Equity Ownership

High Risk

Explanation

Great Harvest is owned by a private equity firm, as disclosed in Item 1. This can introduce risks where decisions are driven by short-term investor return objectives rather than the long-term health of franchisees. This might manifest as increased fees, reduced support to cut costs, or pressure to use affiliated vendors. The private equity owner's goal is often to sell the company within a defined period, creating uncertainty about future ownership and system direction.

Potential Mitigations

  • It is important to research the private equity firm's reputation and track record with other franchise brands they have owned.
  • Speaking with franchisees who have been in the system before and after the private equity acquisition can provide critical insights.
  • Your attorney should review any terms in the agreement that give the franchisor broad rights to sell the system without your consent.
Citations: Item 1

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 appears to properly disclose the parent companies of the franchisor. Failing to disclose a parent company can obscure the true financial backing and control structure of a franchise system, hiding potential risks related to the parent's financial health or business practices.

Potential Mitigations

  • A franchise attorney should always verify the corporate structure disclosed in Item 1 to ensure all parent and affiliate entities are listed.
  • If a parent company provides a guarantee, your accountant should insist on reviewing its financial statements.
  • Your business advisor can research the relationship between the franchisor and its parent for any potential conflicts.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 properly identifies the franchisor's history, including its conversion from a Montana corporation to a Delaware LLC. Concealing or providing incomplete information about a predecessor's history, such as past bankruptcies or high franchisee failure rates, can prevent you from seeing the true historical risks associated with the system.

Potential Mitigations

  • An attorney should always carefully review the predecessor history disclosed in Items 1, 3, and 4.
  • It is a good practice for a business advisor to independently research the history and reputation of any predecessor entities.
  • Inquiring with long-term franchisees about their experience under any previous ownership can reveal important information.
Citations: Not applicable

Pattern of Litigation

Medium Risk

Explanation

Item 3 discloses two litigation cases initiated by the franchisor against former franchisees for issues like trademark infringement and breach of contract. One case involved the franchisor paying the former franchisee $17,000 to settle. While not a large number of cases, this history indicates the franchisor's willingness to litigate against its franchisees to enforce its agreements. Understanding this history is important for assessing the franchisor's approach to disputes.

Potential Mitigations

  • A review of the specifics of any disclosed litigation with your franchise attorney is essential to understand the context and outcomes.
  • Discussing the franchisor's relationship with its franchisees with current and former operators can provide context for litigation history.
  • Your business advisor can help you assess if the litigation pattern suggests a supportive or an overly aggressive culture.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 14
4
3
7

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
4
4
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: 7
2
1
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.

5

Territory & Competition Risks

Total: 3
2
1
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.

6

Regulatory & Compliance Risks

Total: 10
4
2
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.

7

Franchisor Support Risks

Total: 4
1
3
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.

8

Operational Control Risks

Total: 12
4
7
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.

9

Term & Exit Risks

Total: 18
11
5
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.

10

Miscellaneous Risks

Total: 2
0
2
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.