Explanation

This risk was not identified in the FDD. Item 20 tables show no franchisee terminations, non-renewals, or cessations for other reasons over the past three years. This is positive, but it is important to note the very small system size. High turnover can be a major red flag indicating systemic problems, franchisee dissatisfaction, or lack of profitability, so this area should be monitored as the system grows.

Potential Mitigations

• Speaking with the current franchisees listed in Item 20 is a crucial step your business advisor can help with.
• It's wise to have an attorney review the termination and renewal clauses in the Franchise Agreement to understand future risks.
• Your accountant can help you model different financial scenarios to assess profitability and your ability to succeed.

Explanation

This risk was not identified. The data in Item 20 indicates slow, not rapid, franchise system growth. While this avoids the risks of a franchisor's support systems being overstretched, it may also suggest a lack of market demand or challenges in selling new franchises. Rapid growth can strain a franchisor's ability to provide adequate support, so slow growth can be a positive sign for new franchisees entering the system.

Potential Mitigations

• Discussing the franchisor's growth strategy and support infrastructure with them directly can provide valuable insight.
• Your business advisor can help you interpret the growth data in the context of the industry and brand maturity.
• Engaging with current franchisees to learn about their perception of the system's growth and support is highly recommended.

Explanation

This risk does not appear to be present. The business model, which offers home modifications for the disabled and individuals with limited mobility, is based on long-term demographic trends of an aging population. This suggests a sustainable market need rather than a short-term fad. A fad business carries the risk of collapsing demand, leaving you with a worthless investment and ongoing liabilities.

Potential Mitigations

• Engaging a business advisor to research long-term demographic and industry trends can help validate the market's sustainability.
• Discussing the franchisor's plans for service innovation and adaptation with them can provide insight into their long-term vision.
• Your financial advisor can help assess the business model's resilience to economic downturns or shifts in healthcare policy.

Explanation

This risk does not appear to be significant. Item 2 indicates GLM LLC's principals have operated a similar business through an affiliate since 2007, giving them substantial industry experience. However, their experience managing a franchise system specifically is more limited, as the system is small. Inexperienced management can sometimes lead to underdeveloped support systems, so this is an area for due diligence.

Potential Mitigations

• Speaking with current franchisees about the quality and effectiveness of management's support and guidance is recommended.
• A business advisor can help you probe the franchisor's depth of knowledge regarding the specific challenges of franchising.
• Inquiring about any franchise-specific consultants or advisors the management team may use could be insightful.

Explanation

This risk was not identified in the FDD. Item 1 indicates GLM LLC is a limited liability company, and Item 2 lists individuals as management. There is no disclosure of ownership by a private equity firm. PE ownership can sometimes introduce a focus on short-term returns over the long-term health of the brand and its franchisees, so its absence can be a positive factor for stability.

Potential Mitigations

• It is still valuable for your attorney to confirm the ownership structure and any plans for future sale of the company.
• A business advisor can help you understand the potential impacts if the franchise were to be sold in the future.
• Asking current franchisees about the franchisor's long-term vision can provide clues about their commitment to the system.

Explanation

This risk was not identified. Item 1 of the FDD explicitly states that the franchisor has no parent company. The franchisor entity, GLM LLC, appears to be the primary operating and contracting entity. In cases where a franchisor is a subsidiary, the financial health of a parent company can be material, and its absence simplifies the due diligence process.

Potential Mitigations

• Your attorney can verify the corporate structure and confirm the absence of any undisclosed controlling entities.
• An accountant should still carefully review the provided financial statements for the franchisor entity itself.
• Discussions with a business advisor can help you evaluate the risks and benefits of dealing with a smaller, standalone franchisor.

Explanation

This risk was not identified. The FDD states in Item 1 that the franchisor has no legal predecessor. The franchisor’s experience comes from an affiliate, which is disclosed, but not from acquiring a prior franchise system. A predecessor with a history of litigation or high franchisee failure could pass on systemic problems, so the absence of one can be a positive indicator, simplifying your historical due diligence.

Potential Mitigations

• Your attorney should confirm the distinction between an affiliate and a legal predecessor and its implications.
• A business advisor can help you research the history of the affiliate company, "Back Home Safely LLC," for additional context.
• Speaking with the franchisor about the history of their affiliate can provide valuable operational insights.

Explanation

This risk was not identified. Item 3 of the FDD reports no disclosable litigation against the franchisor or its management. A pattern of lawsuits, particularly those initiated by franchisees alleging fraud, can be a significant red flag indicating deep systemic issues. The absence of such litigation is a positive sign, though it should be viewed in the context of the system's small size and short history.

Potential Mitigations

• It is still a prudent step for your attorney to conduct an independent public records search for any litigation not disclosed.
• Discussing any past disputes, even if not legally disclosable, with current and former franchisees is a key part of due diligence.
• A business advisor can help you understand what level of litigation is typical for a franchise system of this size and age.