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Homestretch

Homestretch Home Services II LLC
https://www.home-stretch.com
1-513-268-7088
5041 Oaklawn Drive, Cincinnati, Ohio 45227

How much does Homestretch cost?

Initial Investment Range

$109,700 to $467,750

Franchise Fee

$60,000 to $350,000

We offer qualified individuals and entities the right to operate a business offering residential and commercial (with our prior approval) home clear-outs, handyman services, interior and exterior painting, pressure washing, landscaping, junk removal, cleaning, and carpet/flooring replacements under our then-current proprietary mark, which is currently “HOMEstretch” (the “Franchised Business”).

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Homestretch February 28, 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
2
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor, Homestretch Home Services II LLC (Homestretch LLC), is in a precarious financial state. Its 2024 audited financials show a net loss of over $1.1 million and a members' deficit (negative net worth) exceeding $1 million. The FDD explicitly flags this as a risk, and state regulators in Maryland and Minnesota have required financial assurances (fee deferrals). This severely questions Homestretch LLC's ability to support you or even remain solvent.

Potential Mitigations

  • Your accountant must conduct a deep analysis of the franchisor's financial statements, including the massive net loss and negative equity.
  • Discuss the implications of the state-mandated financial assurances and the franchisor's overall financial health with your franchise attorney.
  • A business advisor can help you assess if the franchisor has sufficient capital to meet its support obligations without relying on new franchise sales.
Citations: Item 21, FDD Exhibit E

High Franchisee Turnover

Medium Risk

Explanation

Item 20 data for 2024, the first full year of franchising, shows that two franchised territories ceased operations. One franchisee who purchased rights for a territory never opened. While the system is new and growing rapidly, any franchisee exits or failures in the inaugural year are a warning sign of potential systemic issues with the business model, support, or franchisee selection, creating a risk for new investors.

Potential Mitigations

  • Engaging a business advisor to analyze the first-year churn rate in the context of the system's rapid growth is crucial.
  • Your attorney should advise you on the importance of contacting the former franchisees listed in Exhibit H to understand their reasons for leaving.
  • Discuss the circumstances surrounding these early exits directly with the franchisor's management.
Citations: Item 20, FDD Exhibit H

Rapid System Growth

High Risk

Explanation

The system expanded from zero to 67 franchised territories in its first year of operation. This explosive growth, combined with the franchisor's significant financial losses and negative net worth disclosed in Item 21, creates a high risk. Homestretch LLC's resources may be stretched too thin to provide the adequate training, site selection assistance, and ongoing support necessary for such a large number of new, inexperienced franchisees.

Potential Mitigations

  • Your business advisor should help you question the franchisor's scalability and their specific plans for supporting this rapid expansion.
  • It is important to speak with a wide range of the earliest franchisees to gauge the current quality and responsiveness of franchisor support.
  • An accountant's review of the franchisor's cash flow is necessary to determine if it can sustain support operations without heavy reliance on new franchise fees.
Citations: Items 20, 21

New/Unproven Franchise System

High Risk

Explanation

Homestretch LLC began franchising in late 2022 and has a very limited operating history as a franchisor. This is explicitly stated as a "Special Risk" in the FDD. An unproven system presents higher risks, as its business model, support systems, brand recognition, and long-term viability are not yet established. The franchisor's ability to effectively manage and support a franchise network is still being tested, which could impact your success.

Potential Mitigations

  • A franchise attorney should help you evaluate the added risks associated with investing in a new, unproven franchise system.
  • Careful due diligence on the management team's prior industry and franchising experience is essential and can be guided by your business advisor.
  • Speaking with the system's very first franchisees about their experience with the developing support structure is highly recommended.
Citations: Items 1, 2, 5, 20

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The business offers a range of established home services like painting, handyman work, and junk removal. These services cater to consistent consumer and real estate market needs rather than short-lived trends, suggesting a lower risk of the business model being a fad.

Potential Mitigations

  • A business advisor can help you independently research the long-term market demand and competitive landscape for home services in your specific area.
  • Discuss the franchisor's strategies for innovation and adaptation to stay competitive with your business advisor.
  • An accountant's assistance in analyzing the business model's resilience to economic cycles would be beneficial.
Citations: Not applicable

Inexperienced Management

Medium Risk

Explanation

The management team has direct operational experience running a similar business through its affiliate since 2019. However, Item 2 does not indicate that the key executives have prior experience managing a franchise system. This presents a risk, as the skills required to support a network of independent franchisees differ from those needed to run company-owned locations. Their ability to provide effective franchise support is largely untested.

Potential Mitigations

  • It would be prudent to ask the franchisor about any franchise-specific consultants or staff they have hired to guide their system's development.
  • Engaging a business advisor to help you assess the potential gaps between the management's operational experience and franchising experience is a valuable step.
  • In discussions with current franchisees, specifically inquire about the quality and effectiveness of the franchise-specific support and systems.
Citations: Items 1, 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. There is no disclosure in Item 1 indicating that the franchisor is owned or controlled by a private equity firm. Ownership appears to be with the founding members.

Potential Mitigations

  • It is still a good practice to ask your attorney to confirm the ownership structure of the franchisor and any parent companies.
  • A business advisor can help you research the background of the principals to understand their long-term vision for the company.
  • Understanding the franchisor's capital structure with your accountant can provide insight into their financial strategy and stability.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 discloses the relationship with the affiliate, HOMEstretch Services LLC, which owns the proprietary marks. There is no indication of another, undisclosed parent company whose financials would be material to your investment decision.

Potential Mitigations

  • Your attorney should review the licensing agreement between the franchisor and its affiliate to understand the stability of the franchisor's rights to the brand.
  • An accountant can help you analyze the financial interplay between the franchisor and its affiliate to assess any dependencies.
  • A business advisor can help clarify the operational roles and responsibilities of the franchisor versus its affiliate.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 does not disclose any predecessors from which Homestretch LLC acquired its assets or that previously operated the system. The franchisor is a new entity, and its history begins with its formation.

Potential Mitigations

  • An attorney can confirm the corporate history to ensure there are no undisclosed predecessor entities with a relevant history.
  • Even without a predecessor, a business advisor should help you research the full operational history of the affiliate company.
  • Asking early franchisees about the system's origins can provide valuable context.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 discloses that there is no material litigation required to be disclosed against the franchisor, its predecessors, or its management. The absence of such litigation, especially for a new system, is a positive indicator, though it does not guarantee future disputes will not arise.

Potential Mitigations

  • Your attorney can conduct an independent public records search to verify that no significant litigation has been omitted.
  • Engaging a business advisor to help you ask current franchisees about any disputes or disagreements they are aware of within the system is prudent.
  • Maintaining open communication and adhering strictly to the agreement can help prevent future disputes.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
3
4
8

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
2
5
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

Purchase the complete risk review to see all 102 risks across all 10 categories.

4

Legal & Contract Risks

Total: 16
8
2
6

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: 5
4
0
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
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
2
1
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
10
5
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

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.