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How much does Ins Ice Beer Restaurant cost?
Initial Investment Range
$640,000 to $1,125,000
Franchise Fee
$104,000 to $110,600
We offer franchises for the operation of a themed restaurant and bar offering frosty beer menu items served in thin ice glasses, Korean street food and snack menu items, and a variety of other related food products, side dishes, and other alcoholic and non-alcoholic beverages for both on-premises and off-premises consumption.
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Ins Ice Beer Restaurant March 5, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 22, 2025
DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor explicitly discloses that its financial condition “calls into question the franchisor's financial ability to provide services and support to you.” Financial statements in Exhibit G show very limited equity ($103,458) and net income ($3,458) for 2024. The required investment is many times greater than the franchisor’s equity, and multiple state regulators have imposed fee deferral requirements due to this weakness. This indicates a significant risk to the franchisor's ability to support its franchisees.
Potential Mitigations
- Your accountant must conduct a thorough review of the franchisor's financial statements, including all notes, to assess its viability and ability to fund its obligations.
- A franchise attorney should explain the implications of state-mandated fee deferrals and what limited protections they may offer.
- Developing a contingency plan with your business advisor for scenarios where franchisor support is unavailable is a critical step.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified in the FDD package. As a new franchise system in the United States, Wevelopment USA, Inc. (Wevelopment) has no history of franchisee turnover to analyze in Item 20. While this means no negative trend is apparent, it also means there is no track record of franchisee success or satisfaction to evaluate within the U.S. market. High turnover in established systems can signal underlying problems with profitability or support.
Potential Mitigations
- You should discuss the parent company's franchisee turnover history in Korea with the franchisor to gauge system health, with help from your business advisor.
- An accountant can help you model different financial scenarios to understand the profitability required to make the investment successful.
- Your attorney can advise on negotiating stronger contractual protections given the lack of a U.S. performance history.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD package. Item 20 data shows the system is just beginning in the U.S., with one affiliate-owned store and one franchisee signed but not yet open. There is no evidence of rapid growth that might strain support systems. The primary risk here is the opposite: that the system is new and unproven, rather than expanding too quickly.
Potential Mitigations
- It is wise to ask the franchisor about their future growth plans and how they intend to scale support infrastructure with a business advisor.
- Your attorney should review the franchisor's obligations for support to ensure they are clearly defined.
- An accountant can review the franchisor's capitalization to assess its ability to support even modest growth.
New/Unproven Franchise System
High Risk
Explanation
The franchisor is a new U.S. entity, formed in January 2024, and began franchising in April 2024. It explicitly discloses a “Short Operating History” as a special risk. Item 20 and Exhibit E confirm there is only one affiliate-owned outlet and one franchisee who has not yet opened. Investing in a new, unproven system carries higher risk, as its brand recognition, operational support, and business model are not yet validated in the U.S. market.
Potential Mitigations
- A business advisor can help you conduct extensive due diligence on the viability of the business model in your specific U.S. market.
- Speaking with the single signed franchisee (from Exhibit E) about their experience with the pre-opening process is crucial.
- Your attorney might be able to negotiate more favorable terms to compensate for the higher risk associated with an unproven system.
Possible Fad Business
Medium Risk
Explanation
The business concept is centered on “frosty beer menu items served in thin ice glasses” and Korean street food. While themed restaurants can be successful, a concept that relies heavily on a novelty like specialized glassware could be susceptible to being a short-term fad. A prospective franchisee should consider the long-term consumer demand for the core offering, as your contractual obligations will continue even if the trend fades.
Potential Mitigations
- Engage a business advisor to research the long-term sustainability of the core business concept beyond its novelty aspects in your local market.
- Question the franchisor on their plans for menu innovation and concept evolution to stay relevant over time.
- Your accountant can help you model a worst-case scenario where the novelty wears off to assess the financial risk.
Inexperienced Management
High Risk
Explanation
While the CEO has experience with the parent company in Korea, the U.S. entity is new. A pending administrative case in Virginia, where the parent allegedly sold a franchise without proper state registration, suggests a lack of experience with the complex U.S. franchise regulatory environment. This could expose you and the system to legal and operational risks as management navigates U.S. laws and market practices.
Potential Mitigations
- Your attorney must carefully evaluate the Virginia litigation and its implications for the franchisor's compliance practices.
- Discuss with the franchisor what steps they have taken to ensure future compliance with all U.S. federal and state franchise laws.
- A business advisor can help you assess whether the management team has sufficient U.S.-specific market experience.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 indicates that Wevelopment is wholly owned by its South Korean parent company, Wevelopment Co., Ltd., not by a private equity firm. Therefore, risks specifically associated with the typical private equity model, such as a focus on short-term returns or a quick resale of the system, do not appear to be present based on the ownership structure disclosed.
Potential Mitigations
- It is still prudent to have your attorney verify the franchisor's corporate structure and ownership.
- A business advisor can help you research the parent company's history and business philosophy.
- Your accountant can analyze the financial statements to understand the source and stability of the franchisor's funding.
Non-Disclosure of Parent Company
High Risk
Explanation
The FDD discloses that the U.S. franchisor is a new, thinly capitalized entity wholly owned by a South Korean parent company. This parent is a critical supplier of proprietary products and licensor of key intellectual property. However, the FDD does not include the parent company's financial statements. This omission prevents you from assessing the financial stability of the entity that the U.S. franchise system appears to depend on for its products and brand rights.
Potential Mitigations
- Your attorney should request the parent company's financial statements to allow for a complete risk assessment by your accountant.
- Investigating whether the parent company provides a performance guarantee for the U.S. franchisor's obligations is a task for your attorney.
- A business advisor can help research the parent company's reputation and operational history in its home market.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 does not disclose any predecessors for Wevelopment, as it is a newly formed U.S. corporation. While it has a parent company in South Korea, that entity is not defined as a predecessor under U.S. franchise law. Therefore, risks associated with a hidden negative history from a prior version of the franchisor do not appear to be present.
Potential Mitigations
- You should still ask the franchisor about the full history of the brand in other countries, which a business advisor can help you evaluate.
- Your attorney can confirm the corporate history of the U.S. entity to ensure no predecessors have been omitted.
- Speaking with the franchisor about lessons learned from their international operations can provide valuable insight.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package. Item 3 discloses a single, pending administrative action against the franchisor's parent in Virginia for failure to register, but it does not show a pattern of litigation initiated by or against multiple franchisees alleging fraud or other systemic issues. The absence of such a pattern is expected in a new system but provides no track record on how disputes are typically handled.
Potential Mitigations
- Your attorney should still carefully analyze the disclosed Virginia case for insight into management's approach to legal compliance.
- It is important to understand the dispute resolution clauses in the Franchise Agreement with your attorney, as this will be your path for future issues.
- A business advisor can help you assess the overall risk profile of the franchise, considering all factors.
Disclosure & Representation Risks
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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Financial & Fee Risks
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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Legal & Contract Risks
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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Territory & Competition Risks
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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Regulatory & Compliance Risks
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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Franchisor Support Risks
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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Operational Control Risks
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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Term & Exit Risks
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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Miscellaneous Risks
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