Not sure if iCode Franchise, Inc. is right for you?
Take our 1-minute franchise matching quiz to get in touch with a Franchise Advisor that can match you with your perfect franchise based on your goals, experience, and investment range.
Take the Quiz & Get Matched
iCode
How much does iCode cost?
Initial Investment Range
$77,000 to $490,500
Franchise Fee
$36,500 to $195,500
An "iCode" franchisee will provide STEAM-based educational courses and other programs for children and adults.
Enjoy our partial free risk analysis below
Unlock the full risk analysis to access 9 more categories covering 100+ risks.
iCode April 18, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor, iCode Franchise, Inc. (iCode), has a precarious financial position. The audited financial statements include an 'Emphasis-of-Matter' paragraph highlighting recurring losses and a net capital deficiency of over $1.75 million as of year-end 2024. This raises substantial doubt about its ability to fund operations and support you. Several states require iCode to defer collecting your initial fees due to its weak financial condition, which is a significant red flag about its stability.
Potential Mitigations
- A franchise accountant should meticulously review the franchisor's financial statements, including the auditor's 'Emphasis-of-Matter' note and all footnotes.
- It is critical to ask the franchisor about its plans to address the net capital deficiency and achieve profitability, with help from your financial advisor.
- Your attorney should confirm the status and protections offered by any state-mandated fee deferrals or financial assurances.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals significant franchisee churn. In the last three years, eight units have left the system through termination, reacquisition, or ceasing operations. Furthermore, Exhibit E lists four additional franchisees who signed agreements but never opened. The Item 19 financial performance representation also explicitly omits four locations that ceased operations from its data set. This high rate of turnover and failure to launch suggests potential systemic problems with profitability, support, or the business model itself.
Potential Mitigations
- A thorough analysis of the turnover data in Item 20 with your accountant is essential to calculate the true churn rate.
- Contacting a significant number of former franchisees from the list in Exhibit E is crucial to understand why they left the system.
- Your attorney can help you formulate questions to the franchisor regarding the high number of ceased and never-opened locations.
Rapid System Growth
Medium Risk
Explanation
The system has nearly tripled in size, from 16 to 47 franchised units, in the past three years. This rapid pace of expansion, when viewed alongside the franchisor's weak financial condition as noted in Item 21, presents a risk. The franchisor's resources may be stretched thin, potentially compromising its ability to provide adequate site selection assistance, training, and ongoing operational support to all franchisees, including new ones like you.
Potential Mitigations
- Inquiring with your business advisor about the franchisor's infrastructure for supporting its expanding network is a prudent step.
- It is important to ask a wide range of existing franchisees about their perception of the quality and timeliness of franchisor support.
- Your accountant should evaluate whether the franchisor's financial investment in support systems is keeping pace with its growth.
New/Unproven Franchise System
Medium Risk
Explanation
While iCode began franchising in 2016, its significant financial instability and high franchisee turnover suggest the business model may not be fully proven or sustainable yet. Investing in a system that exhibits these signs of struggle, even after several years of operation, carries a higher level of risk regarding long-term viability and the potential for you to receive adequate, consistent support throughout your franchise term.
Potential Mitigations
- A deep dive into the business model's profitability with your accountant, using data from franchisee interviews, is essential.
- Speaking with the earliest-operating franchisees can provide insight into the system's evolution and the franchisor's ability to overcome challenges.
- Your attorney should help you assess whether the potential rewards of the franchise justify the risks associated with its unproven stability.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. The business of providing STEAM (Science, Technology, Engineering, Arts, and Mathematics) education is part of a well-established and growing sector, not a short-term or fleeting trend. However, you should always consider the long-term sustainability of any business model and its ability to adapt to changing market demands and competitive pressures.
Potential Mitigations
- Independent research into the long-term trends of the supplemental education industry should be conducted with your business advisor.
- An evaluation of the franchisor's plans for curriculum development and innovation is a key discussion point with management.
- Assess the business's resilience to economic shifts and changes in consumer spending habits with your financial advisor.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD package. The executives detailed in Item 2 appear to have relevant experience in business management, and the founder has been leading the company since its inception in 2015. In any franchise, it is important that the management team has a blend of both industry-specific knowledge and direct franchising experience to effectively support its franchisees.
Potential Mitigations
- Verifying the backgrounds of key executives through independent research, with assistance from a business advisor, is a good practice.
- Asking existing franchisees about their direct experiences with the management team's competence and responsiveness is recommended.
- Inquire about the depth and experience of the support team, not just the top executives.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package, as Item 1 does not indicate that the franchisor is owned by a private equity firm. When a franchise is owned by a PE firm, there can be a risk that management decisions prioritize short-term investor returns over the long-term health of the franchisees and the brand, which can affect support levels and fee structures.
Potential Mitigations
- A business advisor can help research a private equity firm's history with other franchise brands if this situation applies.
- It is wise for your attorney to scrutinize the franchisor's right to sell or assign the franchise agreement.
- Discussing any changes in system culture or support since a PE acquisition with existing franchisees is a crucial step.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 clearly discloses the parent company, iCode, LP. However, it's worth noting that while the franchisor's financials show significant weakness, the parent company's financials are not provided. The auditors mention management's belief that its stockholder will continue to provide funding, making the parent's financial health a very relevant but unknown factor. This concern is best addressed within the 'Disclosure of Franchisor's Financial Instability' risk.
Potential Mitigations
- Your attorney should always verify the corporate structure and identify all parent and affiliate companies.
- If a parent company guarantees the franchisor's performance, it is essential that your accountant reviews the parent's financial statements.
- Understanding the legal and financial relationship between a franchisor and its parent company is a key task for your attorney.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package, as Item 1 clearly states that iCode has no predecessor. When a franchisor has acquired a business from a predecessor, it is important to investigate the predecessor's history, including any past litigation, bankruptcies, or high franchisee turnover, as these issues could be inherited by the new franchisor.
Potential Mitigations
- Your attorney should always carefully review Item 1 for any disclosure of predecessor entities.
- If a predecessor exists, researching their business record and history of franchisee relations can be a valuable task for your business advisor.
- Asking long-term franchisees about their experience under any previous ownership is important.
Pattern of Litigation
Medium Risk
Explanation
Item 3 discloses one lawsuit brought by a franchisee, *Code Utah, LLC v. iCode Franchise, Inc.*, alleging fraudulent inducement and misrepresentation regarding the leasehold improvement costs in Item 7. While not a broad pattern, the nature of the claim is serious, and the franchisor and its insurer paid a total of $99,000 to settle it. This indicates a potential issue with the accuracy of the franchisor's investment estimates and a history of significant franchisee disputes.
Potential Mitigations
- Your attorney must review the details of the litigation disclosed in Item 3 to understand the core allegations and the outcome.
- This specific lawsuit should prompt a highly detailed review of the Item 7 investment estimates with your accountant and local contractors.
- It is wise to ask the franchisor for its perspective on the litigation and what, if any, changes were made as a result.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Related Education Franchises
Apex Leadership Co.
$86,000 to $134,700
Autism Center of Excellence
$220,250 to $582,000
Canine Dimensions
$73,450 to $79,750
Honest Art
$133,300 to $275,325
Ivy Kids Early Learning Center
$895,500 to $9,555,400
KidzArt
$22,750 to $68,250
M14 Hoops
$104,880 to $430,000
Make Your Dog Epic Dog Training Academy
$49,500 to $63,500
Sandler
$77,500 to $102,250
Tutu School
$87,000 to $226,000
iCode
$77,000 to $490,500
iCode Franchise, Inc.
$77,000 to $490,500