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How much does Imo's Pizza cost?
Initial Investment Range
$628,500 to $932,000
Franchise Fee
$45,000 to $65,000
You will operate an Imo’s Pizza Restaurant selling pizza and other authorized products through delivery, carry-out and dine-in services.
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Imo's Pizza April 30, 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 FDD does not contain the financial statements for the franchisor, Imo's Franchising, Inc. (IFI). Instead, it provides financials for a separate entity, Imo's Guaranty Corp., which was formed in 2023 and appears to have limited assets to support the entire system. This prevents a full assessment of IFI's financial stability, profitability, and ability to support you, which presents a significant risk to your investment.
Potential Mitigations
- Your accountant must review the provided Guaranty Corp. financials and note the absence of the franchisor's own statements.
- It is critical to ask your attorney about the legal implications of contracting with a company whose financial health cannot be verified.
- A business advisor can help you assess the heightened risk of joining a system where the franchisor's financial stability is unknown.
High Franchisee Turnover
Medium Risk
Explanation
Item 20 data indicates a shrinking system, with a net loss of 3 franchised outlets in 2024 and 1 in both 2023 and 2022. While terminations are low, there were 10 transfers in 2023 and 4 in 2024, which could indicate franchisee distress. This pattern of decline and transfers, coupled with the franchisor's use of confidentiality clauses that restrict franchisee speech, suggests potential underlying issues with profitability or franchisee satisfaction.
Potential Mitigations
- A business advisor can help you analyze the outlet turnover rates and compare them to industry averages for context.
- Discuss the reasons for the high number of transfers and system shrinkage with current and former franchisees.
- Your attorney should advise on the implications of the franchisor's use of confidentiality clauses, as this can hinder your due diligence.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD Package. Rapid system growth can strain a franchisor's ability to provide adequate support to all franchisees. It is important to assess if a franchisor's support infrastructure is keeping pace with its unit expansion to ensure new and existing franchisees receive the assistance they need to operate successfully.
Potential Mitigations
- In any franchise opportunity, a business advisor can help evaluate if the franchisor has a scalable plan for support services.
- It is wise to ask current franchisees about the quality and timeliness of support they receive from the corporate office.
- An accountant can analyze the franchisor's financials to see if they are reinvesting in support infrastructure to match growth.
New/Unproven Franchise System
Medium Risk
Explanation
While the Imo's brand has existed since 1964, the franchisor, Imo's Franchising, Inc. (IFI), only re-commenced active franchise sales in 2023 after a 20-year hiatus. This long pause and recent restart mean the current franchising program and support systems may be relatively new or unproven. Furthermore, the lack of IFI's own financial statements in Item 21 makes it difficult to assess the stability of this restarted franchise offering.
Potential Mitigations
- Engage a business advisor to scrutinize the franchisor's current support systems and recent performance since restarting franchising.
- A thorough discussion with franchisees who have joined since 2023 is crucial to understand the modern franchisee experience.
- Your attorney should consider the implications of the long pause in franchising on the brand's current market position and support structure.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD Package. A business concept tied to a short-term trend can face a significant drop in demand once public interest fades. For any franchise, it is important to evaluate whether the core product or service has long-term market sustainability and is not just a passing fad, as your contractual obligations will continue regardless of market trends.
Potential Mitigations
- A business advisor can help you research the long-term market trends and consumer demand for any product or service.
- It is prudent to assess a business's ability to adapt and innovate beyond its initial offerings.
- An accountant can help you model financial scenarios based on potential shifts in consumer preferences.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD Package. The management team appears to have extensive experience with the Imo's Pizza brand and within the restaurant industry. For instance, the President, Charles Guidici, Jr., has been an Imo's franchisee since 1996 and held executive roles since 2017. This level of direct brand and industry experience is generally a positive factor. However, a lack of experience in other systems could limit exposure to different strategies.
Potential Mitigations
- A business advisor can help you evaluate the management team's specific experience in supporting a franchise network.
- When speaking with franchisees, inquire about their direct experiences with the support and strategic direction provided by the management team.
- It is always a good practice for your attorney to review the employment history of key executives for any potential red flags.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor does not appear to be owned by a private equity firm. However, if a franchise system is acquired by such a firm, it can sometimes lead to a focus on short-term profits over the long-term health of the franchisees. This may manifest as reduced support, increased fees, or pressure to cut costs.
Potential Mitigations
- For any franchise, your attorney can help you understand the ownership structure and any assignment clauses that allow the franchisor to sell the system.
- A business advisor can help research the track record of any parent company, including private equity firms.
- It is useful to ask existing franchisees if they have experienced any changes in franchisor behavior following an ownership change.
Non-Disclosure of Parent Company
High Risk
Explanation
This risk is present and significant. Item 1 identifies Imo's Holding Company ("IHC") as the parent company. However, the FDD does not provide the financial statements for IHC or the franchisor itself, only for a separate Guaranty Corp. This omission of parent company financials, when the franchisor entity appears to be a subsidiary without its own disclosed financials, prevents you from fully assessing the financial strength backing the franchise system.
Potential Mitigations
- Your accountant must note the absence of parent company financials as a critical gap in due diligence.
- Consulting your attorney is crucial to understand the legal requirement for disclosing parent financials and the risk this omission presents.
- A business advisor can help you assess the potential instability of a system where the parent's financial status is not transparent.
Predecessor History Issues
Medium Risk
Explanation
Item 1 discloses that the business was founded in 1964 and predecessors began franchising in the 1980s. The current franchisor entity, Imo's Franchising, Inc. (IFI), was formed in 1985 but ceased active franchising from approximately 2003 to 2023. This long history with a significant pause in franchising could mean that legacy issues or brand reputation from a prior era may still exist, and the current franchising system is effectively new.
Potential Mitigations
- A business advisor can help you research the brand's historical reputation during its previous franchising period.
- It is important to ask long-term franchisees about their experiences under any predecessor entities or before the franchising pause.
- Your attorney can help interpret the legal structure and history disclosed in Item 1 to understand any inherited risks.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 3 states, "No actions are required to be disclosed in this Item." A clean litigation history is a positive indicator. However, it is always wise to conduct independent research, as the disclosure requirements are specific and may not capture all types of disputes. A pattern of litigation, especially franchisee-initiated lawsuits alleging fraud or breach of contract, can be a major red flag.
Potential Mitigations
- Your attorney can conduct public record searches to see if there is any litigation history beyond what is disclosed in Item 3.
- Speaking with former franchisees is a valuable way to learn about any past disputes that may not have resulted in disclosed litigation.
- A business advisor can help you interpret the significance of any legal disputes you discover.
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