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Ivybrook Academy

Ivybrook Franchising, LLC
https://www.ivybrookacademy.com
1-877-550-1234
9801 Suzanne Court, Weddington, NC 28173

How much does Ivybrook Academy cost?

Initial Investment Range

$540,700 to $869,860

Franchise Fee

$82,500

The franchise offered is a comprehensive preschool.

Enjoy our partial free risk analysis below

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Ivybrook Academy March 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
2
3
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor explicitly flags its financial condition as a special risk. The auditor's report on the 2024 financial statements includes a paragraph expressing substantial doubt about the company's ability to continue as a 'going concern.' The 2023 balance sheet also shows a low members' equity of only $48,007. These factors strongly indicate a potential inability for the franchisor to provide long-term support, invest in the brand, or meet its obligations, posing a significant risk to your investment.

Potential Mitigations

  • Your accountant must conduct an in-depth review of the franchisor's financial statements, including the 'going concern' note and cash flow statements, to assess its viability.
  • Discuss the implications of the franchisor's financial state and its reliance on continuing franchise sales for revenue with your franchise attorney.
  • Ask a business advisor to help you evaluate if the franchisor has sufficient capital and a sustainable business model to support its obligations.
Citations: Special Risks to Consider About This Franchise, Item 21, FDD Exhibit J

High Franchisee Turnover

High Risk

Explanation

The franchisor highlights 'Unopened Franchises' as a special risk. Item 20, Table 5 shows 42 franchise agreements have been signed for outlets not yet open, with only 16 projected to open in the next year. Furthermore, the former franchisee list in Exhibit L reveals multiple mutual terminations occurring before the franchisee ever opened their location. This pattern suggests potential systemic issues with the site selection, build-out, or pre-opening process that could cause significant delays and costs for you.

Potential Mitigations

  • It is critical to contact franchisees who are currently in the pre-opening stage and those who recently opened to discuss their timelines, costs, and challenges.
  • Your attorney should help you understand your rights and the franchisor's obligations if you face significant, unforeseen opening delays.
  • A business advisor can help you create a detailed pre-opening project plan with contingency time built in for potential delays.
Citations: Special Risks to Consider About This Franchise, Item 20, FDD Exhibit L

Rapid System Growth

Medium Risk

Explanation

Item 20 shows the system has grown from 18 to 41 total outlets in the past three years, more than doubling in size. While growth can be positive, such a rapid expansion rate can strain a franchisor's resources. This may affect the quality and availability of training, site selection assistance, and ongoing operational support for all franchisees, including new ones like yourself, especially given the franchisor's disclosed financial condition.

Potential Mitigations

  • Discussing the franchisor's infrastructure for supporting this growth with a business advisor is a prudent step.
  • Inquiries directed to both new and established franchisees about the current quality of support are essential for due diligence.
  • Your accountant can assess from Item 21 whether the franchisor's spending on support has kept pace with its revenue from franchise sales.
Citations: Item 20

New/Unproven Franchise System

Medium Risk

Explanation

The franchisor began selling franchises in 2015 and has under 50 operating units. While the affiliated prototype school has operated since 2007, the franchise system itself is relatively young. An emerging system may have less-developed support structures, limited brand recognition in new markets, and an operational model that is still being refined. These factors could present greater risks compared to a larger, more established franchise system.

Potential Mitigations

  • A thorough investigation into the business and franchising experience of the management team described in Item 2 is important; a business advisor can help.
  • Speaking with some of the earliest franchisees in the system can provide valuable insight into its evolution and stability.
  • Your accountant should carefully analyze the financial statements in Item 21 for signs of stability and sustainable growth.
Citations: Items 1, 2, 20, 21

Possible Fad Business

Low Risk

Explanation

The franchised business is a preschool and optional private kindergarten. The early childhood education industry is well-established and not typically considered a fad. Success in this sector generally depends on factors like educational quality, reputation, and local market demographics rather than on a fleeting trend. Therefore, this specific risk was not identified as a concern in the FDD package.

Potential Mitigations

  • Your business advisor can help you conduct market research to confirm sustained local demand for premium preschool services.
  • Engaging a financial advisor to assess the business model's resilience to economic shifts is a recommended course of action.
  • Reviewing the franchisor's curriculum and operational plans with an education consultant can help evaluate its long-term appeal.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. The key executives listed in Item 2 have been with the Ivybrook brand since its prototype school was founded in 2007 or have extensive prior experience within the system before moving into executive roles. In franchising, having a management team with deep, long-term experience in the specific business being franchised is a significant positive factor, as it suggests a stronger understanding of operations and franchisee needs.

Potential Mitigations

  • It is still wise to discuss the management team's background and reputation with current franchisees.
  • A business advisor can help you assess if the management team's skills align with the company's growth plans.
  • Your attorney can research the public records of key executives for any undisclosed issues of concern.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 indicates the franchisor and its affiliates are privately owned by the founding individuals and does not disclose any ownership by a private equity firm. This typically means that operational and strategic decisions may be more focused on the long-term health of the brand rather than short-term return horizons often associated with private equity ownership.

Potential Mitigations

  • Your attorney should still verify the company's ownership structure and confirm there are no undisclosed controlling parties.
  • It is beneficial to ask the franchisor about their long-term vision and any potential plans for future sale of the company.
  • A business advisor can help you understand the pros and cons of different franchise ownership structures.
Citations: Item 1

Non-Disclosure of Parent Company

Medium Risk

Explanation

Item 1 discloses several parent and affiliate companies, including Catapult Industries, LLC, which is the parent of the required software supplier. However, the FDD does not include financial statements for any parent or affiliate, nor does it provide a guarantee of performance from them. Given the franchisor's own noted 'going concern' issue in its financials, the financial stability of these un-disclosed entities, particularly those providing essential services, remains an unknown and potentially significant risk.

Potential Mitigations

  • Your franchise attorney should inquire why parent company financials are not provided, especially for the affiliate providing essential software.
  • An accountant can help assess the risks associated with a financially weak franchisor being reliant on affiliates whose financial health is unknown.
  • It is wise to investigate the reputation and stability of the affiliate, Catapult Industries, LLC, with your business advisor.
Citations: Items 1, 21, FDD Exhibit J

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 of the FDD states that the franchisor does not have any predecessors. Therefore, there is no history of prior entities operating the franchise system that would require disclosure of past litigation, bankruptcy, or franchisee turnover under a different corporate name. Your investment risk is tied directly to the current franchisor's disclosed history and performance.

Potential Mitigations

  • Your attorney can conduct independent searches to confirm that no undisclosed predecessor entities exist.
  • Discussions with the longest-tenured franchisees can help verify the historical information provided by the franchisor.
  • A business advisor can help you focus your due diligence on the current franchisor's track record as disclosed in Items 3, 4, and 20.
Citations: Items 1, 3, 4

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states that no litigation is required to be disclosed. This indicates that in the past several years, the franchisor has not been involved in any significant legal disputes with franchisees, suppliers, or government agencies that meet the criteria for mandatory disclosure. The absence of a pattern of litigation, particularly claims of fraud or breach of contract from other franchisees, is a positive indicator.

Potential Mitigations

  • Your attorney can still conduct independent searches for litigation that may not have met the technical disclosure requirements.
  • Asking current and former franchisees about any past or pending disputes is a crucial part of due diligence.
  • Maintaining open communication with the franchisor can help resolve issues before they escalate to legal action; a business advisor can assist.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
2
6
7

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

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3

Financial & Fee Risks

Total: 10
4
5
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.

4

Legal & Contract Risks

Total: 16
5
8
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.

5

Territory & Competition Risks

Total: 5
2
2
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
6
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.

7

Franchisor Support Risks

Total: 4
1
3
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.

8

Operational Control Risks

Total: 12
5
6
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.

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
1
1
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.