Explanation

This risk was not identified. The FDD Item 20 tables show that franchising began in 2024, and as of the end of the year, there were no franchisee terminations, non-renewals, or cessations of operation. High turnover can be a major red flag indicating systemic problems, so it is a positive sign that none is present, albeit in a very new system.

Potential Mitigations

• During your due diligence, speaking with the initial franchisees listed in Item 20 can provide valuable insight into their early experiences.
• A business advisor can help you analyze the franchise system's growth and support structures as it matures.
• Your attorney can help you understand your rights and the franchisor's obligations if system health declines in the future.

Explanation

This risk was not identified in the FDD. Item 20 data shows that the system is in its initial phase of growth, adding only four franchised outlets in its first year. Rapid expansion can strain a franchisor's ability to provide support, so the current controlled pace is a potentially positive factor. Monitoring future growth rates remains important.

Potential Mitigations

• Discuss the franchisor's future growth plans and how they intend to scale support services with a business advisor.
• When speaking with current franchisees, ask about the quality and timeliness of the support they currently receive.
• Having your accountant review the franchisor's investment in support infrastructure relative to growth can be insightful.

Explanation

This risk was not identified. The franchise operates in the home repair and construction industry, specifically focusing on roofing, siding, and windows. This is a well-established and essential service sector, not a business model based on a fleeting trend or fad. The demand for these services is generally consistent, though it can be influenced by economic conditions and weather events.

Potential Mitigations

• A business advisor can help you research the stability and long-term outlook of the home construction and repair market in your local area.
• Assess the competitive landscape with your business advisor, as even stable industries can be crowded.
• An accountant can help you model financial scenarios that account for market seasonality and economic cycles.

Explanation

This risk was not identified. According to FDD Item 1, JBL is a subsidiary of JBL Holdings, LLC, and its management appears to be the same individuals who operate the affiliate construction company. There is no disclosure indicating that the franchisor or its parent company is owned or controlled by a private equity firm.

Potential Mitigations

• Your attorney can help you verify the ownership structure detailed in Item 1 and confirm the absence of private equity involvement.
• A discussion with your attorney regarding the franchisor's right to sell the system in the future is always a prudent measure.
• Inquiring with existing franchisees about the long-term vision of the ownership can provide valuable context.

Explanation

The FDD discloses the existence of a parent company, JBL Holdings, LLC. However, the parent's financial statements are not included in Item 21. While the franchisor entity itself has provided its own audited financials, the absence of the parent's financials means you have a limited view of the overall financial strength of the controlling entity.

Potential Mitigations

• You could request the parent company's financial statements from the franchisor for a more complete picture of the enterprise's financial health.
• An accountant can help analyze the provided financials to determine if the franchisor appears sufficiently capitalized on its own.
• Consult your attorney on whether the absence of parent financials constitutes a material omission under your state's laws.

Explanation

This risk was not identified. Item 1 of the FDD explicitly states that the franchisor has no predecessors. This means the current franchisor did not acquire the franchise system's assets from a prior company. Therefore, there is no hidden history of litigation, bankruptcy, or franchisee failures associated with a predecessor entity. The history begins with the current franchisor.

Potential Mitigations

• Your attorney can confirm the statement in Item 1 regarding the absence of a predecessor.
• A business advisor can help you research the history of the affiliate company, JBL Roofing and Construction Inc., which provides context for the operational model.
• Inquiring with the franchisor about the history and evolution of the business concept is a good due diligence step.

Explanation

This risk was not identified. Item 3 of the FDD states that there is no litigation that requires disclosure. A pattern of lawsuits, especially those initiated by franchisees alleging fraud or misrepresentation, can be a significant warning sign. The absence of such litigation is a positive factor, although this is expected for a very new franchise system.

Potential Mitigations

• Your attorney can help you perform independent public records searches to verify the "no litigation" disclosure.
• When speaking with current franchisees, you can inquire if they are aware of any disputes within the system.
• It's wise to have a business advisor help you assess the franchisor's dispute resolution philosophy and approach.