Jerk King Logo

Jerk King

Jerk King Franchising USA, LLC
https://www.jerkkingus.com
1-507-884-1345
60 East Broadway, S385, Bloomington, MN 55425

Initial Investment Range

$247,826 to $771,400

Franchise Fee

$59,000 to $300,000

The franchisee will open and operate one or more take-out and delivery Jerk King restaurants specializing in the sale of Caribbean-style food, and related programs, products and services.

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Jerk King April 17, 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
3
1
6

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

Jerk King LLC's audited financials in Exhibit C show a history of significant net losses with no revenue since its 2023 inception, funded entirely by member contributions. This is flagged as a "Special Risk" on page 4. The company's ability to provide support or even remain viable appears dependent on continued funding from its owner. Several states require fee deferrals due to this financial weakness, posing a substantial risk to your investment.

Potential Mitigations

  • Your accountant must scrutinize the audited financials and all accompanying notes, particularly the reliance on member funding for liquidity.
  • A business advisor should help you assess the risk of investing in a franchisor with a limited financial history and no operational revenue.
  • Legal counsel should explain the potential consequences if the franchisor becomes insolvent.
Citations: Special Risks, Item 21, FDD Exhibit C, Virginia Addendum, Illinois Addendum, Maryland Addendum, Minnesota Addendum, North Dakota Addendum, South Dakota Addendum, Washington Addendum

High Franchisee Turnover

Low Risk

Explanation

Item 20 data shows no franchisee turnover because Jerk King LLC has not had any operating franchisees. While this specific risk is not present, a lack of operating history from other franchisees means there is no track record to evaluate for system-wide satisfaction, profitability, or potential operational challenges. This absence of data is itself a significant risk.

Potential Mitigations

  • A business advisor can help you understand the risks associated with being one of the first franchisees in a new system.
  • Engaging an attorney is crucial to negotiate more protective terms in the franchise agreement to offset this uncertainty.
  • Your accountant should help you build financial models with higher contingency funds due to the unproven nature of the business.
Citations: Not applicable

Rapid System Growth

Low Risk

Explanation

The FDD does not indicate rapid system growth, as there are currently no franchised outlets. This specific risk is not a concern at this time. However, it is always important for a prospective franchisee to monitor a franchisor's growth plans to ensure that support infrastructure keeps pace with any future expansion.

Potential Mitigations

  • Discussing the franchisor's future growth strategy with a business advisor can provide insight into their long-term plans.
  • Legal counsel can review the agreement for any mandatory development schedules that might force rapid growth on your part.
  • Periodically reviewing updated FDDs with your accountant can help track system growth over time.
Citations: Not applicable

New/Unproven Franchise System

High Risk

Explanation

Jerk King LLC is a new franchisor, formed in 2023, with no existing franchisees and only one U.S. company-owned affiliate location. This is flagged as a "Special Risk" for its "Short Operating History." You would be among the very first franchisees, which carries a higher risk as the business model, support systems, and brand recognition are largely unproven in the marketplace.

Potential Mitigations

  • With a business advisor, conduct extensive due diligence on the viability of the single corporate location and the underlying business concept.
  • Your franchise attorney should attempt to negotiate more favorable terms, such as reduced royalties or better termination rights, to compensate for this higher risk.
  • An accountant should help you develop conservative financial projections, recognizing the lack of historical franchisee data.
Citations: Special Risks, Item 1, Item 20, Item 21

Possible Fad Business

Medium Risk

Explanation

The business focuses on Caribbean-style food, which has an established market, but the "Jerk King" brand itself is new and unproven. As one of the first franchisees, you carry the risk of determining whether this specific concept has long-term consumer demand or is a novelty with limited staying power. The long-term viability of the brand itself is a key uncertainty.

Potential Mitigations

  • Engage a business advisor to research the local market demand for this specific type of ethnic cuisine and price point.
  • Assess the franchisor's long-term vision and plans for menu innovation and brand development.
  • Your financial advisor can help you model a longer-than-average payback period to account for the risk of building a new brand.
Citations: Item 1

Inexperienced Management

High Risk

Explanation

Item 2 shows that while the management team has experience operating "Jerk King" restaurants, they appear to have no prior experience in managing a franchise system. This lack of specific franchising expertise presents a significant risk, as it may affect the quality of training, support, and strategic decisions necessary to successfully grow and manage a network of franchisees.

Potential Mitigations

  • With a business advisor, probe the franchisor about what outside franchise expertise (consultants, experienced staff) they have engaged to build their systems.
  • Your attorney should carefully review the franchisor's contractual support obligations, as inexperience may lead to gaps in assistance.
  • It is critical to speak with any available professional references for the management team to gauge their business acumen.
Citations: Item 1, Item 2

Private Equity Ownership

Low Risk

Explanation

The FDD does not indicate that the franchisor is owned by a private equity firm. This particular risk, which often involves a focus on short-term returns over franchisee health, is not identified in the documents. Ownership appears to be closely held, which can present its own set of risks and benefits to consider.

Potential Mitigations

  • Discussing the franchisor's long-term goals and exit strategy with a business advisor is always a valuable exercise.
  • An attorney can help you understand the implications of the "Assignment by Franchisor" clause, regardless of ownership structure.
  • An accountant's review of the financial statements can help assess the stability of any ownership structure.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

Item 1 of the FDD states that Jerk King LLC has no parent companies, so the risk of non-disclosure of a controlling parent entity is not present. The franchisor does disclose its relationship with its Canadian affiliates and the licensor of the intellectual property, providing some clarity on the corporate structure.

Potential Mitigations

  • Your attorney should still confirm the corporate structure and the relationships between all disclosed affiliate entities.
  • An accountant can help assess the financial stability of the primary franchising entity itself.
  • A business advisor can help you understand the operational relationships between the US franchisor and its Canadian affiliates.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

Item 1 of the FDD states that the franchisor has no predecessors. Therefore, the risk of inheriting undisclosed historical problems such as litigation, bankruptcy, or franchisee failures from a prior entity is not applicable. The analysis is focused on the current franchisor entity, which is a new company.

Potential Mitigations

  • Verifying the franchisor's history through public records searches can be a useful step, which your attorney can assist with.
  • A business advisor can help research the history of the key individuals involved, even if the corporate entity is new.
  • Focus due diligence efforts on the current management team's track record with their affiliated companies.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

Item 3 of the FDD discloses no history of material litigation involving the franchisor, its management, or its predecessors. The absence of litigation, especially claims of fraud or breach of contract from other franchisees, is a positive indicator. However, as a new franchisor with no franchisees, there has been limited opportunity for such disputes to arise.

Potential Mitigations

  • Your attorney can conduct independent public record searches to confirm the absence of litigation.
  • Speaking with business references of the management team can provide insight into their business practices.
  • Maintaining open communication and documenting all significant interactions can help prevent future disputes.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
3
1
11

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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3

Financial & Fee Risks

Total: 10
5
4
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

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4

Legal & Contract Risks

Total: 16
7
5
4

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
3
4
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.

7

Franchisor Support Risks

Total: 4
3
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.

8

Operational Control Risks

Total: 12
4
7
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
12
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.

10

Miscellaneous Risks

Total: 1
1
0
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.