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Joe Homebuyer

How much does Joe Homebuyer cost?

Initial Investment Range

$131,200 to $444,500

Franchise Fee

$50,000

Our franchisees operate their businesses to provide real estate solutions by buying, rehabilitating, and disposing of residential and commercial properties and using other investment strategy services under the Service Marks and the Joe Homebuyer programs and systems.

Enjoy our complimentary free risk analysis below

Unlock the full risk analysis to access 9 more categories covering 100+ risks.

Joe Homebuyer 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.

1

Franchisor Stability Risks

Start Here
Total: 10
5
0
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor's audited financial statements for the year ending December 31, 2024, reveal a significant Members' Deficit (negative net worth) of ($550,777). The FDD also explicitly highlights the franchisor's financial condition as a special risk. This financial weakness may call into question the company's ability to provide ongoing support, invest in the brand, and fulfill its obligations to you, potentially jeopardizing your investment.

Potential Mitigations

  • Your accountant must conduct a thorough review of the franchisor's complete financial statements, including all footnotes and year-over-year trends.
  • It is crucial to discuss the implications of the franchisor's negative net worth on its long-term viability with your financial advisor.
  • An experienced franchise attorney should explain any state-mandated financial assurances, such as bonds or escrow, that may be in place due to this condition.
Citations: Item 21, Exhibit A

High Franchisee Turnover

High Risk

Explanation

Item 20 tables show an extremely high rate of franchise unit departures. In 2023, 30 units (8 terminations, 22 ceased operations) left the system. In 2024, 20 units (18 terminations, 1 reacquisition, 1 ceased) left. This significant churn, which the franchisor also flags as a "Turnover rate" special risk, suggests potential systemic issues with profitability, franchisee satisfaction, or the overall business model, representing a critical risk to your potential success.

Potential Mitigations

  • With your accountant, you must calculate the annual turnover percentage from the Item 20 tables and discuss its significance.
  • Engaging a business advisor to help you contact a substantial number of former franchisees from the list in Exhibit F is critical to understanding why they left.
  • Your franchise attorney should help you frame questions for the franchisor regarding the specific reasons for this high turnover rate.
Citations: Item 20, Special Risks

Rapid System Growth

High Risk

Explanation

The franchise system is relatively new, having started in 2019, and has grown rapidly, reaching 63 units by the start of 2024. This fast growth, combined with the company's negative net worth as shown in Item 21 and high turnover in Item 20, may indicate that the franchisor's support infrastructure could be strained. There is a risk that resources are focused on selling new franchises rather than supporting existing ones like yours.

Potential Mitigations

  • A business advisor can help you assess whether the franchisor's support systems, as described in Item 11, appear adequate for the system's size.
  • In your discussions with current franchisees, it is important to ask about the quality and responsiveness of the support they currently receive.
  • Your accountant should analyze the franchisor's financial statements to determine if they are reinvesting sufficiently in support infrastructure.
Citations: Items 1, 20, 21

New/Unproven Franchise System

High Risk

Explanation

Joe Homebuyer Franchising, L.L.C. (JHB LLC) began franchising in September 2019, making it a relatively young system. While management has real estate experience, the franchise system itself is not long-established. This newness, combined with high turnover rates (Item 20) and a negative net worth (Item 21), presents a higher risk profile. Unproven systems, developing brand recognition, and potential instability are significant factors for you to consider.

Potential Mitigations

  • A thorough due diligence investigation into the track record of the franchisor and its principals is essential, which can be guided by your business advisor.
  • Engaging with the earliest franchisees in the system can provide valuable insight into its evolution and the franchisor's performance over time.
  • Your accountant should help you create conservative financial projections that account for the risks associated with a newer franchise brand.
Citations: Items 1, 2, 20, 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD Package. The business model, focused on real estate investment services like buying and rehabilitating properties, serves a persistent market need rather than being tied to a short-lived trend. However, any business tied to real estate markets can be cyclical. A business based on a fad could face a collapse in consumer demand, leaving you with a worthless investment.

Potential Mitigations

  • Consulting with a business advisor to research the long-term stability and demand within the real estate investment sector is recommended.
  • You should ask the franchisor about their long-term vision and plans for adapting to different real estate market cycles.
  • Your financial advisor can help you assess the business model's resilience to economic shifts and interest rate changes.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD Package, as the key personnel listed in Item 2 appear to have prior experience in the real estate investment industry. However, a lack of specific experience in managing a franchise system, as opposed to just industry experience, can pose a risk. Inexperienced franchisors may struggle to provide adequate support, training, and strategic guidance, potentially harming the entire system.

Potential Mitigations

  • A business advisor can help you further investigate the franchise-specific management experience of the leadership team.
  • It is wise to ask current franchisees about the quality of support and the effectiveness of the systems provided by the franchisor.
  • Your attorney can help you understand the commitments for support outlined in Item 11 and the Franchise Agreement.
Citations: Items 1, 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package. The franchisor and its parent company, Molinz, LLC, do not appear to be owned by a private equity firm. However, prospective franchisees should be aware that private equity ownership can introduce risks. These firms may prioritize short-term returns over the long-term health of the brand, potentially leading to increased fees, reduced support, or a quick sale of the franchise system.

Potential Mitigations

  • A business advisor can help you research the ownership structure of any franchisor to understand who makes ultimate decisions.
  • If a franchisor is PE-owned, speaking with franchisees about changes since the acquisition is a key due diligence step.
  • Your attorney should review the franchisor's rights to sell or assign the franchise system.
Citations: Item 1

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD Package. JHB LLC discloses its parent company, Molinz, LLC. However, the parent company's financial statements are not included. Generally, if a parent company guarantees the franchisor's obligations or is critical to its operations, its financials should be disclosed. The absence of such financials when they are needed can obscure a complete picture of the system's financial backing and overall stability.

Potential Mitigations

  • Your accountant should review the franchisor's financials and determine if the lack of parent company financials presents a significant information gap.
  • It is important to ask your attorney whether the parent company guarantees any of the franchisor's obligations.
  • You can ask the franchisor directly for the parent's financial statements to gain a fuller understanding of the enterprise.
Citations: Item 1, Item 21

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD Package, as Item 1 states JHB LLC has no predecessors. When a franchisor has acquired a system from a predecessor, it's important to understand that company's history. Negative information, such as prior litigation, bankruptcy, or high franchisee failure rates under the predecessor, could indicate inherited systemic problems that might continue to affect the franchise system under the new ownership.

Potential Mitigations

  • Your attorney should always review Item 1 carefully for any disclosure of predecessor companies.
  • If a predecessor exists, researching its public records and history can provide valuable context, a task your business advisor might assist with.
  • Asking long-term franchisees about their experience under any previous ownership is a crucial due diligence step.
Citations: Item 1

Pattern of Litigation

High Risk

Explanation

A significant inconsistency exists regarding litigation. Item 3 states, "No litigation is required to be disclosed." However, the Notes to the Financial Statements (Note 7) disclose a pending TCPA lawsuit filed in March 2024. Furthermore, the Illinois state addendum mentions pending litigation with a shareholder. Such a pattern or discrepancy in disclosing litigation can be a major red flag about the franchisor's transparency and potential legal troubles, which could divert resources from supporting you.

Potential Mitigations

  • Your attorney must review the specific details of all disclosed litigation in the financials and state addenda to assess their potential impact.
  • The contradiction between Item 3 and other parts of the FDD should be directly questioned with the help of your legal counsel.
  • A business advisor can help you research public records for any additional litigation history not disclosed.
Citations: Item 3, Exhibit A, Exhibit D
2

Disclosure & Representation Risks

Total: 15
8
0
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

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3

Financial & Fee Risks

Total: 10
2
6
2

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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4

Legal & Contract Risks

Total: 16
5
4
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

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5

Territory & Competition Risks

Total: 5
3
1
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

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6

Regulatory & Compliance Risks

Total: 10
4
4
2

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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7

Franchisor Support Risks

Total: 4
2
1
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

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8

Operational Control Risks

Total: 12
3
4
5

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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9

Term & Exit Risks

Total: 18
11
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

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10

Miscellaneous Risks

Total: 2
2
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