Explanation

This risk was not identified in the FDD package. The business of tree maintenance, lawn care, and pest control is a long-established service industry with consistent demand. It is not based on a new or fleeting trend, which reduces the risk that the entire business concept could become obsolete in a short period.

Potential Mitigations

• To assess long-term viability, it's wise to have your business advisor help you research the stability and competitive landscape of the local home services market.
• When evaluating any franchise, your financial advisor can help you consider its resilience to economic cycles and changing consumer spending habits.
• Consult with your attorney to understand your long-term contractual obligations, even if market trends were to change.

Explanation

This risk was not identified. Item 2 indicates that the key management personnel have extensive prior experience in the tree care industry, primarily through the affiliate company, Joshua Tree Inc., which has operated since 2005. Additionally, some executives have previous experience with another large tree care franchise system. This suggests the management team has relevant operational and industry expertise.

Potential Mitigations

• It is still worthwhile to have your business advisor help you vet the backgrounds of key personnel to confirm their specific roles and successes.
• During discussions with existing franchisees, you should ask about their direct experiences with the management team's competence and support.
• An attorney can help you understand the employment history and roles of the executives as described in Item 2.

Explanation

This risk was not identified. Item 1 of the FDD does not indicate that the franchisor is owned or controlled by a private equity firm. The company appears to be a privately held entity connected to its founders. Therefore, risks specifically associated with private equity ownership, such as a focus on short-term returns over system health, do not appear to be present.

Potential Mitigations

• A business advisor can help you research the ownership structure of any franchisor to understand its long-term strategic goals.
• Your attorney should always review Item 1 to confirm the identity of the franchisor, its parents, and affiliates.
• When evaluating any franchise, ask your accountant to analyze how the ownership structure might influence financial decisions and franchisee support.

Explanation

This risk was not identified in the FDD package. Item 1 discloses the franchisor's affiliates, Joshua Tree, Inc. and Joshua Tree House, LLC, but does not mention a parent company. The organizational structure appears to be clearly presented, and there is no indication that a controlling parent entity's financials or identity have been omitted.

Potential Mitigations

• Your attorney should always verify the corporate structure described in Item 1 to ensure all relevant entities are disclosed.
• If a parent company were involved, especially as a guarantor, an accountant should review its financial statements for stability.
• In any franchise review, it is wise to have a business advisor help you understand the relationships between all affiliated companies.

Explanation

This risk was not identified in the FDD package. Item 1 of the FDD states that the franchisor, JTE Franchising LLC, has no predecessors. Therefore, there are no concerns about an undisclosed or negative history from a prior company from which the franchisor acquired the system.

Potential Mitigations

• It is always a good practice for your attorney to review Item 1 of any FDD to understand the full history of the franchisor and its brand.
• A business advisor can help you research the background of a brand, even if no official predecessors are listed.
• When speaking with long-term franchisees, asking about the history of the company can sometimes reveal informal predecessor relationships.

Explanation

This risk was not identified in the FDD package. Item 3 states, “No litigation is required to be disclosed in this Item.” This indicates there is no current or recent history of material litigation involving the franchisor, its management, or predecessors related to fraud, contract violations, or franchise law, which is a positive sign for a prospective franchisee.

Potential Mitigations

• Although no litigation is disclosed, your attorney can conduct an independent search of public records to verify this information.
• It is prudent to discuss with your business advisor how a lack of litigation history in a very young system should be weighed.
• Always ask current franchisees about any disputes they are aware of, even those not rising to the level of formal litigation.