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How much does KidStrong cost?
Initial Investment Range
$448,100 to $1,005,000
Franchise Fee
$227,000 to $660,000
We license the right to operate KIDSTRONG® franchised centers, which offer "whole child" development programs focused on building stronger kids through innovative training, including in the areas of physical fitness, leadership, and confidence building.
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KidStrong 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The FDD explicitly flags the franchisor's financial condition as a special risk. The audited 2024 financial statements in Item 21 confirm this, showing a member's equity deficit of ($427,728) and significant liabilities. This weak financial position calls into question the ability of KidStrong Franchising LLC (KidStrong) to provide ongoing support and fulfill its obligations, posing a significant risk to your investment. Several state addenda require fee deferrals due to this condition.
Potential Mitigations
- Your accountant must conduct a thorough review of the financial statements, including all footnotes, to assess the franchisor's viability and dependence on selling new franchises.
- A franchise attorney should explain the implications of any state-required financial assurances, like deferred fees, and their level of protection for you.
- Discuss the franchisor's financial health and plans for achieving stability with your business advisor before making any commitment.
High Franchisee Turnover
Low Risk
Explanation
Item 20 data for the most recent full year (2024) indicates a relatively low turnover rate. Out of 89 franchised outlets at the start of the year, two ceased operations for other reasons, with no terminations or non-renewals recorded. While not alarmingly high, you should still investigate the circumstances behind these closures and the 16 transfers that occurred during the same year.
Potential Mitigations
- Speaking with former franchisees listed in Exhibit E is crucial to understand their reasons for leaving the system; your business advisor can help you formulate questions.
- An accountant should analyze the data in Item 20 tables for the last three years to identify any accelerating negative trends.
- It is wise to ask your attorney about the legal distinctions between transfers, terminations, and ceased operations, as these categories can sometimes mask distressed sales.
Rapid System Growth
Medium Risk
Explanation
The system is experiencing rapid growth, expanding from 52 to 121 franchised outlets in the last two years. While growth can be positive, this pace, combined with the franchisor's disclosed weak financial condition, presents a risk. KidStrong may struggle to provide adequate training and support for this expanding network, potentially diluting the quality of service you receive after paying your fees.
Potential Mitigations
- Your business advisor should help you question the franchisor about their specific plans and budget for scaling support infrastructure to match unit growth.
- It is important to ask a wide range of existing franchisees, both new and established, about the current quality and responsiveness of franchisor support.
- A careful review of the franchisor's financial statements with your accountant can help assess if they have the resources to sustain this growth.
New/Unproven Franchise System
Medium Risk
Explanation
KidStrong Franchising LLC began offering franchises in August 2019, making it a relatively young system. While the management team has prior business experience, operating a franchise system at scale presents unique challenges. The rapid growth combined with a newer system means operational processes and support structures may still be maturing, which could present a higher risk compared to more established franchise brands.
Potential Mitigations
- Conducting extensive due diligence on the founders' and management's specific experience in franchising, not just their industry, is a valuable step to take with your business advisor.
- A discussion with the earliest franchisees about how the system and support have evolved since they joined can provide important insights.
- Assessing the franchisor's capitalization and financial stability with your accountant is critical for a young system.
Possible Fad Business
Low Risk
Explanation
The business model is centered on 'whole child' development programs, a popular and competitive market. While the concept appears robust, its long-term sustainability depends on its ability to adapt to changing educational trends and consumer demands. You should consider whether the specific curriculum and methods have lasting appeal or if they are tied to current fitness and parenting trends that might shift over time.
Potential Mitigations
- An independent assessment of the long-term market demand for this specific type of child development program with a business advisor is recommended.
- Evaluating the franchisor's stated plans for curriculum innovation and adaptation in Item 11 can offer insight into their long-term vision.
- Consider the business model's resilience to economic downturns and shifts in discretionary family spending with your financial advisor.
Inexperienced Management
Medium Risk
Explanation
While the franchisor's key executives have experience in business and in the fitness industry, their collective experience specifically in managing a large, rapidly growing franchise system appears to be more recent. As disclosed in Item 2, several executives joined from other franchise systems or roles within the last few years. The effectiveness of this management team in supporting a system of this size is a factor to consider.
Potential Mitigations
- A thorough review of the management team's background, with specific attention to their experience managing franchise systems of a similar size and growth rate, is prudent.
- Discussions with existing franchisees about their direct experiences with the management team's responsiveness and strategic direction are highly recommended.
- Engaging a business advisor to help evaluate the leadership team's capacity to handle the complexities of a fast-growing franchise network is a sound strategy.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD Package. Private equity ownership can sometimes lead to a focus on short-term profitability over the long-term health of the brand, potentially affecting franchisee support and costs. It is important to understand the ownership structure of any franchisor you consider.
Potential Mitigations
- For any franchise, it is beneficial to research the ownership structure and the track record of the parent company, if any, with your business advisor.
- Asking existing franchisees about any changes in the system's direction or support levels can provide valuable context about ownership's influence.
- Your attorney can review the Franchise Agreement for clauses related to the sale or transfer of the franchise system.
Non-Disclosure of Parent Company Financials
Medium Risk
Explanation
The franchisor, KidStrong Franchising LLC, is a wholly-owned subsidiary of KidStrong, Inc. (the Parent). The FDD discloses the Parent but does not provide its separate financial statements, nor does it state that the Parent guarantees the franchisor's performance. Since the franchisor has a negative net worth, the financial strength of the overall enterprise remains partially obscured without the Parent's financials.
Potential Mitigations
- Your accountant should analyze the franchisor's financials in the context of it being a subsidiary and question the lack of a parent guarantee.
- It is advisable for your attorney to ask the franchisor if they will provide the Parent's financial statements for a more complete picture of the enterprise's health.
- Understanding the full corporate structure and any financial interdependencies with your business advisor is a key due diligence step.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD Package, as KidStrong Franchising LLC does not list any predecessors. When a franchisor has predecessors, it is important to review their history for any signs of past trouble, such as litigation or bankruptcy, which could indicate unresolved issues within the system.
Potential Mitigations
- In any FDD review, your attorney should carefully check Item 1 for any disclosed predecessors.
- If predecessors are listed, researching their history for past litigation or financial issues can provide valuable insights into the system's background.
- Asking long-term franchisees about their experience under any previous ownership is a wise step, as recommended by business advisors.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 3 states, "No litigation must be disclosed in this Item." The absence of significant litigation against the franchisor is a positive indicator. However, this does not guarantee future disputes will not arise.
Potential Mitigations
- It is still prudent to ask current and former franchisees about any disputes they may have had, even if they did not result in litigation.
- Your attorney can explain the types of disputes that are common in franchise systems.
- Maintaining open communication with the franchisor and adhering to the agreement can help prevent future disputes.
Disclosure & Representation Risks
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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Financial & Fee Risks
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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Legal & Contract Risks
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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Territory & Competition Risks
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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Purchase the complete risk review to see all 102 risks across all 10 categories.
Regulatory & Compliance Risks
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.
Franchisor Support Risks
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.
Operational Control Risks
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.
Term & Exit Risks
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.
Miscellaneous Risks
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.