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Men In Kilts
How much does Men In Kilts cost?
Initial Investment Range
$98,600 to $151,450
Franchise Fee
$39,475 to $40,975
You will operate a business that provides window cleaning, gutter cleaning, pressure washing, siding cleaning, snow removal and other related services that we authorize.
Enjoy our partial free risk analysis below
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Men In Kilts April 29, 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 franchisor's parent and guarantor, HS Group Holding Company, LLC (HSGH), has significant, multi-million dollar net losses for the past two audited years (2023, 2024), a key risk highlighted by the franchisor itself. For 2024, HSGH reported a net loss of over $13 million. Its current assets are substantially less than its current liabilities, indicating potential liquidity issues. This financial condition could impact its ability to support you and grow the brand.
Potential Mitigations
- Your accountant must conduct a thorough review of the parent company's audited financial statements, including all footnotes, to assess its financial stability.
- Discuss the implications of the parent company's sustained losses and low liquidity with a financial advisor to evaluate the risk to your investment.
- It is advisable to ask your attorney about the strength and practical enforceability of the parent's performance guarantee.
High Franchisee Turnover
Medium Risk
Explanation
Item 20 data reveals a notable level of franchisee churn. In 2023, the combined US and Canadian systems saw 5 terminations on a starting base of 39 franchised outlets, representing a turnover rate of nearly 13% for that year. While rates in other years were lower, this pattern suggests potential challenges within the system that may lead to franchisees leaving. Understanding the reasons for these departures is a critical part of your due diligence.
Potential Mitigations
- Speaking with a significant number of former franchisees from the list in Exhibit F is crucial to understand why they left the system.
- Your business advisor can help you analyze the turnover rates over the three-year period to identify any concerning trends.
- It is wise to ask the franchisor for their perspective on the reasons for the franchisee exits reported in Item 20.
Rapid System Growth
Medium Risk
Explanation
The franchise system has experienced steady but not alarmingly rapid growth in the U.S. over the last three years, adding a net of 2 to 8 outlets per year. However, this growth must be considered in the context of the parent company's significant financial losses. There is a risk that resources may be focused more on franchise sales to generate cash flow rather than on providing robust, scalable support for new and existing franchisees.
Potential Mitigations
- With your business advisor, you should question the franchisor about their specific plans and budget for scaling support infrastructure.
- It is important to ask a wide range of current franchisees, both new and established, about the quality and timeliness of support they currently receive.
- Your accountant should review the parent company's financial statements to assess if available cash is being allocated to support operations or primarily to service debt.
New/Unproven Franchise System
Medium Risk
Explanation
The franchisor, Men In Kilts, US, LLC (MIK), began offering franchises in March 2019. The FDD highlights a "Short Operating History" as a special risk. A newer franchise system may have less-established operational procedures, brand recognition, and support structures compared to more mature systems. This can present a greater level of uncertainty and risk for a new franchisee, as the business model and its long-term viability are still being proven in the market.
Potential Mitigations
- Engaging a business advisor to perform extensive due diligence on the system's performance and market position is a prudent step.
- It's beneficial to contact the earliest franchisees listed in Item 20 to learn about their experience with the system's evolution and support.
- Your accountant should help you build financial projections that account for the higher risks associated with a younger franchise brand.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. A 'fad' business is one tied to a short-lived trend, which can be a significant risk. If consumer interest wanes, your business could face declining sales and potential failure, even though your long-term contractual obligations to the franchisor remain. Assessing the long-term, sustainable consumer demand for the product or service is a crucial step in evaluating any franchise opportunity.
Potential Mitigations
- It is important to conduct independent market research with your business advisor to assess the long-term demand for the services offered.
- You should evaluate the business's resilience to economic downturns and changing consumer trends with a financial advisor.
- Asking the franchisor about their long-term plans for innovation and service diversification can provide valuable insight.
Inexperienced Management
Medium Risk
Explanation
The business experience described in Item 2 shows that many key executives hold parallel roles across numerous other franchise brands under the parent company, Threshold Brands. For example, the CEO, CFO, and CLO hold these same titles for MIK and all its affiliates. While experienced, their attention is divided across a large portfolio of different businesses. This could potentially dilute the focus and dedicated strategic leadership available specifically for the Men In Kilts brand.
Potential Mitigations
- During discussions with the franchisor, inquire about the management structure and who is specifically dedicated to the day-to-day success of the Men In Kilts brand.
- Contacting current franchisees to ask about their access to and the responsiveness of key leadership is an important diligence step.
- A business advisor can help you assess whether the executive team's broad responsibilities might pose a risk to brand-specific support.
Private Equity Ownership
High Risk
Explanation
The franchisor is ultimately owned by funds managed by The Riverside Company, a private equity firm. Private equity ownership can mean a focus on maximizing financial returns, which may lead to decisions that benefit investors over the long-term health of franchisees. This could manifest as increased fees, reduced support to cut costs, or a future sale of the franchise system. The parent company's significant financial losses may increase pressure for such measures.
Potential Mitigations
- A business advisor can help you research the private equity firm's reputation and track record with other franchise systems.
- It is important to ask current franchisees if they have observed any changes in fees, support, or company direction since the acquisition by private equity.
- Your attorney should review the Franchise Agreement for any terms that give the franchisor broad rights to sell the system without your consent.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. The franchisor clearly discloses its parent company, HS Group Holding Company, LLC (HSGH), and provides its audited financial statements as a guarantor. Generally, a risk arises if a franchisor is a thinly capitalized subsidiary and fails to disclose its parent or the parent's financials when required. This can obscure the true financial strength and backing of the franchise system.
Potential Mitigations
- Ensuring that any performance guarantees are made by a financially sound entity is a task for your accountant.
- Your attorney should confirm that the FDD properly discloses the relationship between the franchisor and any parent or affiliated companies.
- Verifying that the parent's financial statements are included when they guarantee performance is a critical check for your legal and financial advisors.
Predecessor History Issues
Low Risk
Explanation
Item 1 discloses that the franchisor purchased the intellectual property rights from a predecessor, MIKFS, in 2019. While the FDD provides the predecessor's name and address, a complete history of the predecessor's performance, including potential litigation or franchisee turnover, is not detailed. This could obscure historical challenges or issues inherent in the franchise system that predate the current franchisor's ownership, limiting your ability to assess the system's full track record.
Potential Mitigations
- Your attorney should carefully review the disclosures about the predecessor and the nature of the asset purchase.
- It would be prudent to conduct independent online searches for information, news, or franchisee complaints related to the predecessor entity, MIKFS.
- When speaking with long-term Canadian franchisees (from Item 20), ask about their experiences under the predecessor's management.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package, as Item 3 states, "No litigation is required to be disclosed in this Item." Generally, a pattern of litigation, especially lawsuits initiated by franchisees alleging fraud or misrepresentation, is a significant red flag. It can indicate systemic problems with the franchisor's sales process, support obligations, or overall business practices. A high number of suits filed by the franchisor against franchisees can also suggest an overly aggressive relationship.
Potential Mitigations
- It is good practice to have your attorney conduct an independent search for litigation involving the franchisor, its parent, and its principals.
- You should always ask current and former franchisees about their experiences with disputes and how the franchisor handles disagreements.
- Understanding the dispute resolution processes outlined in Item 17 is crucial, and your attorney can provide a full explanation.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
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.
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