Monster Tree Service Logo

Monster Tree Service

Monster Franchising SPE LLC
https://www.monstertreeservice.com
1-410-740-1900
7120 Samuel Morse Drive, Suite 300, Columbia, Maryland 21046

Initial Investment Range

$33,860 to $534,510

Franchise Fee

$6,000 to $55,500

The franchise described in this disclosure document is for the operation of a Monster Tree Service business, which offers residential and commercial tree services, including tree removal, pruning, land clearing, stump grinding, plant healthcare and other tree care services.

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Monster Tree Service April 28, 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
2
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The audited financial statements for the parent guarantor, AB Assetco LLC (AB Assetco), show a significant net loss of over $14.3 million for the 2024 fiscal year. This is a sharp reversal from an $8.1 million net income in 2023. This loss, driven by a large impairment charge, combined with a dramatic decrease in cash, could indicate financial instability that may impact the franchisor’s ability to provide support and grow the brand.

Potential Mitigations

  • Your accountant must conduct a thorough analysis of the guarantor's financial statements, including all footnotes and the nearly $18 million impairment loss.
  • Discuss with a financial advisor the potential risks associated with a franchisor system whose parent guarantor has experienced a recent, significant operating loss.
  • Ask the franchisor about the cause of the impairment loss and what steps are being taken to return to profitability.
Citations: Item 21, Exhibit I

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals an extremely high franchisee turnover rate. In 2024, 48 franchised territories (11 terminations + 37 ceased operations) exited the system out of a starting base of 214. This represents a 22.4% annual turnover rate, a critical indicator of potential systemic problems, franchisee dissatisfaction, or issues with profitability. This figure suggests a significant risk to the long-term viability of a franchise investment.

Potential Mitigations

  • It is imperative to contact a large number of the former franchisees listed in Exhibit G to understand why they left the system.
  • Your business advisor should help you analyze this high turnover rate in the context of the system's overall health and growth.
  • Your attorney should help you frame questions for the franchisor regarding the specific reasons for this significant number of exits.
Citations: Item 20, Table 3

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD package. Rapid system growth can strain a franchisor's resources, potentially leading to inadequate support for individual franchisees. It is important to assess if a franchisor's support infrastructure is keeping pace with its unit growth to ensure new and existing franchisees receive the assistance they need to succeed.

Potential Mitigations

  • Engaging a business advisor to question the franchisor about their plans for scaling support infrastructure is beneficial.
  • Speaking with franchisees who have been in the system for different lengths of time can provide insight into the consistency of support.
  • Your accountant can review the franchisor's financials to assess if they are reinvesting sufficiently to support their growth.
Citations: Item 20

New/Unproven Franchise System

Low Risk

Explanation

This risk was not identified in the FDD package. The franchisor's predecessor began franchising in 2012, and the system has a substantial number of outlets. Investing in a new or unproven franchise system carries higher risk, as the business model may not be validated and the franchisor may lack experience in providing support. Careful due diligence is always required.

Potential Mitigations

  • A business advisor can help you conduct thorough due diligence on the management team's experience in both the industry and in franchising.
  • Speaking with the earliest-operating franchisees can provide valuable insight into the system's evolution and the franchisor's learning curve.
  • An accountant should be engaged to scrutinize the financial stability and capitalization of any new franchise.
Citations: Item 1, Item 2, Item 20

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The market for tree services is well-established. A fad business is one tied to a fleeting trend, which can create long-term risk for a franchisee who is locked into a multi-year contract. It is crucial to assess whether consumer demand for a franchise's products or services is sustainable over the life of the agreement.

Potential Mitigations

  • A business advisor can help you research the long-term market demand and competitive landscape for the services offered.
  • Reviewing the franchisor's plans for innovation and adaptation in Item 11 is a key step in assessing long-term viability.
  • Your financial advisor should help you consider the business model's resilience to economic shifts and changing consumer tastes.
Citations: Item 1, Item 11

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. The executive team described in Item 2 appears to have significant experience in franchising and related service industries. Inexperienced management can be a major risk, as it may lead to flawed strategies, weak support systems, and poor operational guidance. Assessing the background of the key leadership is a critical due diligence step.

Potential Mitigations

  • A business advisor can help you vet the management team's background for relevant experience in both the specific industry and in franchising.
  • When speaking with existing franchisees, asking about their direct experiences with the management team provides valuable insight.
  • It is wise to research the recent performance of other brands managed by the executive team.
Citations: Item 2

Private Equity Ownership

Medium Risk

Explanation

Item 1 discloses that the franchisor, Monster Franchising SPE LLC (Monster LLC), is ultimately owned by funds advised by Apax Partners, LLP, a private equity firm. This ownership structure may introduce risks, as private equity firms often have a primary goal of maximizing investor returns over a fixed period. This could potentially lead to decisions, such as increasing fees or reducing support, that favor short-term profitability over the long-term health of franchisees.

Potential Mitigations

  • A business advisor can help you research the private equity firm's reputation and track record with other franchise brands.
  • It is important to ask current franchisees about any changes in fees, support, or system direction since the private equity acquisition.
  • Your attorney should review the assignment clauses in the Franchise Agreement to understand what happens if the system is sold again.
Citations: Item 1

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. The franchisor is part of a complex structure under Authority Brands, Inc., and the FDD includes audited financials for the parent guarantor, AB Assetco LLC. Failing to disclose a parent company or provide its financial statements when required can hide significant risks related to the system's true financial backing and stability.

Potential Mitigations

  • Your attorney should confirm that the provided financials are for the correct entity guaranteeing the franchisor's obligations.
  • An accountant needs to analyze the financial statements of any parent or guarantor entity to assess the overall health of the system.
  • If a parent entity is mentioned but its financials are not included, it's crucial to ask your attorney whether they should have been provided.
Citations: Item 1, Item 21, Exhibit I

Predecessor History Issues

Medium Risk

Explanation

Item 1 discloses a history of predecessors, including Monster Franchise, LLC and Monster New Franchisor. Item 3 discloses litigation involving a predecessor, with franchisees alleging fraud. While these specific cases were settled, this history is a crucial part of due diligence. A history of issues under prior ownership could indicate unresolved systemic problems or a culture that may persist under new management, representing a potential risk to new franchisees.

Potential Mitigations

  • Ask your attorney to carefully review all disclosures related to predecessors, including any litigation or bankruptcy history.
  • It is wise to contact franchisees who have been in the system long enough to have operated under a predecessor to discuss their experience.
  • A business advisor can help you research the public record and reputation of any predecessor entities.
Citations: Item 1, Item 3, Item 20

Pattern of Litigation

High Risk

Explanation

Item 3 discloses two arbitration cases from 2016 initiated by franchisees against the franchisor's predecessor. Both cases included allegations that “Respondents defrauded claimants” and threatened termination if franchisees revealed the alleged fraud. Although these specific cases were settled and dismissed, a history of franchisee litigation involving fraud allegations is a significant red flag that warrants serious consideration and further investigation into the franchisor's business practices.

Potential Mitigations

  • Your franchise attorney must carefully review the details and outcomes of all litigation disclosed in Item 3.
  • Considering the nature of the allegations, you should ask the franchisor for their perspective on these historical disputes.
  • It is critical to discuss the franchisor's current relationship with its franchisees with a wide range of operators listed in Item 20.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
7
2
6

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
4
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

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4

Legal & Contract Risks

Total: 16
4
7
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

Unlock Full Risk Analysis

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5

Territory & Competition Risks

Total: 5
3
2
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.

6

Regulatory & Compliance 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

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
1
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.

8

Operational Control Risks

Total: 12
4
3
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

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
7
9
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

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 2
1
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.