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N Zone Sports
How much does N Zone Sports cost?
Initial Investment Range
$54,400 to $87,450
Franchise Fee
$39,750 to $54,750
The franchise that we offer is for the operation of an N ZONE SPORTS franchised business offering youth sports leagues and/or sporting related camps, and other related services for children ages 3 -17.
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N Zone Sports April 9, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 19, 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
A state regulator has directly raised concerns about the financial health of N Zone Sports of America, LLC (N Zone LLC). The Illinois Addendum, imposed by the Attorney General, requires deferral of your initial franchise fee until after you open, specifically stating it is "due to Franchisor's financial condition." This is an explicit warning from a state agency about potential financial instability, which could impact the franchisor's ability to support you or sustain the system.
Potential Mitigations
- Your accountant must conduct an in-depth analysis of the franchisor's financial statements, paying close attention to cash flow, debt, and profitability trends.
- A franchise attorney should investigate the specifics of the Illinois regulatory action and its implications for the entire system's stability.
- It is crucial for your business advisor to help you assess if the franchisor has sufficient capital to meet its support obligations without relying on new franchise sales.
High Franchisee Turnover
High Risk
Explanation
The franchisor's own data in Item 20 Table 3 appears to show a high franchisee turnover rate, but the data is presented inconsistently. Summing the state-by-state data for 2022 suggests 15 ceased operations, a very high number. However, the summary row for the same year lists only 1. This significant discrepancy makes it difficult to assess the true health of the system and may indicate problems with franchisee success or satisfaction that are not being clearly reported.
Potential Mitigations
- You should contact a significant number of former franchisees listed in Exhibit E-2 to understand their reasons for leaving the system.
- Discussing the data inconsistency with your accountant is essential to gauge the potential level of risk from franchisee churn.
- Your attorney can help you formulate questions for the franchisor regarding the conflicting turnover data presented in Item 20.
Rapid System Growth
Medium Risk
Explanation
The system shows significant expansion, growing from 44 to 68 outlets in 2024, a 54% increase in a single year. While growth can be positive, such rapid expansion can strain a franchisor's resources. This may risk stretching their ability to provide the necessary training, site selection assistance, and ongoing operational support to all franchisees, potentially affecting the quality of support you receive.
Potential Mitigations
- Asking current franchisees, particularly those who opened recently, about the quality and responsiveness of franchisor support is an important step.
- Your business advisor can help evaluate if the franchisor's support infrastructure, as described in Item 11, appears adequate for this rapid growth.
- An accountant should review the franchisor's financials to assess if they have the capital to adequately support a much larger system.
New/Unproven Franchise System
Medium Risk
Explanation
While the franchisor has been operating since 2011, the system's significant recent growth and the regulatory concerns noted by the State of Illinois could present risks. An unproven ability to manage a much larger system, combined with disclosed financial concerns, may impact the franchisor's ability to provide consistent support and maintain brand standards, which is a risk for any new franchisee joining the system.
Potential Mitigations
- Thorough due diligence on management's experience in scaling a franchise system should be conducted with your business advisor.
- Speaking with the earliest franchisees listed in Item 20 can provide insight into the system's evolution and the franchisor's long-term performance.
- Your accountant's review of the financial statements in Item 21 is critical to understanding the company's stability and resources.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD Package. A fad business is one based on a short-lived trend, which can be a significant risk if consumer interest disappears. For any franchise, it is important to assess whether the core product or service meets a sustainable, long-term consumer need or if it caters to a more fleeting interest. Long-term viability is key to the potential for return on your investment.
Potential Mitigations
- It is prudent to have a business advisor help you research the long-term market demand for the services you will offer.
- Considering the business model's resilience to economic shifts and changing consumer tastes with your financial advisor can be beneficial.
- Assessing the franchisor's history of innovation and adaptation provides insight into their potential for long-term relevance.
Inexperienced Management
Medium Risk
Explanation
Item 2 indicates the current President has been with N Zone LLC since January 2024, having previously worked for a different franchise system. While prior franchise experience is positive, a relatively new president could mean shifts in company strategy, culture, or operational focus. You should assess if the management team's collective experience is sufficient to navigate the brand's rapid growth and address its regulatory and financial challenges.
Potential Mitigations
- Engaging a business advisor to help research the background and track record of the key executives is a valuable step.
- It is wise to ask current franchisees about their perception of the management team's leadership and strategic direction.
- Directly asking the franchisor about their long-term vision and plans for the company can provide important context.
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 franchisees. This could manifest as increased fees, reduced support, or pressure to use specific vendors. It's a factor to consider in any franchise evaluation, as a change in ownership can alter the franchisor's priorities and operational philosophy.
Potential Mitigations
- If a franchisor is owned by a private equity firm, researching the firm's history with other franchise brands is recommended.
- Consulting an attorney to understand any terms related to the sale of the franchise system is important.
- A discussion with your business advisor about the potential impacts of private equity ownership on your specific situation would be helpful.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD Package. Franchisors sometimes operate as subsidiaries of a larger parent company. If the parent company is not disclosed, or if its financial statements are not provided when they are material to the franchisor's viability, you may lack a complete picture of the financial strength and stability backing your franchise. This information is crucial for assessing the long-term security of the system.
Potential Mitigations
- Your attorney can help verify the franchisor's corporate structure to identify any undisclosed parent companies.
- An accountant should review any provided parent company financials to assess the overall health of the consolidated enterprise.
- Understanding the legal relationship and any guarantees between a parent and the franchisor is a key task for your attorney.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD Package. A franchisor's predecessor is a prior entity that operated the system. If the FDD omits or provides incomplete information about a predecessor's history, such as prior litigation, bankruptcy, or franchisee failures, you may be unaware of historical problems that could still affect the system's health and reputation. A clear understanding of the system's entire history is important for a complete risk assessment.
Potential Mitigations
- An attorney should carefully review Item 1 for any mention of predecessors and their history in Items 3 and 4.
- Engaging a business advisor to help you research a predecessor's public record and reputation can uncover valuable information.
- Asking long-term franchisees about their experiences under any previous ownership is a critical due diligence step.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 3 requires the disclosure of certain types of litigation against the franchisor. A pattern of lawsuits from franchisees alleging fraud, misrepresentation, or breach of contract can be a major red flag, potentially indicating systemic issues with the franchisor's business practices or franchisee relationships. Similarly, a high number of lawsuits initiated by the franchisor may suggest an overly aggressive or litigious culture.
Potential Mitigations
- An attorney should always be engaged to thoroughly analyze any litigation disclosed in Item 3.
- It is prudent to ask a business advisor to help you understand the business implications of any disclosed legal disputes.
- Contacting franchisees involved in past or pending litigation, if possible, can provide invaluable firsthand insight.
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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