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Natural Awakenings
How much does Natural Awakenings cost?
Initial Investment Range
$59,550 to $86,275
Franchise Fee
$49,500
You will own a Natural Awakenings franchise, publishing a print and digital Natural Awakenings magazine, which is a free, local, community magazine with content on natural lifestyles, organic and healthy foods, sustainable, green living, and whole health for people and the planet.
Enjoy our partial free risk analysis below
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Natural Awakenings July 30, 2024 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 explicitly warns of its questionable financial condition, a risk echoed by several state regulators who have mandated the deferral of your initial franchise fees. This indicates a potential inability for Natural Awakenings Publishing Corp. (NAPC) to provide ongoing support or remain solvent. This FDD contains conflicting information, with audited financials showing positive equity while state addenda warn of negative equity, adding to the uncertainty.
Potential Mitigations
- An experienced franchise accountant must thoroughly review all financial statements, footnotes, and the conflicting state disclosures to assess the true financial risk.
- Discussing the specific reasons for the state-mandated fee deferrals with your franchise attorney is crucial to understanding the regulators' concerns.
- Creating contingency plans with a business advisor for potential disruptions in franchisor support could prove vital.
High Franchisee Turnover
Medium Risk
Explanation
The information in Item 20 shows that the total number of franchised outlets has slowly declined over the past three years. While the rate of terminations and cessations is not alarmingly high, a shrinking system can indicate challenges with franchisee profitability, market saturation, or brand relevance. This trend could impact your own potential for growth and the overall health and resources of the franchise system.
Potential Mitigations
- It is important to discuss the reasons for the system's contraction with current and former franchisees.
- Your business advisor can help you assess the long-term viability and growth potential in your specific market.
- Having your accountant model conservative growth scenarios is a prudent step in your financial planning.
Rapid System Growth
Low Risk
Explanation
This specific risk was not identified in the FDD package, as the data in Item 20 indicates the franchise system has been shrinking rather than growing rapidly. Rapid growth can strain a franchisor's ability to provide adequate support to all its franchisees. A stable or controlled growth rate is often a better indicator of a healthy system that can properly support its network.
Potential Mitigations
- A business advisor can help you evaluate the franchisor's growth plans and assess if they have the infrastructure to support future expansion.
- Analyzing the franchisor's financial statements with an accountant will help determine if they have allocated sufficient resources for support services.
- Your attorney should review the franchisor's support obligations in the Franchise Agreement.
New/Unproven Franchise System
High Risk
Explanation
NAPC was formed in September 2022 and acquired the assets of the pre-existing franchise system in December 2022. The FDD's 'Special Risks' section explicitly highlights this short operating history under the current ownership. An emerging franchisor, even one operating a legacy brand, presents risks related to unproven management, potential changes in system direction, and establishing financial stability, which may impact the support you receive.
Potential Mitigations
- Deeper due diligence on the new management's experience in both this industry and franchising is essential; a business advisor can help.
- Speaking with franchisees who have operated under both the old and new ownership can provide valuable insight.
- Your accountant should carefully review the new entity's financial statements to assess its capitalization and initial performance.
Possible Fad Business
Medium Risk
Explanation
The business model centers on local print and digital magazines focused on natural health and sustainable living. While this is an established niche, you should consider its long-term viability and susceptibility to changes in advertising spending and the decline of print media. The franchisor's ability to innovate and adapt its digital offerings, as outlined in Item 11, will be crucial for sustained relevance and to avoid becoming a business tied to a declining trend.
Potential Mitigations
- Independent research into the long-term trends for local and niche print advertising should be conducted with your business advisor.
- Evaluating the franchisor's current digital strategy and plans for future innovation is critical for assessing long-term viability.
- Consulting a financial advisor to weigh the risks of a print-centric model against your investment goals is advisable.
Inexperienced Management
Low Risk
Explanation
This specific risk was not identified, as the executives listed in Item 2 appear to have significant experience. Several key personnel, including the Franchise Sales Managers, have long histories as multi-unit franchisees within the Natural Awakenings system. This direct franchisee experience can be a positive indicator for understanding franchisee needs. However, ensuring management also has strong corporate and financial management skills is equally important for system stability.
Potential Mitigations
- A business advisor can help you assess the balance of operational and corporate management experience on the executive team.
- Speaking with current franchisees can provide insight into the effectiveness and accessibility of the management team.
- Your attorney can help you understand the roles and responsibilities of the key executives as outlined in the franchise documents.
Private Equity Ownership
Low Risk
Explanation
This specific risk was not identified in the FDD package. Item 1 indicates the franchisor, NAPC, is owned by KnoWEwell, P.B.C., a Public Benefit Corporation, not a private equity firm. This ownership structure may suggest a focus on a specific public benefit mission alongside profit, which can have different implications for franchisees than a typical private equity model focused on short-term returns.
Potential Mitigations
- It is wise to have your attorney research the ownership structure and any history of sales of the franchise system.
- A business advisor can help you understand the potential impacts of different ownership structures on a franchise system's long-term strategy.
- Discussing any ownership changes with long-term franchisees can provide valuable historical context.
Non-Disclosure of Parent Company
Medium Risk
Explanation
NAPC's parent company, KnoWEwell, P.B.C., is disclosed in Item 1. However, the parent's financial statements are not included in Item 21. While not always required, their absence can make it difficult to assess the overall financial strength backing the franchisor, especially given the franchisor's short history and the state regulators' expressed concerns about its financial condition. The parent does not appear to provide a financial guarantee for NAPC's obligations.
Potential Mitigations
- Your accountant should analyze the franchisor's financials in the context of it being a subsidiary without a parent guarantee.
- It would be beneficial to ask the franchisor for information regarding the parent company's financial health.
- Your attorney can advise on the implications of the lack of a parent company guarantee for the franchisor's obligations to you.
Predecessor History Issues
Low Risk
Explanation
The franchisor, NAPC, acquired the franchise system from a predecessor entity in December 2022. Item 1 provides the name and last known address of the predecessor. While the disclosure appears to meet legal requirements, it is important to recognize that the system is under relatively new ownership. Any undisclosed historical issues, franchisee dissatisfaction, or operational problems under the predecessor could potentially carry over and affect the current system.
Potential Mitigations
- Asking long-term franchisees about their experiences under the predecessor and through the ownership transition is advisable.
- Your attorney can help you understand the terms of the asset purchase and what liabilities, if any, were assumed by the new franchisor.
- A business advisor can help you research the history and reputation of the predecessor entity if possible.
Pattern of Litigation
Low Risk
Explanation
This specific risk was not identified, as Item 3 states that no litigation is required to be disclosed. The absence of significant lawsuits, especially those initiated by franchisees alleging fraud or misrepresentation, is a positive indicator. It suggests a lower level of conflict within the system. However, this does not eliminate the possibility of future disputes.
Potential Mitigations
- Your attorney should still review the dispute resolution clauses in the Franchise Agreement to understand the process if a conflict arises.
- It is always a good practice to ask current and former franchisees about any informal disputes they may have had.
- A business advisor can help you assess the overall health of franchisor-franchisee relations through due diligence calls.
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
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.