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How much does NerdsToGo cost?
Initial Investment Range
$84,057 to $129,858
Franchise Fee
$58,950 to $63,250
The franchise offered is for a business as a managed IT service provider specializing in services that include, but are not limited to, operating a technology sales, repair, and service business offering a wide variety of computer technology services and products primarily to small-to-medium sized businesses.
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NerdsToGo May 1, 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
Medium Risk
Explanation
The franchisor, GTN Capital Group, LLC (GTN), does not have its own audited financials. Instead, its performance is guaranteed by its parent, Propelled Brands Franchising, LLC (Propelled Brands), whose financials are provided. While Propelled Brands shows profitability, its balance sheet has a very high proportion of intangible assets and goodwill ($454M of $564M total assets in 2024), which carry impairment risks. Assessing GTN's standalone health is difficult, creating reliance on the larger, complex parent company.
Potential Mitigations
- An experienced franchise accountant should review the parent company's consolidated financial statements, including all footnotes and the guarantee.
- It is wise to discuss the implications of a parent company guarantee and the franchisor's lack of standalone financials with your attorney.
- Assess the parent's overall financial health and its commitment to the NerdsToGo brand with your financial advisor.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals significant franchisee turnover. In 2024, the system started with 34 franchised outlets, had only 2 openings, but saw 5 terminations. This represents a termination rate of nearly 15% of the starting base. Furthermore, the total number of franchised outlets declined from 34 to 31 during the year. This high turnover and system shrinkage is a strong indicator of potential systemic issues, franchisee dissatisfaction, or challenges with profitability within the system.
Potential Mitigations
- Your attorney should help you formulate detailed questions for the franchisor regarding the specific reasons for this high termination rate.
- It is critical to contact a significant number of the former franchisees listed in Item 20 to understand their experiences and reasons for leaving.
- A business advisor can help you assess whether these turnover figures indicate systemic problems that could affect your own potential for success.
Rapid System Growth
High Risk
Explanation
The system is not showing rapid growth; in fact, Item 20 data indicates the system is shrinking. The number of franchised outlets decreased from 34 at the start of 2024 to 31 at the end of the year. This lack of growth can be a warning sign regarding the brand's market acceptance or the viability of the business model.
Potential Mitigations
- A business advisor should help you investigate the reasons for the lack of growth and recent outlet decline.
- Question the franchisor directly about their strategies for reversing this trend and supporting existing franchisee profitability.
- Speaking with current franchisees about their growth challenges and the support they receive from the franchisor is a crucial step.
New/Unproven Franchise System
Medium Risk
Explanation
The NerdsToGo franchise system has been operating since 2017 under GTN and has a predecessor dating back to 2006. However, the system remains relatively small (31 franchised units at year-end 2024) and has recently experienced a net decline in the number of outlets. This suggests the system may still be working to establish a strong, sustainable market presence and brand recognition, which could present challenges for a new franchisee.
Potential Mitigations
- A thorough review of the system's history and recent performance with a business advisor is crucial to understand its trajectory.
- Speaking with a broad range of franchisees can provide insight into the brand's strength and challenges in the marketplace.
- Your accountant can help you model a slower ramp-up period due to the smaller brand footprint.
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, posing a risk of declining consumer interest. It is important to assess whether a business model has long-term viability and adaptability beyond current market trends to ensure a sustainable investment.
Potential Mitigations
- Independent market research, with the help of a business advisor, is crucial to evaluate the long-term demand for the franchisor's services.
- Carefully review the franchisor's history of innovation and plans for future development to gauge their commitment to staying relevant.
- Assessing the business's resilience to economic shifts and changing consumer behavior with a financial advisor can provide valuable perspective.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD package. The executive team, largely shared across the Propelled Brands portfolio, appears to have extensive experience in franchising and related industries. This is generally a positive factor. However, it's always wise for you to review the backgrounds of key personnel who will directly support your business to ensure their experience aligns with your needs.
Potential Mitigations
- A business advisor can help you evaluate the backgrounds of the key support staff you will be interacting with directly.
- When speaking with current franchisees, it is useful to inquire about the quality and effectiveness of the management team's support.
- Having your attorney review any management change clauses in the franchise agreement is a prudent step.
Private Equity Ownership
Medium Risk
Explanation
The franchisor's ultimate parent company is affiliated with private equity firms LightBay Capital and Freeman Spogli & Co. This ownership structure can create a focus on maximizing short-term returns for investors, which might not always align with the long-term health of franchisees. The Franchise Agreement also permits the franchisor to sell or assign the entire system to another company, potentially another private equity firm, without your consent, which could change the company's culture and priorities.
Potential Mitigations
- It is wise to research the private equity firms' track record with other franchise brands they have owned.
- Discussing the potential impacts of private equity ownership and system sale with your franchise attorney is a critical step.
- During due diligence calls, asking other franchisees about any changes in fees, support, or direction since the PE involvement began is advisable.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. The FDD clearly discloses the parent company, Propelled Brands Franchising, LLC, and provides its audited financial statements as well as a guarantee of performance for the franchisor entity, GTN. This level of disclosure appears to meet regulatory requirements, giving you a basis to assess the financial health of the ultimate guarantor.
Potential Mitigations
- An accountant should review the parent company's financials and the terms of the guarantee to assess the strength of the financial backing.
- Your attorney can confirm that the parent company's disclosure and guarantee meet all legal requirements.
- Investigating the parent company's overall business health and its other franchise brands can provide additional context.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. The FDD discloses a predecessor, Nerds To Go Franchise Corporation, and its period of operation. This transparency allows you to conduct due diligence on the system's longer-term history. When a franchisor has predecessors, it is important to investigate the reasons for the change in ownership and any inherited issues.
Potential Mitigations
- When a predecessor is listed, it is prudent to ask the franchisor about the transition and any challenges inherited from the prior entity.
- A business advisor could assist in researching the predecessor's public records or news archives for additional context.
- Talking to long-term franchisees who operated under the predecessor can provide valuable firsthand insights.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package. Item 3 does not disclose any litigation against the franchisor or its parent company alleging fraud, misrepresentation, or franchise law violations. The disclosures made relate to past business activities of individuals now associated with the company, not a pattern of litigation against the franchise system itself. The absence of such a pattern is a positive indicator.
Potential Mitigations
- Your attorney can help you conduct an independent search for any litigation involving the franchisor that may not have been required for disclosure.
- It's always a good practice to ask current and former franchisees about their experiences with disputes and the franchisor's handling of them.
- A business advisor can help interpret the significance of any disclosed litigation, even if it doesn't form a pattern.
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.
