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Nick and Moes
How much does Nick and Moes cost?
Initial Investment Range
$253,500 to $3,265,000
Franchise Fee
$45,000 to $135,000
You will operate a convenience store that also offers a gas station and Nick & Moes Famous Fried Chicken or a Convenience Store with a liquor store.
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Nick and Moes April 21, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 22, 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 FDD explicitly states in its "Special Risks" section that Nick and Moes Franchise LLC (Nick and Moes) is undercapitalized and may not meet pre-opening obligations. The 2023 financials showed a net loss, though 2024 improved. This weakness is reinforced by California's requirement that the franchisor post a surety bond. This situation poses a significant risk that the franchisor may lack the resources to provide promised support for your business, jeopardizing your investment.
Potential Mitigations
- A franchise accountant must conduct a thorough review of the franchisor's financial statements, including footnotes and the auditor's report.
- Discuss the implications of the "undercapitalized" warning and the surety bond requirement with your franchise attorney.
- Ask the franchisor directly about their capitalization plans and ability to support new franchisees; a business advisor can help evaluate their response.
High Franchisee Turnover
Medium Risk
Explanation
While there are no operational franchised outlets yet, Exhibit G-2 reveals that one of the initial franchisees who signed an agreement has already left the system without ever opening. For a new system with only a handful of franchisees signed, any failure to launch is a significant concern. This may indicate challenges in the franchisor's site selection, financing assistance, or pre-opening support process which could also impact you.
Potential Mitigations
- Your attorney should help you contact the former franchisee listed in Exhibit G-2 to understand their reasons for not opening.
- Discuss this early-stage failure with the franchisor and ask what steps they have taken to prevent similar issues for new franchisees.
- A business advisor can help you assess if the pre-opening support described in Item 11 seems robust enough given this early failure.
Rapid System Growth
Medium Risk
Explanation
The franchisor, with zero operational franchised outlets, projects opening six in the next fiscal year, which would double the system's total size. For a new company that is explicitly described as "undercapitalized" in the FDD's Special Risks section, this planned growth rate could severely strain its financial and human resources. This may compromise the quality of site selection, training, and opening support available to you and other new franchisees.
Potential Mitigations
- Engaging a business advisor to assess the franchisor's infrastructure and capacity to support its stated growth goals is recommended.
- Your accountant should analyze the franchisor's cash flow to evaluate if it can sustain the support costs for multiple simultaneous openings.
- Discuss with your attorney the potential remedies available if the franchisor fails to provide adequate and timely pre-opening support.
New/Unproven Franchise System
High Risk
Explanation
Nick and Moes was formed in March 2022 and has zero operational franchised outlets. The FDD explicitly highlights its "Short Operating History" as a special risk, confirming it is an early-stage company. This lack of a proven track record for the franchise system itself, distinct from the affiliate-owned stores, means the business model, brand power, and support systems are unproven in a franchised context. This presents a higher-than-average investment risk.
Potential Mitigations
- Perform extensive due diligence on the principals' industry experience and the performance of their affiliate locations with your business advisor.
- Your accountant should scrutinize the financial statements to assess the stability and funding sources of this new venture.
- Given the higher risk, your attorney may be able to negotiate more franchisee-favorable terms, such as better termination rights or lower fees.
Possible Fad Business
Low Risk
Explanation
This specific risk was not identified. The business model, which combines convenience stores with gas stations, fried chicken, or liquor sales, is based on established and long-standing consumer markets. These industries are not typically considered trendy or faddish, which may suggest a more stable long-term demand. However, local competition and economic conditions always pose a risk to any business.
Potential Mitigations
- A business advisor can help you conduct independent market research to verify long-term demand for this specific business combination in your area.
- It is important to have your accountant help you develop financial projections that account for potential shifts in consumer preferences over time.
- Legal counsel should review any territorial protections to ensure they are adequate to compete in a stable market.
Inexperienced Management
Medium Risk
Explanation
The management team detailed in Item 2 has significant experience operating convenience stores and as franchisees of another system (Quizno's). However, their experience as a franchisor is very limited, as the company was only formed in 2022. Managing a franchise system requires a different skill set than running owned units. This lack of a track record in providing system-wide support, training, and brand management could present challenges for you.
Potential Mitigations
- A business advisor can help you assess whether the franchisor has hired experienced staff or consultants to compensate for their limited history as a franchisor.
- It is prudent to discuss the quality and responsiveness of management with the other recently signed franchisees listed in Item 20.
- Your attorney should ensure the franchisor's support obligations in the Franchise Agreement are as specific and enforceable as possible.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 does not disclose ownership by a private equity firm, indicating the franchisor is likely owned by its founding principals. A prospective franchisee should still understand that any future sale of the franchise system to a PE firm or other corporate entity could result in changes to the company's culture, support levels, and strategic priorities.
Potential Mitigations
- Your attorney should confirm the current ownership structure and review the assignment clause in the Franchise Agreement to understand your rights if the system is sold.
- Engaging a business advisor to research the principals' long-term goals for the company could provide insight into the likelihood of a future sale.
- An accountant can help you understand the financial implications if a new owner were to significantly change the fee or support structure.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified. The FDD states in Item 1 that there is no parent company. However, the document does list several "Affiliate" companies operated by the same principals. The financial health and operational success of the franchise system could be intertwined with these related entities. The franchisor relies on the experience of these affiliates in its disclosures, making their stability relevant to your investment.
Potential Mitigations
- Your accountant should review the affiliate relationships described in Item 1 and consider any potential financial interdependencies.
- Discuss with your attorney whether the lack of a formal parent guarantee for the new franchisor entity increases risk.
- A business advisor can help you investigate the reputation and operational history of the listed affiliate companies.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified. The FDD states in Item 1 that the franchisor has no predecessors. This is consistent with it being a new entity formed in 2022. Since there is no predecessor history, you must rely solely on the limited track record of the current franchisor and the business experience of its management and affiliates when assessing risk.
Potential Mitigations
- A business advisor should be engaged to conduct thorough due diligence on the industry and the operational history of the affiliate companies.
- Your attorney should confirm the corporate history to ensure no predecessor entities have been omitted.
- Given the lack of history, an accountant's review of the current financials and projections is especially critical.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified. Item 3 states that no litigation is required to be disclosed. As a new company, a lack of litigation history is expected but offers no insight into how the franchisor will handle disputes in the future. You should pay close attention to the dispute resolution clauses in the Franchise Agreement, as this is your only guide to how conflicts will be managed.
Potential Mitigations
- Your attorney's review of the default, termination, and dispute resolution clauses in the Franchise Agreement is critical.
- It is important to understand that a clean litigation history now does not predict the future; ongoing monitoring is wise.
- Speaking with the first generation of franchisees as they become operational can provide early warnings of potential systemic disputes.
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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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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