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How much does Oola Bowls cost?
Initial Investment Range
$68,600 to $1,109,000
Franchise Fee
$11,000 to $625,000
We grant qualified individuals and entities the right to operate a fast casual restaurant featuring superfood acai bowls and healthy beverages using the Oola Bowls name and our proprietary methods, marks, and menu items.
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Oola Bowls April 30, 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 franchisor explicitly warns that its financial condition calls into question its ability to provide support. Audited financial statements confirm this, showing a net loss of over $737,000 for 2024 and a significant members' deficit (negative net worth). The company also guarantees over $1.5 million in related party debt. This financial weakness could severely impact the support and services you receive and the overall viability of the brand.
Potential Mitigations
- An experienced franchise accountant must analyze the franchisor's financial statements, including footnotes on debt guarantees, to assess solvency.
- Your attorney should investigate if any financial assurances, like bonds or escrow, are required by your state due to this instability.
- Discuss the franchisor's plan to achieve profitability and manage its large guaranteed debts with your business advisor.
High Franchisee Turnover
High Risk
Explanation
Item 20 data in Exhibit I reveals that three franchisees have terminated their agreements before ever opening their stores within the last two years. For a young system with only seven operating franchised outlets at the end of 2024, this pre-opening termination rate is very high. This may indicate issues with the site selection process, financing challenges for franchisees, or dissatisfaction with the franchisor's pre-opening support.
Potential Mitigations
- It is critical to contact the former franchisees listed in Exhibit I to understand why they terminated their agreements; your attorney can help guide this conversation.
- A business advisor should help you scrutinize the franchisor's site selection and pre-opening support processes.
- Discuss the reasons for these terminations directly with the franchisor and evaluate the credibility of their responses.
Rapid System Growth
High Risk
Explanation
The franchisor plans to more than double its number of franchised outlets in the next fiscal year, from 7 to a projected 21. This rapid expansion, combined with the company's significant net losses and negative net worth, poses a risk that its resources may be stretched too thin. This could potentially lead to inadequate operational support, training, and site selection assistance for new franchisees like you.
Potential Mitigations
- Your business advisor should help you question the franchisor about their specific plans to scale support infrastructure to match this growth.
- In discussions with current franchisees, specifically ask about the recent quality and responsiveness of franchisor support.
- Have your accountant review the company's cash flow and capitalization to assess their genuine capacity to support this expansion.
New/Unproven Franchise System
High Risk
Explanation
The franchisor explicitly discloses that it has a limited operating history and is in an early stage of development, which makes this a riskier investment. The first franchise opened in 2022, and the system is still very small. This lack of a long track record means the business model's long-term viability, brand recognition, and the effectiveness of its support systems are not yet fully proven.
Potential Mitigations
- A thorough due diligence process, guided by your business advisor, is needed to assess the founders' experience and the potential of the core business concept.
- Speaking with the first few franchisees listed in Item 20 is essential to understand their early experiences and challenges.
- Your attorney may be able to negotiate more favorable terms in the franchise agreement to help offset the higher risk.
Possible Fad Business
Medium Risk
Explanation
The business is centered on açaí bowls, a health food trend that has been popular for several years. You should consider the long-term sustainability and mainstream appeal of this concept. There is a potential risk that the market could become saturated or consumer preferences could shift away from this specific trend, which could impact future sales and profitability. The franchise agreement will still be binding even if the trend fades.
Potential Mitigations
- Your business advisor can help you conduct independent market research on the long-term outlook for açaí-focused restaurants in your specific area.
- Evaluate the franchisor's plans for menu innovation and adapting to new food and health trends.
- In your business plan, consider strategies for marketing to a broader customer base beyond just trend-followers.
Inexperienced Management
Medium Risk
Explanation
While the founders have been involved with the Oola Bowls concept since 2018 and have prior franchise experience, many key executives in roles like legal, finance, marketing, and sales joined very recently, in 2024 or 2025. As the system undergoes rapid growth, a newly assembled management team may face challenges in execution, integration, and providing consistent support, which could present a risk to franchisees.
Potential Mitigations
- A business advisor should help you research the backgrounds and track records of the newly appointed executives.
- When speaking with current franchisees, inquire about their interactions with and the effectiveness of the new management team members.
- Question the franchisor on how they are managing the integration of new leadership during a period of planned rapid expansion.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified. The FDD does not indicate that a private equity firm owns or controls the franchisor. However, the franchise agreement gives the franchisor the right to sell the system at any time without your consent. A future sale to a private equity firm could change the franchisor's priorities, potentially affecting franchisee support and costs.
Potential Mitigations
- Understanding the franchisor's long-term goals for the company is a valuable discussion to have, which your business advisor can help facilitate.
- Your attorney can explain the "Assignment" clause in the franchise agreement, which details the franchisor's right to sell the system.
- Regularly communicating with other franchisees through an independent association can provide early insight into any potential sales of the company.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified. The FDD states that the franchisor, Oola Bowls Franchising, LLC, does not have a parent company. This provides clarity on the corporate structure you are entering into a contract with. The franchisor's ability to support you will depend solely on its own financial resources as disclosed in Item 21.
Potential Mitigations
- Your accountant should confirm that the financial statements provided in Item 21 are for the correct legal entity, the franchisor.
- Your attorney can verify the franchisor's corporate standing and ensure there are no undisclosed controlling entities.
- Always ensure the entity named on the franchise agreement is the same one whose information is disclosed throughout the FDD.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD. A franchisor should disclose past business history, including any predecessors from which it acquired assets. A lack of transparency about a system's origins can hide previous issues, such as high failure rates or litigation under prior ownership. Understanding the full history is key to assessing the stability and integrity of the franchise you are considering.
Potential Mitigations
- Your attorney can conduct public record searches to investigate the business history of the franchisor and its key executives.
- Asking long-tenured franchisees about the system's history and any prior ownership structures can be very revealing.
- A business advisor can help you research the brand's history online for news articles or other information.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified. Item 3 of the FDD discloses no history of litigation involving the franchisor, its predecessors, or its management that would be material to a prospective franchisee. The absence of litigation against the franchisor concerning fraud, misrepresentation, or franchise law violations is a positive indicator, although it should be considered alongside the company's short operating history.
Potential Mitigations
- While no litigation is disclosed, a business advisor can help you conduct online searches for any news or public records related to the franchisor or its principals.
- Asking current and former franchisees about any disputes they may have had, even if not formal litigation, can provide valuable insight.
- Your attorney can confirm the lack of litigation through public record searches as part of your due diligence.
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
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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
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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
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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
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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
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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