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OpenWorks

O.P.E.N. America, Inc.
https://www.openworksweb.com
1-602-224-0440
2355 East Camelback Road, Suite 600, Phoenix, Arizona 85016

How much does OpenWorks cost?

Initial Investment Range

$4,250 to $134,480

Franchise Fee

$2,580 to $72,080

The franchisee will offer commercial janitorial services under the name OpenWorks.

Enjoy our partial free risk analysis below

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OpenWorks March 25, 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.

1

Franchisor Stability Risks

Start Here
Total: 10
3
1
6

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor's audited financial statements show a significant decline in financial health. For the year ending Dec. 31, 2024, net income dropped to approximately $227,000 from $4.46 million the prior year. Stockholder's equity also fell sharply from $15.6 million to $7.4 million, partly due to large distributions and new stockholder loans. This financial weakening could impact the franchisor's ability to support you and grow the brand.

Potential Mitigations

  • Your accountant must conduct a thorough review of the financial statements, including all notes, to assess the franchisor's stability and cash flow.
  • A business advisor can help you evaluate whether the franchisor's financial condition presents an acceptable level of risk for your investment.
  • Discuss the reasons for the significant drop in profitability and equity with the franchisor and have your attorney review their explanation.
Citations: Item 21, Exhibit J

High Franchisee Turnover

High Risk

Explanation

Item 20 tables show an extremely high rate of franchisee exits. In 2024 alone, 257 franchises were terminated from a starting base of 615, a turnover rate of nearly 42%. Over the last three years, the system has shrunk from 726 to 414 units. The Washington state addendum explicitly highlights this high turnover as a special risk. Such a high exit rate may indicate systemic problems, franchisee dissatisfaction, or lack of profitability within the system.

Potential Mitigations

  • It is critical to contact a significant number of former franchisees listed in Item 20 to understand why they left the system; your attorney can help prepare questions.
  • A business advisor should help you analyze the potential reasons for such a high turnover rate and assess the viability of the business model.
  • Your accountant can help model the financial impact if your business becomes one of the many that do not continue.
Citations: Item 20, FDD Exhibit B (Washington Addendum)

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD Package. The franchise system is shrinking significantly, rather than growing rapidly. A rapidly expanding system can sometimes strain a franchisor's ability to provide adequate support to all its franchisees. It is a factor to consider when evaluating the level of support you can expect to receive.

Potential Mitigations

  • A business advisor can help you analyze the system's growth or decline rate and its potential implications for your business.
  • When reviewing any franchise, it is wise to have an accountant assess if the franchisor's financials can support its stated growth plans.
Citations: Not applicable

New/Unproven Franchise System

Low Risk

Explanation

This risk was not identified in the FDD Package. O.P.E.N. America, Inc. (OpenWorks) was incorporated in 1987 and has been franchising for many years. An unproven system can carry higher risks, as its business model, brand recognition, and support structures may not be well-established. This does not appear to be the case here.

Potential Mitigations

  • When evaluating any franchise opportunity, it's wise to have your business advisor assess the franchisor's history and track record in the industry.
  • Your attorney should always verify the franchisor's operating history as stated in Item 1 of the FDD.
Citations: Not applicable

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD Package. The business offers commercial janitorial services, which is a long-standing industry with consistent demand. A fad business is one based on a short-term trend, which can create significant risk for franchisees who are locked into long-term agreements that may outlast consumer interest.

Potential Mitigations

  • A business advisor can help you research market trends and the long-term viability of any industry you consider entering.
  • Your financial advisor should assist in evaluating whether a business concept has sustainable demand before you invest.
Citations: Not applicable

Inexperienced Management

Medium Risk

Explanation

Several key executives, including the President, Chief Financial Officer, and Vice President of Provider Growth, were appointed in 2024. While the CEO has long-term experience, this significant, recent turnover in top management, coinciding with a period of sharp financial decline and extremely high franchisee turnover, could indicate instability or challenges within the franchisor's leadership and strategic direction. New leadership may bring different philosophies and operational priorities that could impact your business.

Potential Mitigations

  • You should discuss the recent management changes with the franchisor to understand their strategy for addressing the system's challenges.
  • A business advisor can help you research the background and track record of the new executive team members.
  • It is important to ask current franchisees about any noticeable changes in support or direction since the new leadership team was put in place.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 does not indicate that OpenWorks is owned by a private equity firm. Private equity ownership can sometimes introduce a focus on short-term financial returns, which may not always align with the long-term health of the franchisees or the brand. This can lead to changes in fees, support, or system direction.

Potential Mitigations

  • Your attorney should always investigate the ownership structure of the franchisor as disclosed in Item 1.
  • If a franchisor is owned by a private equity firm, a business advisor can help you research that firm's history with other franchise brands.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 states that OpenWorks does not have a parent company. When a franchisor is a subsidiary, it is important to review the parent company's financial statements, if provided, as the subsidiary's stability may depend on the parent's financial health.

Potential Mitigations

  • Your attorney can help you understand the corporate structure of the franchisor, including any parent or affiliate relationships.
  • An accountant should review any provided parent company financials to assess the overall stability of the enterprise.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD Package. Item 1 discusses the company's history but does not indicate any predecessors from which it acquired the business. Understanding a predecessor's history is important as it can reveal inherited issues related to litigation, bankruptcy, or franchisee relations that may still affect the current system.

Potential Mitigations

  • Your attorney should always review Item 1 carefully for any mention of predecessors.
  • If a predecessor is identified, a business advisor can help you conduct due diligence on its history and reputation.
Citations: Not applicable

Pattern of Litigation

High Risk

Explanation

Item 3 discloses a significant number of lawsuits brought by franchisees against OpenWorks. The allegations in these cases include breach of contract, failure to deliver on promises, fraud, and misrepresentation. A pattern of such litigation initiated by franchisees is a major red flag, potentially indicating systemic issues in the franchise relationship, dissatisfaction with the business model, or disputes over the franchisor's performance of its obligations.

Potential Mitigations

  • Your attorney must thoroughly review the details of each lawsuit disclosed in Item 3.
  • It is critical to ask the franchisor about the substance of these claims and their resolution.
  • A business advisor can help you assess how this litigation history reflects on the overall health and integrity of the franchise system.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
4
0
11

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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3

Financial & Fee Risks

Total: 10
4
5
1

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

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4

Legal & Contract Risks

Total: 16
11
2
3

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.

5

Territory & Competition Risks

Total: 5
2
1
2

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.

6

Regulatory & Compliance Risks

Total: 10
7
2
1

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.

7

Franchisor Support Risks

Total: 4
3
1
0

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.

8

Operational Control Risks

Total: 12
2
7
3

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.

9

Term & Exit Risks

Total: 18
11
2
5

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.

10

Miscellaneous Risks

Total: 2
2
0
0

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.