Orange Leaf Logo

Orange Leaf

Orange Leaf FC, LLC
https://orangeleafyogurt.com
1-214-302-5910
14860 Montfort Drive, Suite 150 PMB 34, Dallas, Texas 75254

Initial Investment Range

$106,500 to $645,500

Franchise Fee

$20,000 to $80,000

You will operate a retail store offering primarily authentic frozen yogurt and treats, yogurt and non-yogurt based smoothie beverages and shakes, frozen cakes and treats, other beverages and confectionary items, and related products and services, under the trade name ORANGE LEAF and ORANGE LEAF Frozen Yogurt.

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Orange Leaf April 3, 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
2
4
4

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor explicitly warns in the FDD's “Special Risks” section that its financial condition “calls into question the franchisor's financial ability to provide services and support to you.” While the 2024 financials show a profit, the company had significant net losses in 2023 and 2022. This history of losses, combined with the franchisor's own warning, presents a substantial risk to its long-term ability to support your business and grow the brand.

Potential Mitigations

  • A franchise accountant should conduct a deep analysis of the financial statements for the last three years, focusing on the reasons for prior losses and the sustainability of the recent profit.
  • It is crucial to discuss the explicit financial risk warning with the franchisor and have your attorney assess its implications.
  • Your financial advisor can help you create contingency plans for potential disruptions in franchisor support or services.
Citations: Item 21, FDD Special Risks

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a high rate of franchisee exits over the past three years. The system saw a net decline from 82 to 61 franchised outlets between the start of 2022 and the end of 2024. The tables show 26 total outlets left the system through termination, non-renewal, cessation of operations, or reacquisition during that period. This significant turnover may indicate systemic issues with profitability, franchisee satisfaction, or the overall business model, posing a high risk to your investment.

Potential Mitigations

  • It is critical that you contact a significant number of former franchisees listed in Exhibit F to understand why they left the system.
  • An analysis of the churn rate with your business advisor, comparing it to industry benchmarks, can provide important context.
  • Your franchise attorney can help you frame specific questions for the franchisor regarding the high number of ceased operations.
Citations: Item 20, Tables 1 & 3

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD package. While the system has added a few new stores, the overall trend shown in Item 20 is one of contraction, not rapid growth. A franchisor expanding too quickly can strain its ability to provide adequate support to new and existing franchisees. This can lead to issues with training, site selection, and ongoing operational assistance, potentially harming the entire system.

Potential Mitigations

  • A review of the franchisor’s financial statements with your accountant can help assess if they have the capital to properly support their stated growth plans.
  • In discussions with current franchisees, it is useful to ask about the quality and timeliness of the support they receive from the corporate office.
  • Your business advisor can help you evaluate if the franchisor's support infrastructure seems adequate for its size and projected growth.
Citations: Not applicable

New/Unproven Franchise System

Medium Risk

Explanation

The franchisor, Orange Leaf FC, LLC (Orange Leaf), was formed in December 2020 and is part of a larger, complex holding company structure under BRIX Holdings, LLC. While the Orange Leaf brand has existed longer, this specific franchising entity is relatively new. The management team appears to have experience from other brands within the BRIX portfolio, but operating within this complex structure presents a different set of challenges than a standalone, long-established franchisor.

Potential Mitigations

  • Your business advisor should help you research the track record of BRIX Holdings and its management of other franchise brands.
  • Speaking with franchisees who have been with the system through the ownership changes can provide insight into the transition and current support levels.
  • A thorough review of the franchisor’s financials with your accountant is important to assess its stability as a newer entity.
Citations: Item 1, Item 2

Possible Fad Business

Medium Risk

Explanation

The frozen yogurt market is well-established but can be subject to changing consumer tastes and intense competition from other dessert concepts. While not a new trend, the long-term growth potential may be limited compared to other food service sectors. You should consider whether the business model has demonstrated adaptability and staying power beyond initial trends, as your contractual obligations will continue regardless of shifts in consumer preferences.

Potential Mitigations

  • Engage a business advisor to research the long-term outlook for the frozen yogurt industry in your specific local market.
  • In discussions with the franchisor, inquire about their strategies for innovation and adapting to evolving consumer dessert preferences.
  • Speaking with long-term franchisees can provide valuable insight into how they have managed seasonality and competition over time.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. Item 2 indicates that the key executives of Orange Leaf have extensive experience in the food service and franchise industries, many with long tenures at affiliated brands like Friendly's or TGI Fridays. This level of experience generally suggests a strong understanding of franchise operations and support systems. However, their specific experience with the Orange Leaf brand itself is more recent.

Potential Mitigations

  • A business advisor can help you further research the professional backgrounds and track records of the key executives listed in Item 2.
  • It is still valuable to ask current franchisees about their direct experiences with the management team's effectiveness and support.
  • Your attorney can help you formulate questions for the franchisor about how the management team's prior experience is being applied to the Orange Leaf system.
Citations: Item 2

Private Equity Ownership

Medium Risk

Explanation

Item 1 discloses that Orange Leaf is part of a brand portfolio managed by BRIX Holdings, LLC, which functions like a private equity owner. This structure can introduce risks, such as a focus on short-term returns that may not align with your long-term goals as a franchisee. Decisions about fees, support levels, and system changes could be influenced by the holding company's financial objectives and exit strategy, potentially impacting your profitability and operational stability.

Potential Mitigations

  • A business advisor can help you research BRIX Holdings' reputation and its historical management of other franchise brands in its portfolio.
  • In your discussions with current franchisees, inquire about any changes in system policies or support since the acquisition by BRIX Holdings.
  • Your attorney should review any clauses in the Franchise Agreement that permit the sale or assignment of the franchise system.
Citations: Item 1, Item 21

Non-Disclosure of Parent Company

Medium Risk

Explanation

The franchisor, Orange Leaf FC, LLC, is a subsidiary of Orange Leaf, LLC, which is in turn owned by BRIX Holdings, LLC. While the FDD discloses this parent-subsidiary structure, the financial statements provided in Item 21 are only for Orange Leaf FC, LLC, the direct franchisor. No financial statements for the parent entities are included, which may obscure the overall financial strength and resources backing the entire system.

Potential Mitigations

  • Your accountant should review the provided financials with the understanding that they represent only the franchising entity, not the parent company.
  • It is important to have your attorney review the Franchise Agreement to determine if the parent company provides any financial guarantees for the franchisor's obligations.
  • You can ask the franchisor if they are willing to provide financial information for the parent companies to allow for a more complete risk assessment.
Citations: Item 1, Item 21

Predecessor History Issues

Low Risk

Explanation

Item 1 identifies Orange Leaf Holdings, LLC as the predecessor from whom the current franchisor acquired the system's assets in 2020. While the FDD discloses this transition, a change in ownership can sometimes lead to shifts in company culture, support levels, and strategic direction. The performance and satisfaction of franchisees under the predecessor may not be representative of the experience you will have with the current ownership and management.

Potential Mitigations

  • Speaking with franchisees who have operated under both the predecessor and current franchisor can provide invaluable insight into the changes.
  • Your business advisor can help you understand the implications of the asset acquisition and the current holding company structure.
  • Carefully review the litigation and bankruptcy history in Items 3 and 4 for any issues related to the predecessor.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states, “No litigation is required to be disclosed in this Item.” While this is a positive indicator, it does not guarantee the absence of all disputes. It simply means there has been no recent litigation that meets the specific disclosure requirements of franchise law. It's still important to understand the franchisor's overall approach to franchisee relationships.

Potential Mitigations

  • In discussions with current and former franchisees, you should still inquire about their relationship with the franchisor and how disputes are typically handled.
  • Your attorney can help you perform an independent search for litigation involving the franchisor or its affiliates that may not have required disclosure.
  • Reviewing the default and dispute resolution clauses in the Franchise Agreement with your attorney remains a crucial step.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
5
3
7

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
5
4
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
6
6
4

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
3
2
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.

6

Regulatory & Compliance Risks

Total: 10
4
4
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.

7

Franchisor Support Risks

Total: 4
1
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.

8

Operational Control Risks

Total: 12
5
6
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.

9

Term & Exit Risks

Total: 18
10
6
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.

10

Miscellaneous Risks

Total: 1
1
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.