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Overtime Athletics

Overtime Franchise LLC
https://www.otathletics.com
1-720-689-4133
11654 Plaza America Drive, #628, Reston, Virginia 20190

How much does Overtime Athletics cost?

Initial Investment Range

$46,400 to $58,500

Franchise Fee

$35,000

The franchisee will operate a specialty sports instruction services business designed specifically for children, offering training, programs and classes with an emphasis on both traditional sports and other movement related athletic activities, as well as offering day camps, tournaments, special event activities, and related services and products.

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Overtime Athletics March 13, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 21, 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 net operating losses for the two most recent fiscal years (2023 and 2024). More significantly, the notes state the financials are prepared on a “cash basis,” which is not in accordance with Generally Accepted Accounting Principles (GAAP). This may obscure the true financial health and raises questions about the franchisor's long-term ability to support you, despite having positive working capital and equity.

Potential Mitigations

  • Your accountant must conduct a thorough review of the financial statements, paying close attention to the implications of cash-basis accounting versus standard GAAP.
  • A financial advisor can help you assess if the franchisor's reliance on new franchise fees, rather than profitable operations, is a sustainable business model.
  • Inquire with your attorney about the significance of the non-GAAP financial reporting and its potential legal implications.
Citations: Item 21, Exhibit B

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a high and increasing number of franchisees “Ceased Operations” over the last three years (12% in 2022, 15% in 2023, 17% in 2024), while showing zero terminations or non-renewals. This high churn rate, potentially masked under a benign label, is a critical red flag indicating possible systemic problems, franchisee dissatisfaction, or lack of profitability within the system.

Potential Mitigations

  • You should contact a significant number of former franchisees listed in Exhibit E to understand their specific reasons for leaving the system.
  • Analyzing the underlying reasons for this high turnover with your business advisor is essential to gauge the health of the franchise.
  • An accountant can help you calculate the effective churn rate and discuss its potential impact on your investment's risk profile.
Citations: Item 20, Exhibit E

Rapid System Growth

Medium Risk

Explanation

The franchise system nearly doubled in size over the last three years, growing from 25 to 49 units. While this shows demand for the franchise, this rapid expansion occurred while the franchisor was operating at a financial loss and experiencing high franchisee turnover. This combination suggests that growth may be straining the franchisor's ability to provide adequate support to its franchisees.

Potential Mitigations

  • It is important to ask current franchisees about the quality and timeliness of the support they are receiving from the corporate office.
  • A business advisor can help you question the franchisor about how they plan to scale their support infrastructure to match unit growth.
  • Have your accountant review the franchisor's financials to assess if they have the cash flow and resources to adequately support a rapidly expanding system.
Citations: Items 20, 21

New/Unproven Franchise System

Low Risk

Explanation

This risk was not identified in the FDD package. An unproven system can present higher risks due to a lack of brand recognition, untested operational procedures, and potential instability. The franchisor began franchising in 2016 and has grown to 49 units, indicating it is past the initial startup phase.

Potential Mitigations

  • For any franchise, it is wise to have a business advisor help you research the franchisor's history and the system's track record.
  • Speaking with the earliest franchisees in a system can provide valuable insight into how the franchisor has evolved and handled challenges.
  • Your accountant should always review the franchisor's financial statements to gauge its stability, regardless of its age.
Citations: Not applicable

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The business offers specialty sports instruction services for children, which is an established and recognized market sector rather than a short-term trend or fad. Investing in a fad business is risky because consumer interest can disappear, leaving you with a potentially obsolete business and ongoing contractual obligations.

Potential Mitigations

  • A business advisor can assist you in conducting market research to gauge the long-term consumer demand for any franchise's products or services.
  • You should always evaluate a franchisor’s plans for innovation and adaptation to stay relevant in a changing market.
  • With a financial advisor, consider the business model's resilience to economic shifts and its sustainability beyond any current trends.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. Item 2 indicates that the key executives have been in their roles since the company's inception in 2016 and have prior, long-term experience in the same industry with an affiliated company. Inexperienced leadership can pose a risk through weak support systems and poor strategic guidance.

Potential Mitigations

  • A business advisor can help you vet the backgrounds of the franchisor's key management team.
  • It is always prudent to ask existing franchisees about their confidence in the leadership team's vision and operational competence.
  • An attorney can help you understand the experience and track record of the management team disclosed in Item 2.
Citations: Not applicable

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 indicates the franchisor is a privately held LLC and does not appear to be owned or controlled by a private equity firm. PE ownership can sometimes introduce risks related to prioritizing short-term returns over the long-term health of the system.

Potential Mitigations

  • Investigating the ownership structure of any franchisor with your attorney is a key due diligence step.
  • If a franchisor is owned by a private equity firm, a business advisor can help you research that firm's track record with other franchise brands.
  • It's beneficial to ask current franchisees about any changes in system operations or philosophy after an ownership change.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 clearly states that Overtime Franchise LLC has no parent company. When a franchisor is a subsidiary, the financial health of the parent can be a critical factor, and its financials may be required for a complete risk picture.

Potential Mitigations

  • Your attorney can help you understand the franchisor's corporate structure as disclosed in Item 1.
  • If a parent company exists and guarantees the franchisor's obligations, having an accountant review the parent's financial statements is crucial.
  • Always clarify with the franchisor if any undisclosed affiliated companies play a major role in the system's operations.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 of the FDD states that the franchisor has no predecessors. A predecessor's history, including any past litigation, bankruptcy, or high franchisee turnover, can be an important indicator of potential inherited issues within a franchise system.

Potential Mitigations

  • Your attorney should always review Item 1 carefully for any disclosure of predecessor entities.
  • If a predecessor is identified, conducting independent research on its history with a business advisor can be highly valuable.
  • Asking long-term franchisees about their experience under any previous ownership can provide important context.
Citations: Not applicable

Pattern of Litigation

High Risk

Explanation

Item 3 discloses a significant regulatory enforcement action by the Commonwealth of Virginia. The franchisor was sanctioned for selling five unregistered franchises and failing to provide the FDD to those buyers, resulting in a $15,000 penalty. A state action for violating franchise sales laws is a serious red flag concerning the franchisor’s past compliance practices and diligence.

Potential Mitigations

  • A thorough review of the consent order and the specifics of the regulatory action with your franchise attorney is essential.
  • Asking the franchisor what specific changes they have made to their compliance procedures since this event is a key question.
  • Your business advisor can help you assess how this past behavior might reflect on the franchisor's current culture and support.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
3
1
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
2
5
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.

4

Legal & Contract Risks

Total: 16
9
3
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
2
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.

7

Franchisor Support Risks

Total: 4
2
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.

8

Operational Control Risks

Total: 12
7
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.

9

Term & Exit Risks

Total: 18
9
4
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.