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Paint Corps

Paint Corps Franchise Group LLC
https://www.paintcorps.com
1-844-464-3672
13 Columbia Drive, Suite 19, Amherst, New Hampshire 03031
FDD Version:

How much does Paint Corps cost?

Initial Investment Range

$130,950 to $182,400

Franchise Fee

$74,000 to $99,000

A business that provides residential and commercial painting, cabinet refinishing, and other services and products using our system under the PAINT CORPS marks.

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Paint Corps April 30, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 19, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
4
1
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor explicitly warns in the 'Special Risks' section that its financial condition “calls into question the franchisor’s financial ability to provide services and support to you.” The audited financial statements in Exhibit D show high liabilities relative to equity, confirming this risk. This may impact the franchisor's ability to support your business or invest in the brand's growth, despite the fees you pay for that support.

Potential Mitigations

  • A franchise accountant should perform a detailed analysis of the audited financial statements, including all footnotes and balance sheet trends.
  • Discuss the specific financial weaknesses with the franchisor and inquire about their plans to improve financial stability.
  • Consulting your attorney is crucial to understand any state-mandated financial assurances, like bonds or escrows, that may be in place.
Citations: FDD Special Risks § 4, Item 21, FDD Exhibit D

High Franchisee Turnover

High Risk

Explanation

Item 20 data from 2023 indicates a very high franchisee turnover rate. During that year, three out of a starting base of seven franchised outlets left the system via termination, reacquisition, or cessation of operations. A turnover rate of this magnitude can be a significant indicator of potential systemic problems, such as issues with profitability, franchisee satisfaction, or franchisor support. This level of churn suggests a substantial risk to your investment.

Potential Mitigations

  • It is critical to contact a significant number of the current and former franchisees listed in Item 20 to discuss their experiences and reasons for leaving.
  • A thorough analysis of the Item 20 tables with your accountant is needed to calculate the precise turnover rates over the last three years.
  • Your attorney can help you frame questions for the franchisor regarding the high number of terminations and cessations.
Citations: Item 20 Table 3

Rapid System Growth

High Risk

Explanation

The franchise system is undergoing very rapid expansion, growing from one to eleven total outlets in its first three years. When combined with the franchisor's disclosed financial weakness and high franchisee turnover, this rapid growth presents a significant risk. The franchisor's resources may be stretched too thin to provide the adequate training, marketing, and operational support necessary for new franchisees to succeed, potentially compromising the quality of the system.

Potential Mitigations

  • Asking the franchisor direct questions about their capacity and infrastructure for supporting this rapid growth is an important step.
  • A discussion with your business advisor can help assess if the franchisor's support systems are scalable.
  • Contacting a wide range of franchisees, both new and established, can provide insight into the current quality of support.
Citations: Item 20 Table 1

New/Unproven Franchise System

High Risk

Explanation

The franchisor explicitly identifies its "Short Operating History" as a special risk. The company was established in late 2021 and only began franchising in February 2022. Investing in a new and unproven franchise system carries a higher level of risk. The business model, support systems, and brand recognition are not yet well-established, which could impact your potential for success compared to joining a more mature franchise system.

Potential Mitigations

  • A business advisor can help you conduct extensive due diligence on the backgrounds of the management team, focusing on their direct experience in franchising.
  • Speaking with the earliest franchisees in the system is crucial to understand their experience with the developing support structure.
  • Your attorney may be able to negotiate more franchisee-favorable terms to help offset the higher risk associated with a new system.
Citations: FDD Special Risks § 3, Item 1

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The business model, which involves residential and commercial painting services, is a well-established industry with consistent demand and is not based on a fleeting trend or fad. This provides a degree of stability regarding long-term market relevance for the services you would offer.

Potential Mitigations

  • Even in an established industry, a business advisor can help you analyze local market competition and demand.
  • Discuss the franchisor's plans for innovation and service development with them to understand how they intend to stay competitive.
  • Your financial advisor can assist in assessing the business's resilience to local economic cycles.
Citations: Not applicable

Inexperienced Management

Medium Risk

Explanation

While the management team has some industry and franchising experience, it is not extensive. For example, a key executive's primary experience until recently was as a pilot. For a new franchise system facing rapid growth and financial challenges, the depth of the management team's direct franchising experience is a critical factor for success. This relative lack of deep experience could present a risk to the quality of strategic guidance and support you receive.

Potential Mitigations

  • It would be beneficial to have a detailed discussion with the management team about their specific roles and experience.
  • Speaking with existing franchisees about their confidence in the management team's leadership and support is a key due diligence step.
  • Your business advisor can help you assess the overall strength and background of the leadership team.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 details a complex ownership structure involving other franchise-related entities, but there is no disclosure of ownership by a private equity firm. Therefore, the specific risks often associated with a PE firm's short-term investment horizon, such as rapid fee increases or cuts in support to maximize investor returns, do not appear to be present here.

Potential Mitigations

  • Understanding the motivations and goals of the actual ownership group is still important, which you can discuss with your attorney.
  • A business advisor can help you research the track record of the parent companies mentioned in Item 1.
  • Reviewing the franchisor's right to sell the system in the Franchise Agreement with your attorney remains a prudent measure.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. The franchisor appears to provide significant detail in Item 1 regarding its parent companies and affiliates, such as Veteran Franchise Group LLC and G-FORCE Franchise Group LLC. The complex structure is disclosed, rather than obscured, allowing for a review of the various entities involved in the franchise system.

Potential Mitigations

  • A thorough review of the relationships between all affiliated companies listed in Item 1 with your attorney is recommended to understand the complete organizational structure.
  • An accountant can help assess how these inter-company relationships might impact the franchisor's financial stability.
  • Your attorney can verify if the financial statements of any parent entities are required to be disclosed based on state or federal rules.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 of the FDD clearly states that the franchisor does not have any predecessors. This means the company's history as disclosed in Items 3 (Litigation) and 4 (Bankruptcy) is its own and does not carry potential liabilities or a negative track record from a prior entity.

Potential Mitigations

  • It is still prudent for your attorney to confirm the corporate history and ensure no assets were acquired from a troubled entity that should have been disclosed.
  • A business advisor can assist in researching the history of the key individuals in management, even if the company itself has no predecessors.
  • Verifying the franchisor's formation date with the New Hampshire Secretary of State is a simple due diligence step.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states that there is no litigation that requires disclosure. This suggests the franchisor is not currently involved in significant legal disputes with franchisees or other parties concerning claims of fraud, misrepresentation, or franchise law violations, which is a positive indicator.

Potential Mitigations

  • Even with no disclosed litigation, your attorney can conduct a public records search to look for any other legal actions.
  • Speaking with current and former franchisees can provide insight into whether there are common disputes that have not yet resulted in litigation.
  • Understanding the dispute resolution process in the Franchise Agreement with your attorney is important for any future issues.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
2
2
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
5
3
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.

4

Legal & Contract Risks

Total: 16
5
7
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
1
2
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
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
3
5
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.

9

Term & Exit Risks

Total: 18
8
8
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
0
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.