Painter Bros Logo

Painter Bros

Painter Bros Franchising, LLC
https://www.painterbros.com
1-800-644-2514
2801 N. Thanksgiving Way, Ste. 360, Lehi, Utah 84043

Initial Investment Range

$234,430 to $1,237,780

Franchise Fee

$90,000 to $565,500

As a Painter Bros franchisee, you will operate a painting business that provides professional residential and commercial painting services to the public, businesses, and to government agencies using our proprietary methods and system.

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Painter Bros April 17, 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

Painter Bros Franchising, LLC's (Painter Bros) audited financial statements reveal a members' deficit (negative net worth) of over $577,000 for 2024, meaning its liabilities exceed its assets. This condition is also noted in a "Special Risks" section and has led several states to require that your initial fees be deferred. This raises potential concerns about the franchisor's long-term financial stability and its ability to provide promised support or withstand economic challenges.

Potential Mitigations

  • Having your accountant thoroughly analyze the franchisor's complete financial statements, including footnotes and cash flow statements, is essential.
  • It is important to understand the terms of any state-mandated fee deferral or financial assurance with your franchise attorney.
  • Discussing the company's plan to address its negative equity with the franchisor's management could provide valuable context.
Citations: Item 4, Item 21, FDD Exhibit B, State Addenda

High Franchisee Turnover

High Risk

Explanation

While the Item 20 tables show rapid growth, a critical note in the Item 19 section reveals a significant risk. Of the three franchises operating at the start of 2023, one ceased operations and the other two operated only "intermittently." This suggests a very high rate of trouble or failure within that early cohort of franchisees, raising questions about the system's viability and support structure for new owners.

Potential Mitigations

  • A business advisor should help you contact every former franchisee listed in Item 20 to understand their reasons for leaving the system.
  • You should directly question the franchisor about the circumstances leading to the intermittent operations and cessation of the 2023 franchisee cohort.
  • Your attorney can help you frame specific questions for both the franchisor and former franchisees regarding this issue.
Citations: Item 19 (Note 10), Item 20

Rapid System Growth

High Risk

Explanation

The franchise system is expanding at an extremely rapid pace, growing from 2 to 29 franchised outlets in just two years. When coupled with the franchisor's negative net worth and issues noted with early franchisees, this rapid growth may strain its ability to provide adequate and timely training and ongoing operational support to all new owners. This could directly impact your own launch and long-term success.

Potential Mitigations

  • In discussions with current franchisees, a business advisor can help you specifically inquire about the quality and timeliness of support during this growth phase.
  • Questioning the franchisor on how they have scaled their support staff and systems to manage this expansion is crucial.
  • Your accountant can help assess if the franchisor's financial resources, as shown in Item 21, are sufficient to sustain this growth.
Citations: Item 11, Item 20, Item 21

New/Unproven Franchise System

Medium Risk

Explanation

Painter Bros is a relatively new and rapidly growing franchise system. While the business concept has been operating longer, the franchise support systems are still young and being tested by recent, rapid expansion. This presents a higher level of risk compared to a mature system, as the long-term profitability and success for a large number of franchisees has not yet been established. The limited one-year performance data in Item 19 reflects this.

Potential Mitigations

  • A business advisor can help you conduct extensive due diligence on the long-term viability of the business model.
  • Engaging with the earliest available franchisees to discuss the evolution of the system and support is highly recommended.
  • Your accountant should help you build conservative financial models, given the limited historical performance data available for franchisees.
Citations: Item 1, Item 2, Item 19, Item 20, Item 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified. The market for professional painting services is a long-established and necessary trade, not a business model based on a short-term trend or fad. However, it is always wise to assess the long-term demand in your specific local market, as competition can be intense and economic conditions can affect demand for home and commercial improvement services.

Potential Mitigations

  • Engaging a business advisor to research the competitive landscape and demand for painting services in your specific territory is a valuable step.
  • An accountant can help you model how your business might perform during different economic cycles.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified. The key executives listed in Item 2 appear to have several years of experience both in the painting industry and with franchising. This experience can be a positive factor for a new franchisee. Still, it is always a good practice to understand the specific roles and responsibilities of the support team you will be working with directly.

Potential Mitigations

  • During your due diligence, asking to speak with the key operations and support personnel you'll be interacting with is recommended.
  • A business advisor can help you evaluate if the management team's specific skills align with the support you will need.
Citations: Not applicable

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD, as there is no indication that the franchisor is owned or controlled by a private equity firm. The franchise appears to be founder-led. This can be beneficial for long-term focus, but you should still understand the franchisor’s long-term goals for the company, including any potential future sale.

Potential Mitigations

  • It is always prudent to ask the franchisor about their long-term vision for the brand, including any plans for a future sale.
  • Your attorney should review the assignment clauses in the Franchise Agreement to understand your rights if the company is sold in the future.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified. The FDD states that the franchisor does not have a parent company. The relationship with an affiliate, Colors Are Us of Nevada, LLC, is disclosed. While this specific risk is absent, you should always ensure you understand the full corporate structure and the roles of any affiliated companies mentioned in the FDD.

Potential Mitigations

  • Your attorney can help you understand the relationship between the franchisor and any disclosed affiliates and the potential impact on your business.
  • An accountant's review of the financial statements in Item 21 can help assess the financial health of the disclosed franchisor entity itself.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified, as the FDD states that the franchisor has no predecessor entities to disclose. Therefore, there is no disclosed history of prior business structures, litigation, or bankruptcy under a different name for this same system. You are evaluating the track record of the current entity as presented.

Potential Mitigations

  • Your attorney should confirm that the information in Item 1 is complete and consistent with other parts of the FDD.
  • A business advisor can help you focus your due diligence on the operating history and track record of the current franchisor entity.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD. The franchisor reports no material litigation involving the company, its predecessors, or its management that would require disclosure in Item 3. The absence of significant lawsuits with franchisees or regulators is generally a positive indicator.

Potential Mitigations

  • It is still a good practice for your attorney to conduct an independent public records search for any litigation not disclosed in the FDD.
  • During your validation calls, you can ask current franchisees about their experiences with disputes and how the franchisor resolves them.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
6
2
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
3
4
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
4
5
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

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
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.

6

Regulatory & Compliance Risks

Total: 10
4
1
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.

7

Franchisor Support Risks

Total: 4
1
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.

8

Operational Control Risks

Total: 12
3
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.

9

Term & Exit Risks

Total: 18
8
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

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 2
0
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.