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How much does Peri Peri Original or Kallisto Steakhouse cost?
Initial Investment Range
$242,000 to $787,000
Franchise Fee
$32,500 to $96,000
As a Peri Peri Original or Kallisto Steakhouse franchisee, you will operate a restaurant offering Peri Peri Grilled Chicken, Burgers, Sandwiches, Wraps, and more.
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Peri Peri Original or Kallisto Steakhouse February 24, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor, PPO Franchising Corp. (PPO), was only formed in November 2024 and has no operating history. Its financial statement in Item 21 shows only initial cash capitalization and no revenue streams besides the franchise fees it hopes to collect. This indicates a complete dependency on selling new franchises to fund operations and support you, which is a significant financial risk.
Potential Mitigations
- A franchise accountant must review these startup financials to assess the severe undercapitalization risk.
- Question the franchisor on their capitalization and future funding plans; your business advisor can help evaluate their viability.
- Understanding the franchisor's dependency on franchise sales for its survival is a key discussion to have with your attorney.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified as the franchisor is a startup with no operating franchises, as shown in Item 20. Therefore, there is no history of franchisee turnover. In an established system, high turnover can signal serious problems like unprofitability or poor franchisor support. Since this is a new system, there is no track record to evaluate.
Potential Mitigations
- Your business advisor should help you monitor the system's growth and future turnover rates if you proceed.
- An attorney can help you understand your rights if the system shows signs of distress in the future.
- Because this is a new system, speaking with the very first franchisees as they open will be critical for your due diligence.
Rapid System Growth
Low Risk
Explanation
This risk is not present as the franchise system has not yet opened any outlets. Rapid growth can strain a franchisor's ability to provide support. While not a current risk, if you join, it is important to monitor whether the franchisor's support infrastructure keeps pace with future unit growth.
Potential Mitigations
- Engage a business advisor to assess the franchisor's plans for scaling support services if they begin to sell franchises rapidly.
- An accountant can help you evaluate if the franchisor's future financial performance supports its growth.
- Your attorney should review the franchisor's contractual support obligations.
New/Unproven Franchise System
High Risk
Explanation
This is a new, unproven franchise system. PPO was formed in late 2024, has never operated a similar business, and had zero outlets as of the FDD date. This is explicitly disclosed as a "Short Operating History" risk. Investing in a startup franchise carries substantial risk due to the lack of a proven track record, established brand recognition, or tested support systems.
Potential Mitigations
- A business advisor's help is critical to evaluate the viability of this startup business model and the experience of its management.
- Your attorney should attempt to negotiate more franchisee-favorable terms to compensate for the higher risk.
- An accountant can help you develop highly conservative financial projections, as there is no operating history to rely upon.
Possible Fad Business
Low Risk
Explanation
This risk was not identified. The business model, based on peri-peri chicken, burgers, and sandwiches, involves established restaurant food categories rather than a concept that appears to be a short-term fad. The long-term viability will depend on execution and competition, not the transient nature of the core product itself.
Potential Mitigations
- A business advisor can help you analyze the local market competition for similar fast-casual restaurant concepts.
- Developing a strong local marketing plan with a marketing professional is key to building a sustainable customer base.
- Your accountant can help you model financial scenarios based on different levels of customer demand.
Inexperienced Management
High Risk
Explanation
The franchisor entity, PPO, has no experience operating a Peri Peri Original or Kallisto Steakhouse, as stated in Item 1. While its managers have experience in other ventures, the franchisor entity itself is new and unproven. This lack of direct corporate operating experience in the specific brand being franchised presents a significant risk to the quality of training, support, and operational guidance you will receive.
Potential Mitigations
- A thorough due diligence investigation into the past business ventures of the management team, assisted by your attorney, is critical.
- A business advisor can help you assess whether the disclosed management experience is relevant and sufficient for this new venture.
- Question the management team directly about their lack of experience operating this specific concept.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD. The franchisor does not appear to be owned by a private equity firm. Such ownership can sometimes lead to a focus on short-term returns over the long-term health of the franchise system.
Potential Mitigations
- Your attorney should always verify the ownership structure of the franchisor.
- Understanding the long-term goals of the franchisor's ownership is a key point to discuss with your business advisor.
- An accountant can review the financials for signs of aggressive, short-term financial engineering.
Non-Disclosure of Parent Company
Low Risk
Explanation
The franchisor states in Item 1 that it does not have a parent company. Therefore, risks associated with an undisclosed parent entity, such as hidden financial instability or conflicts of interest, are not applicable here.
Potential Mitigations
- An attorney can help verify the corporate structure and confirm the absence of a controlling parent entity.
- When a parent company does exist, your accountant should review its financial statements if they are provided or required.
- A business advisor can help assess the implications of a parent company's influence on the franchise system.
Predecessor History Issues
Low Risk
Explanation
The franchisor does not disclose any legal predecessors in Item 1. Therefore, risks from an undisclosed or problematic history of a predecessor entity are not directly applicable. However, you should carefully review the history of the franchisor's affiliates.
Potential Mitigations
- Your attorney should always confirm the business history of the franchisor and any named predecessors.
- When predecessors exist, it's crucial to research their litigation and bankruptcy history with help from an attorney.
- A business advisor can help you investigate the track record of any predecessor business.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses that the franchisor's affiliates are under pending investigation by securities and franchise regulators in both Maryland and Virginia. The investigations concern allegations of offering licenses without proper registration. This is a major red flag regarding the management's compliance with franchise law and could have serious negative implications for the franchisor and the entire system.
Potential Mitigations
- It is absolutely critical that your franchise attorney investigate the status and potential outcomes of these state regulatory investigations.
- A business advisor should help you assess the immense risk associated with a management team facing such serious allegations.
- You should ask your attorney to determine if these investigations could directly impact PPO or your own franchise.
Disclosure & Representation Risks
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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Financial & Fee Risks
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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Legal & Contract Risks
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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Territory & Competition Risks
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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Regulatory & Compliance Risks
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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Franchisor Support Risks
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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Operational Control Risks
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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Term & Exit Risks
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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Miscellaneous Risks
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