Pickleball Kingdom
Initial Investment Range
$940,000 to $2,347,600
Franchise Fee
$60,000 to $150,000
The franchise is for the establishment and operation of an indoor pickleball facility offering pickleball lessons, leagues, clinics and pick-up games with multiple membership offerings for players of all skill levels.
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Pickleball Kingdom April 14, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor's audited financial statements for the year ending December 31, 2024, reveal a significant negative net worth of nearly $6 million and a substantial operating loss. These figures, combined with state-mandated deferrals of your initial fees due to this financial condition, raise serious questions about the franchisor's financial stability and its ability to provide long-term support. The company's large distributions to members despite these losses could be a further concern for you.
Potential Mitigations
- An experienced franchise accountant must thoroughly analyze the franchisor's financial statements, including footnotes, to assess its viability and reliance on new franchise sales.
- Discuss with your franchise attorney the implications of the state-mandated fee deferrals and what protections they actually provide.
- Engaging a business advisor to question the franchisor about its plan to achieve profitability and fund its support obligations is essential.
High Franchisee Turnover
Low Risk
Explanation
The FDD does not indicate a history of high franchisee turnover, primarily because the franchise system is very new and has limited operating history with franchised units. This lack of historical data means future stability is unproven. Generally, high turnover rates in a mature system can signal franchisee dissatisfaction, lack of profitability, or poor franchisor support, so this is a key metric to watch in the future for any franchise.
Potential Mitigations
- When conducting due diligence, it is important to ask current franchisees about their satisfaction and future intentions, which a business advisor can help facilitate.
- Your attorney should help you understand the termination and renewal clauses to know the conditions under which you or the franchisor can end the relationship.
- An accountant can help you model profitability to assess factors that could lead to failure and turnover.
Rapid System Growth
High Risk
Explanation
The franchisor has sold a large number of franchises (61 agreements signed) in a very short period, as shown in Item 20. This rapid expansion, for a new company with limited resources and concerning financials, creates a significant risk that the franchisor may be unable to provide adequate training, site selection assistance, and ongoing support to all its new franchisees. This could directly impact your ability to successfully open and operate your business.
Potential Mitigations
- It is crucial to question the franchisor's management about their specific plans and resources for scaling their support infrastructure, a topic a business advisor can help you explore.
- Contacting franchisees who have recently opened or are in the development pipeline to inquire about the quality and timeliness of support is recommended.
- Your accountant should review the franchisor's financials to independently assess if it has the cash flow and capitalization to support this rapid growth.
New/Unproven Franchise System
High Risk
Explanation
The franchisor is a new company with a very limited operating history, as disclosed in Items 1 and 20 and highlighted as a "Special Risk." You are investing in an unproven system with minimal brand recognition and untested franchisee support structures. This significantly increases the risk of operational challenges and potential business failure compared to investing in a well-established franchise with a long, successful track record.
Potential Mitigations
- A business advisor should help you conduct extensive due diligence on the founders' and management's direct experience in both the pickleball industry and in managing a franchise system.
- Engage your attorney to negotiate for more franchisee-favorable terms in the agreement to compensate for the higher risk of an emerging brand.
- Consult with your accountant to develop conservative financial projections, as there is no reliable, long-term performance data available.
Possible Fad Business
Medium Risk
Explanation
The business model is centered on pickleball, a sport experiencing extremely rapid, trend-like growth. While popular now, there is a risk that interest could wane or the market could become oversaturated with competitors, as noted in Item 1. Given the high initial investment required for a specialized facility, your business could be vulnerable if the current explosive growth proves to be a short-term fad, potentially impacting long-term viability and your return on investment.
Potential Mitigations
- With a business advisor, conduct independent market research on the long-term sustainability of dedicated pickleball facilities in your specific area.
- Your accountant should help you develop financial models that stress-test profitability scenarios based on varying levels of consumer demand and membership.
- Discuss the franchisor's strategies for innovation and adapting the business model should the sport's popularity change.
Inexperienced Management
Medium Risk
Explanation
The franchisor’s founder and CEO does not appear to have prior experience managing a franchise system, according to Item 2. While the company has hired a President with significant franchising experience, the lack of such experience at the very top could present risks related to strategic direction and support. A new system led by a founder new to franchising may face a steeper learning curve in providing effective support to franchisees like you.
Potential Mitigations
- It is important to understand the specific roles and influence of the CEO versus the President in day-to-day operations and franchisee support; a business advisor can help.
- When speaking with franchisees, inquire specifically about the quality of support and the accessibility of experienced management.
- Your attorney should review the franchisor's support obligations in the agreement to ensure they are clearly defined and not solely discretionary.
Private Equity Ownership
Low Risk
Explanation
The FDD does not indicate that the franchisor is owned or controlled by a private equity firm. When a franchisor is PE-owned, there can be a risk that decisions prioritize short-term investor returns over the long-term health of franchisees. This does not appear to be a factor in this offering based on the documents provided.
Potential Mitigations
- During due diligence, it's always wise to ask about the long-term ownership vision for the company, a discussion to have with a business advisor.
- Your attorney can help you understand the franchisor's rights to sell or assign the franchise system to any third party, including a PE firm, in the future.
- Your accountant can help analyze the company's financial structure for any signs of debt or ownership arrangements typical of PE involvement.
Non-Disclosure of Parent Company
High Risk
Explanation
The franchisor discloses a parent and key affiliates, including the entity that holds the trademark rights. However, the FDD does not include financial statements for these related companies. Given the franchisor's own precarious financial condition, the financial health of these other entities is critical to understanding the overall stability and backing of the system you are joining. Without this information, you face unknown risks regarding the system's true viability.
Potential Mitigations
- Your franchise attorney should inquire why the parent and key affiliate financial statements were not included, as they may be required under franchise law.
- An accountant must assess the franchisor's ability to survive without financial support from its parent or affiliates.
- It is important to ask your attorney to review the Intercompany License agreement mentioned in Item 13 to understand the terms of the IP license.
Predecessor History Issues
Low Risk
Explanation
The franchisor states in Item 1 that it has no predecessors. This means it has not acquired the business system from another company. Therefore, risks associated with a negative or undisclosed history from a prior operator of the brand do not appear to be present in this offering.
Potential Mitigations
- Your attorney can verify the corporate history of the franchisor and its affiliates to confirm the "no predecessor" statement.
- A business advisor can help you research the history of the key individuals in Item 2 to see if they were associated with other, similar businesses.
- Always focus due diligence on the current entity's performance and stability, a task for your accountant.
Pattern of Litigation
Low Risk
Explanation
The FDD discloses in Item 3 that there is no litigation history that requires disclosure. This is a positive sign, as a pattern of lawsuits, particularly those initiated by franchisees alleging fraud or misrepresentation, can be a major red flag indicating systemic problems within a franchise.
Potential Mitigations
- Your attorney can conduct independent public record searches to verify the absence of significant litigation involving the franchisor or its principals.
- It's still valuable to ask current franchisees about any disputes or disagreements they are aware of within the system.
- Always review the dispute resolution clauses in the Franchise Agreement with your attorney to understand your rights if a conflict arises in the future.
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
Unlock Full Risk Analysis
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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
Unlock Full Risk Analysis
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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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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