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How much does Pilar Coffee Bar & Iced Treats cost?
Initial Investment Range
$59,500 to $1,175,000
Franchise Fee
$50,000 to $83,000
We offer qualified individuals and entities a franchise for the right to independently own and operate a restaurant offering coffee beverages, freshly prepared bakery items and alcohol infused ice treats as well as any other items that we authorize.
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Pilar Coffee Bar & Iced Treats February 25, 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, Pilar Operations, LLC (Pilar), has significant financial weaknesses. The audited financial statements for the year ending December 31, 2024, show a net loss of over $73,000 on zero revenues and a negative members' equity (net worth) of over $259,000. This financial condition is explicitly noted as a special risk, raising questions about the company's ability to provide support and remain a going concern without income from new franchise sales.
Potential Mitigations
- Your accountant must conduct a thorough analysis of the financial statements, including the notes, to assess the franchisor's solvency and reliance on franchise fees.
- It is crucial to have your attorney investigate if any financial assurances, like a bond or escrow, are required by your state due to this financial condition.
- A business advisor can help you evaluate if the franchisor has sufficient capital to fulfill its support obligations without depending on your fees.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified as the franchise system is new and has no operating history. Item 20 tables show zero transfers, terminations, or non-renewals because no unit franchises have yet operated. The absence of data means you cannot assess historical franchisee satisfaction or unit success rates, which is an inherent risk in joining an unproven system. You will be among the first to establish a performance track record.
Potential Mitigations
- With a business advisor, you should scrutinize the franchisor's business plan and projections for supporting its initial franchisees.
- Consulting with your attorney about negotiating stronger contractual protections and support commitments is advisable given the lack of a performance history.
- It is important to have your accountant help you create conservative financial projections with higher contingency funds due to the unproven nature of the system.
New/Unproven Franchise System
High Risk
Explanation
Pilar has limited operational history, having been formed in July 2023 and starting to offer franchises in August 2023. As of the FDD issue date, there are no open and operating franchised or company-owned Pilar locations. Investing in a new system carries higher risk as the business model, brand recognition, and support infrastructure are unproven in the marketplace. The franchisor explicitly flags its short operating history as a special risk to consider.
Potential Mitigations
- Engaging a business advisor to perform deep due diligence on the backgrounds and track records of the franchisor's principals is essential.
- Your accountant should verify that you have sufficient reserve capital to navigate the uncertainties of being one of the first franchisees.
- Your attorney can help you understand the risks associated with an emerging brand that has no operating track record.
Pattern of Litigation
High Risk
Explanation
Pilar's principals and affiliates have been involved in an extensive and concerning amount of litigation related to their other franchise brands. Disclosures in Item 3 include numerous franchisee lawsuits alleging fraud, misrepresentation, and franchise law violations. Additionally, affiliates have faced regulatory actions from states like Indiana and California for FDD deficiencies. This history suggests a potential pattern of disputes and conflict with franchisees that could extend to this new brand.
Potential Mitigations
- A thorough review of every litigation case disclosed in Item 3 with your franchise attorney is critical to understand the nature of the allegations.
- Your attorney can help you conduct independent research on these cases to see if there are patterns of behavior across the principals' various companies.
- A business advisor should help you weigh the risk of entering a relationship with management that has a documented history of significant franchisee disputes.
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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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