Pizzawala’s
Initial Investment Range
$376,000 to $639,000
Franchise Fee
$25,000
Your Restaurant will be a fast-casual Restaurant that features carry out with a wide variety of menu items, specializing in fusion pizzas, predominantly Indian-inspired, from local sources, with superior customer service to its clients.
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Pizzawala’s June 19, 2024 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
Pizzawala's Franchising, Inc. (PFI) explicitly flags its own weak financial condition as a special risk. The 2023 audited financials confirm this, showing an operating loss, negative retained earnings, and very low net worth. A significant portion of its assets is a loan to a related party in India. This financial weakness calls into question the company’s ability to provide support, grow the brand, or even remain a going concern, posing a direct risk to your investment.
Potential Mitigations
- An experienced franchise accountant must thoroughly review all financial statements, including footnotes about the large related-party loan.
- Your attorney should investigate if the franchisor has posted any required bonds or escrow accounts in your state due to this financial weakness.
- Engaging a business advisor to assess if PFI can fulfill its support obligations without relying on new franchise fee sales is critical.
High Franchisee Turnover
Low Risk
Explanation
The FDD does not indicate high franchisee turnover. Item 20 tables show a very small, young system with one new franchised unit in 2023 and no terminations, non-renewals, or other cessations over the past three years. While currently low, turnover is a key metric to monitor as the system grows because high rates can signal systemic problems like unprofitability or poor support, creating risk for you.
Potential Mitigations
- As the system grows, your accountant can help you analyze future FDDs to track turnover rates against the system's size.
- It is wise to have your attorney help you ask existing franchisees about their satisfaction and profitability to gauge future stability.
- A business advisor can help you compare system trends to industry benchmarks for similar fast-casual concepts.
Rapid System Growth
Medium Risk
Explanation
The system is very young and small but is planning for growth, with three agreements signed and four new outlets projected for the next year. While growth is a positive sign, rapid expansion can strain a franchisor's resources. Given the weak financial position disclosed in Item 21, there is a risk that PFI's support infrastructure for training, site selection, and operations may not keep pace with the number of new franchisees, potentially affecting the quality of support you receive.
Potential Mitigations
- Questioning PFI directly about its plans for scaling support infrastructure to match planned growth is a discussion to have with your business advisor.
- An accountant's review of PFI's financial statements is essential to assess if they possess the resources needed to support this expansion.
- Speaking with the other new and existing franchisees about the current quality and responsiveness of franchisor support is a key due diligence step.
New/Unproven Franchise System
High Risk
Explanation
PFI is a very new franchisor, having started offering franchises in July 2020 with only two franchised units open as of the end of 2023. While its management has experience with an affiliate franchise, this specific Pizzawala's system is unproven on a larger scale. This introduces risks such as an underdeveloped support system, minimal brand recognition, and a business model that is not yet validated by a large, independent franchisee base, which could affect your potential for success.
Potential Mitigations
- Conducting extensive due diligence on the management's specific track record in this food sector is a task for your business advisor.
- Your accountant should perform a detailed analysis of the Item 19 FPR and the franchisor's financials in Item 21 to gauge viability.
- Speaking with the few existing franchisees is critical to understand their early experiences and the reality of the support provided.
Possible Fad Business
Medium Risk
Explanation
The business concept centers on Indian-inspired fusion pizza, which targets a niche market. While potentially unique, there is a risk that such a specific concept could be a short-term trend rather than a business with long-term, sustainable consumer demand. If market tastes shift, you could be left with a business that is difficult to adapt, while still being bound by the long-term franchise agreement. Your success depends on the lasting appeal of this specific culinary fusion.
Potential Mitigations
- A business advisor can help you conduct independent market research in your area to assess the long-term demand for this specific type of fusion cuisine.
- You should evaluate PFI's plans for menu innovation and adaptation beyond the current core concept to ensure it can evolve with consumer tastes.
- Discussing the concept's resilience to economic shifts and changing food trends with a financial advisor is a prudent step.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD package. Item 2 indicates that the key executives have been involved with an affiliated franchise system, Neehee's®, since 2012, suggesting they have experience in both the restaurant industry and in franchising. However, it's generally important to verify that management's experience is directly relevant to the success of the specific franchise concept being offered, as inexperience can lead to poor support and strategic errors.
Potential Mitigations
- A thorough vetting of the management team's specific roles and successes in their prior franchise experience should be conducted with your business advisor.
- It is wise to ask existing franchisees about their direct experiences with the management team's competence and support.
- Your attorney can help you research the track record of the affiliate franchise system, Neehee's®, to gauge management's capabilities.
Private Equity Ownership
Low Risk
Explanation
The FDD does not indicate that PFI is owned by a private equity firm. This is generally a positive, as such ownership can sometimes lead to a focus on short-term profits over the long-term health of the franchise system and its franchisees. It's always important for you to understand the franchisor's ownership structure as it can influence strategic decisions, fee structures, and the overall franchisor-franchisee relationship.
Potential Mitigations
- It's good practice to confirm the ownership structure with the franchisor directly.
- Your attorney can review Item 1 and corporate documents to verify that there are no undisclosed controlling entities like a PE firm.
- A business advisor can help you assess the implications of any ownership structure on the franchisor's long-term strategy.
Non-Disclosure of Parent Company
Medium Risk
Explanation
PFI does not have a parent company. It has several affiliates, including Nihi Distributing, Inc., which is a designated supplier, and Desi Pizza Curry on Crust, Inc., which operates a similar restaurant. All affiliates appear to be controlled by the same principals as the franchisor. The lack of a financially strong parent company to provide backing is a risk, especially given PFI's weak financial condition as shown in Item 21.
Potential Mitigations
- Your accountant should carefully review the financials of PFI and understand its dependency on related affiliate companies.
- The absence of a strong parent company guarantee means the franchisor's performance relies solely on its own limited resources, a risk to discuss with your financial advisor.
- Your attorney can help clarify the legal and financial relationships between PFI and its various affiliates.
Predecessor History Issues
Low Risk
Explanation
The FDD package does not indicate any predecessor history for PFI. Item 1 states clearly, "We have no predecessors." This means the company's history is its own since its 2019 formation. When a franchisor does have predecessors, it is critical to review their history for any signs of trouble, such as litigation, bankruptcy, or high franchisee turnover, as these issues could be inherited by the current franchisor.
Potential Mitigations
- While not applicable here, having your attorney review Item 1 of any FDD for predecessor information is a crucial due diligence step.
- A business advisor can help research a predecessor's history for any undisclosed issues or patterns of franchisee complaints.
- Always ask long-term franchisees about their experiences under any previous ownership, if applicable.
Pattern of Litigation
Low Risk
Explanation
Item 3 of the FDD states, "No litigation is required to be disclosed in this Item." The absence of a pattern of litigation, particularly franchisee-initiated lawsuits alleging fraud or misrepresentation, is a positive sign. However, as a very young system, there has been limited time for such disputes to arise. A pattern of litigation against a franchisor can be a major red flag indicating systemic problems or a contentious relationship with franchisees.
Potential Mitigations
- It is always prudent to have your attorney conduct an independent public records search for litigation not disclosed in Item 3.
- You should still ask existing franchisees about their relationship with the franchisor and if they are aware of any disputes.
- A business advisor can help you monitor this area in future FDDs as the system matures.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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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