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Plumbing Paramedics

PHP Franchise, LLC
https://theplumbingparamedics.com
1-888-453-9412
17700 Saint Clair Avenue, Cleveland, Ohio 44110

How much does Plumbing Paramedics cost?

Initial Investment Range

$124,375 to $309,000

Franchise Fee

$40,000

As a Plumbing Paramedics franchisee, you will operate a business providing residential plumbing and related services approved by the Franchisor.

Enjoy our partial free risk analysis below

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Plumbing Paramedics April 29, 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
4
2
4

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The audited financial statements for the parent company, which guarantees performance, show significant, recurring net losses for the past three years, including over $13 million in 2024. This pattern raises serious questions about the guarantor's long-term financial health and its ability to provide the promised support and investment for the franchise system. Your success is directly linked to the franchisor's financial stability.

Potential Mitigations

  • An experienced franchise accountant should analyze the parent company's financials to assess its viability and the practical value of its guarantee.
  • A discussion with your business advisor about the company's strategy for achieving profitability and funding franchisee support is critical.
  • Your attorney should be consulted to confirm the enforceability of the parent company guarantee.
Citations: Item 1, Item 21, FDD Exhibit B

High Franchisee Turnover

High Risk

Explanation

The data in Item 20 reveals a franchisee termination rate of 20% in the most recent fiscal year, based on one termination from a small starting base of five units. While the absolute number is low, such a high percentage in a young system may be a red flag for potential issues with the business model, franchisee profitability, or overall satisfaction. This warrants further investigation.

Potential Mitigations

  • It is crucial to contact the former franchisee listed in Exhibit F to understand their experience and reasons for leaving the system.
  • With your business advisor, you should discuss this turnover rate with the franchisor to understand the specific circumstances.
  • Your attorney can help you formulate questions for former franchisees to gather the most useful information for your due diligence.
Citations: Item 20, FDD Exhibit F

Rapid System Growth

Medium Risk

Explanation

The system is expanding very quickly, growing from one to 15 franchised outlets in two years. When combined with the parent company's ongoing financial losses, this rapid growth creates a risk that the franchisor's support infrastructure, such as training and operational assistance, may not be able to keep pace. This could potentially leave you with inadequate support as the system scales.

Potential Mitigations

  • You should question the franchisor about their specific plans and resource allocation for scaling support systems to match unit growth.
  • Engaging a business advisor to assess the franchisor's capacity to support its expanding network can provide valuable perspective.
  • Speaking with both new and established franchisees can help you gauge the current quality and responsiveness of franchisor support.
Citations: Item 20, Item 21

New/Unproven Franchise System

High Risk

Explanation

The franchisor only began offering franchises in late 2021, making it a very new and relatively unproven system. This newness, combined with the parent company's significant financial losses and the recent high franchisee termination rate, elevates the investment risk. An unproven system may have underdeveloped operational processes and limited brand recognition, which could impact your business's initial success.

Potential Mitigations

  • Conducting extensive due diligence on the business model's viability with the help of a business advisor is essential.
  • Your accountant should perform a thorough review of the franchisor's capitalization and financial stability.
  • It is advisable to speak with the earliest franchisees in the system to learn about their experiences and challenges.
Citations: Item 1, Item 20, Item 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. Plumbing is a fundamental home service with consistent demand, not a business model based on a short-lived trend or fad. The long-term viability of the industry itself is generally considered stable, which reduces the risk of the entire business concept becoming obsolete quickly.

Potential Mitigations

  • A business advisor can help you research long-term market trends for home services in your specific area.
  • Your own analysis of the local market can confirm the sustained demand for plumbing services.
  • An accountant can help you model financial scenarios based on stable, rather than trend-driven, demand.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This specific risk appears low. While the franchisor entity itself is young, the management team detailed in Item 2 has extensive prior experience in franchising with other established brands, as well as experience within the private equity firm that owns the system. This background may help mitigate some of the typical risks associated with a new franchise company.

Potential Mitigations

  • A business advisor can help you vet the backgrounds of the key management personnel and their track records with other franchise systems.
  • You should still ask the franchisor how their past experience is being applied to build robust support for this new system.
  • In conversations with existing franchisees, you can inquire about their direct experiences with the management team's competence and accessibility.
Citations: Item 2

Private Equity Ownership

High Risk

Explanation

The franchisor is owned by The Riverside Company, a private equity firm. This ownership structure may introduce a focus on short-term financial returns, which could potentially lead to decisions that benefit investors over the long-term health of franchisees. This might manifest as reduced support to cut costs, pressure to use affiliated vendors, or a sale of the entire system.

Potential Mitigations

  • Researching the private equity firm's reputation and track record with other franchise brands they own or have owned is a prudent step.
  • A conversation with your attorney about the 'Assignment' clause in the franchise agreement is important to understand what happens if the system is sold.
  • A business advisor can help you assess how private equity ownership might influence the franchisor's strategic decisions.
Citations: Item 1, Item 21

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified. The FDD is transparent about its corporate structure, clearly identifying its immediate parent, Threshold Brands, LLC, and the ultimate parent entity, HS Group Holding Company, LLC. Furthermore, the FDD includes the parent's audited financial statements and a guarantee of performance, which provides a degree of transparency into the entity backing the franchisor.

Potential Mitigations

  • It is always good practice for your attorney to verify the corporate structure and the standing of the parent and franchisor entities.
  • Your accountant should review the provided parent company financial statements to assess the strength of the entity guaranteeing the franchisor's obligations.
  • Asking your attorney to confirm the terms of the parent guarantee is a wise step.
Citations: Not applicable

Predecessor History Issues

Medium Risk

Explanation

Item 1 discloses a predecessor entity. While the FDD does not report any negative history such as litigation or bankruptcy related to this predecessor, the simple fact that you are investing in a system operated by a new corporate entity that is different from the original operator introduces a degree of risk. The track record is that of the brand, but not necessarily this specific franchisor company.

Potential Mitigations

  • Your business advisor can help you research the history of the brand under its predecessor, if possible.
  • It is wise to ask the franchisor to explain the reasons for the change in the corporate entity operating the franchise system.
  • Talking to long-term employees or franchisees who may have experience with the predecessor could provide valuable insight.
Citations: Item 1, Item 3, Item 4

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. Item 3 states that no litigation is required to be disclosed. This suggests there is not a history of significant legal disputes with franchisees, which is a positive indicator for a prospective franchisee. However, this should be confirmed during your due diligence calls.

Potential Mitigations

  • It is still advisable to ask current and former franchisees about their experiences and whether they are aware of any disputes.
  • A general online search for litigation involving the franchisor or its parent companies can be a useful due diligence step.
  • Your attorney can help you perform more formal searches for litigation history if you have concerns.
Citations: Not applicable
2

Disclosure & Representation Risks

Total: 15
3
1
11

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
4
6
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.

4

Legal & Contract Risks

Total: 16
4
8
4

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
3
1
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
4
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.

7

Franchisor Support Risks

Total: 4
1
3
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.

8

Operational Control Risks

Total: 12
3
5
4

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
7
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.

10

Miscellaneous Risks

Total: 2
2
0
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.