Power Wash Store
Initial Investment Range
$150,000 to $250,000
Franchise Fee
$80,000 to $150,000
The franchise offered by Power Wash Store, LLC is for the operation of retail and commercial stores that sell commercial, residential, agricultural, and industrial grade low pressure/soft washing equipment, high-pressure power washing appliances and equipment, supplies, parts, maintenance, and related products and services.
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Power Wash Store November 20, 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
The franchisor’s audited financials reveal several potential risks. The balance sheet shows low cash reserves and very high royalties receivable, suggesting difficulty collecting fees. A large receivable from an affiliate, which is also a mandatory supplier, indicates cash may be supporting the supplier rather than the franchise system. While profitable on paper, the company had negative net cash flow in 2023. These factors combined could indicate financial instability, impacting PWS's ability to support you.
Potential Mitigations
- Your accountant must conduct a deep analysis of the financial statements, focusing on cash flow, the high receivables, and the large advances to the related-party supplier.
- A business advisor can help you assess if the franchisor's financial condition is strong enough to provide promised support and withstand economic challenges.
- Ask your attorney to inquire about the collection status of outstanding royalties and the financial health of the mandatory supplier affiliate.
High Franchisee Turnover
High Risk
Explanation
The data in Item 20, Table 3 indicates a potentially high rate of franchisee failure. In 2023, one franchise ceased operations out of a starting base of eight, representing a 12.5% closure rate for the year. Another unit also ceased operations in 2021. This level of turnover could be a significant red flag, possibly pointing to systemic problems, franchisee dissatisfaction, or issues with the business model's profitability or sustainability that you should investigate thoroughly.
Potential Mitigations
- You should contact former franchisees listed in Exhibit D to understand firsthand why they left the system.
- A business advisor can help you analyze the turnover rates in Item 20 against industry benchmarks to gauge the severity of this issue.
- Discussing these closure numbers directly with the franchisor, with your attorney present, could provide additional context.
Slow or Stagnant System Growth
Medium Risk
Explanation
The system is relatively small, with only seven franchised outlets and one company-owned outlet operating at the end of 2023. While the franchisor began franchising in 2017, the slow growth and recent net decrease in franchised units could suggest challenges in attracting new franchisees or potential issues with the business model that may be inhibiting expansion. A smaller system might not have the resources for robust support or brand development.
Potential Mitigations
- A business advisor can help you assess whether the franchisor’s infrastructure is appropriate for its current size and any growth plans.
- Posing questions to the franchisor about their strategy for managing support services with a small but widespread network is a critical step.
- Your accountant should review the financials to determine if the system is financially viable at its current scale.
New/Unproven Franchise System
Medium Risk
Explanation
Power Wash Store, LLC (PWS) has been franchising since 2017 and has a very small number of active franchisees. The system has experienced limited growth and even a recent decline in the number of units. This lack of a substantial operating history and proven track record for the franchise system itself presents a higher risk. The success of a small number of units may not be representative of the opportunity, and the franchisor's support systems may be underdeveloped.
Potential Mitigations
- With your business advisor, you should conduct extensive due diligence, including speaking with all current and former franchisees if possible.
- Your attorney can help you scrutinize the experience of the management team outlined in Item 2, particularly in managing a franchise system.
- An accountant's review of the financials in Item 21 is critical to assess the viability and capitalization of this relatively new system.
Possible Fad Business
Low Risk
Explanation
This risk was not identified. A fad business is one tied to a short-lived trend, creating a risk that demand will disappear, leaving you with a worthless business and ongoing contractual obligations. Assessing a concept's long-term consumer demand and its ability to adapt is a key part of due diligence, as fads can be difficult to spot in the moment. It is important to look for evidence of sustained market relevance beyond current hype.
Potential Mitigations
- Your business advisor can help you research the industry to determine if the products and services have long-term, stable demand.
- Exploring the franchisor's plans for innovation, research, and development can provide insight into the business's potential longevity.
- An accountant can help you model the financial performance under various market scenarios, including a decline in current trends.
Inexperienced Management
Medium Risk
Explanation
While the President, Paul Kassander, has extensive experience in the power wash industry through an affiliate business dating back to 1993, the franchisor entity itself is relatively young, having started in 2017. The document does not detail a management team with broad experience in specifically managing and supporting a national franchise system. This could present risks related to the quality of franchisee support, training programs, and strategic growth, which differ from simply operating a business.
Potential Mitigations
- It is important to ask the franchisor about the specific franchising experience of their key support staff.
- Speaking with current franchisees about the quality and responsiveness of the management team and support systems is a key due diligence step.
- A business advisor can help you evaluate whether the current management structure seems adequate for supporting its franchisees effectively.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD. Item 1 does not indicate that the franchisor is owned by a private equity firm. When PE firms own franchisors, their typical goal of achieving a high return over a relatively short period (e.g., 3-7 years) can sometimes conflict with the long-term health of the franchise system and its individual franchisees. This can lead to strategies that prioritize short-term revenue over franchisee support and profitability.
Potential Mitigations
- Investigating the ownership structure of any franchise system is a wise step; your attorney can help research the parent companies.
- If a PE firm is involved, a business advisor can help you research their track record with other franchise brands they have owned.
- Engaging with franchisees who have been in the system before and after a PE acquisition can provide valuable insights.
Non-Disclosure of Parent/Affiliate Financials
High Risk
Explanation
The FDD discloses an affiliate, Mobi Clean, Inc. (MOBI), which owns and operates a company store and serves as a mandatory supplier for franchisees. However, the FDD for PWS does not include MOBI's financial statements. Given that PWS has made substantial advances to MOBI and franchisees are heavily reliant on it for purchasing inventory, the absence of MOBI's financials presents a significant information gap and risk. You cannot fully assess the financial health of your mandatory supplier.
Potential Mitigations
- Your attorney should inquire why the affiliate supplier's financial statements are not included, as they may be material to your investment decision.
- Requesting financial information for MOBI directly from the franchisor is a necessary step for your accountant to perform a complete risk assessment.
- A business advisor can help evaluate the risk of being dependent on a single supplier whose financial health is unknown.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified. Item 1 of the FDD does not mention any predecessors. When a franchisor acquires a business or its assets from a predecessor, it's important to understand the history of that prior entity. A prospective franchisee should look for any negative history, such as litigation, bankruptcy, or high franchisee turnover under the predecessor, as these issues could be inherited by the new franchisor and affect the health of the system.
Potential Mitigations
- Your attorney should always carefully review Item 1 for any mention of predecessors and their business history.
- If a predecessor is identified, speaking with long-term franchisees who operated under the previous ownership can provide valuable context.
- A business advisor can help you research the public records and reputation of any predecessor entity.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified. Item 3 of the FDD states that no litigation is required to be disclosed. This is a positive indicator, as a pattern of lawsuits, particularly those initiated by franchisees alleging fraud, misrepresentation, or breach of contract, can be a major red flag. It's also important to note a high volume of lawsuits initiated by the franchisor against franchisees, which could suggest an overly litigious or punitive culture.
Potential Mitigations
- It is still prudent to have your attorney conduct an independent search for litigation involving the franchisor or its principals, as not all disputes may meet the criteria for disclosure in Item 3.
- Discussing any past or pending legal issues with current and former franchisees can sometimes reveal disputes that are not listed in the FDD.
- Your attorney should review the dispute resolution clauses in the Franchise Agreement to understand the process if a conflict does arise.
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
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
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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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