Premier Pools & Spas
Initial Investment Range
$58,950 to $119,000
Franchise Fee
$45,000
The franchise described in this disclosure document relates to the establishment and operation of a business to market, sell, and supervise the construction and remodeling of swimming pools and spas, using our proprietary System and using our Marks.
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Premier Pools & Spas March 31, 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 financial statements for Premier Franchise Management LLC (PFM LLC) show that a significant amount of cash (over $31 million in 2024) is held by its parent company as 'loans and advances to affiliates'. This treasury management arrangement suggests PFM LLC may have limited direct access to its operating cash, potentially making it dependent on its parent for liquidity. The financials also contain a material discrepancy between the cash balance on the Balance Sheet and the Statement of Cash Flows.
Potential Mitigations
- Your accountant must carefully review the consolidated and parent company financials, if available, to assess the overall enterprise's financial health.
- Discuss the implications of the inter-company loan structure and cash management policy with your financial advisor.
- Your attorney should inquire about the nature of the parent company's guarantee of PFM LLC’s obligations, if any.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a significant level of franchisee churn. In 2024, 19 franchises were terminated, representing approximately 15% of the outlets operating at the start of the year. Furthermore, Item 19 states that these 19 permanently closed franchises were excluded from the Financial Performance Representation. Such a high rate of turnover and exclusion from performance data may indicate systemic issues, franchisee dissatisfaction, or potential unprofitability within the system, presenting a substantial risk to your investment.
Potential Mitigations
- It is critical to contact a significant number of former franchisees from the list in Exhibit F to understand their reasons for leaving the system.
- Engaging a business advisor to analyze the turnover rates over the past three years can provide insight into system stability.
- Your accountant should consider the high turnover when evaluating the reliability of the Item 19 financial performance data.
Rapid System Growth
Medium Risk
Explanation
The franchisor's system has been growing, with a net increase in total outlets over the last three years. However, this growth is paired with a high number of terminations as noted in Item 20. Rapid growth combined with high franchisee churn could suggest that the franchisor's support systems may be strained, potentially impacting the quality of training, operational support, and overall assistance available to new franchisees like you.
Potential Mitigations
- Question the franchisor directly about their capacity and plans for scaling support infrastructure to match unit growth.
- Speaking with a range of existing franchisees about the current quality and responsiveness of franchisor support is a crucial due diligence step.
- A business advisor can help you assess whether the franchisor's support team and resources seem adequate for the system's size.
New/Unproven Franchise System
Low Risk
Explanation
This risk was not identified in the FDD package. The franchisor, PFM LLC, has been offering franchises since 2014, and its affiliate has history dating back to 2011, indicating an established presence. An unproven system would present higher risks due to untested operating models and support structures. However, the system's high litigation and turnover rates present separate, significant risks.
Potential Mitigations
- Even with a proven system, it is wise to have your business advisor help you conduct thorough due diligence on the management team's specific industry and franchising experience.
- Speaking with the earliest franchisees on the Item 20 list can provide valuable historical context on the system's evolution and support.
- An accountant should still review the financials to ensure the business model appears sustainable and well-capitalized.
Possible Fad Business
Low Risk
Explanation
This risk was not identified. The business of constructing and remodeling swimming pools is a long-established industry with consistent consumer demand, not typically considered a fad. Success will likely depend on local market conditions, competition, and your operational execution rather than the fleeting popularity of the concept itself.
Potential Mitigations
- A business advisor can help you assess the long-term market demand for pool construction in your specific territory.
- Reviewing the franchisor's plans for innovation and adaptation in Item 11 is still a valuable exercise with your attorney.
- Your financial advisor can help you consider the business model's resilience to economic downturns which can affect luxury purchases.
Inexperienced Management
Low Risk
Explanation
This risk was not identified. The key executives listed in Item 2, such as Paul Porter and Deborah Porter, appear to have extensive experience with this franchise system and its predecessors, dating back to 2011 or 2014. This long tenure suggests a deep familiarity with the business model, although it does not mitigate other identified risks such as litigation or high franchisee turnover.
Potential Mitigations
- It is still prudent to ask existing franchisees about their direct experiences with the management team's support and strategic direction.
- A business advisor can help you research the professional backgrounds of the key executives for a more complete picture.
- Your attorney can help you formulate questions for the franchisor about their management philosophy and long-term vision.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 indicates the franchisor is 100% owned by Premier Holdco LLC, but there is no disclosure that Premier Holdco is a private equity firm. Franchisees should be aware that ownership by a private equity firm can sometimes lead to a focus on short-term returns over the long-term health of the franchise system.
Potential Mitigations
- A business advisor can help you research the ownership structure of Premier Holdco LLC to confirm its nature.
- Asking the franchisor directly about their long-term strategy and any plans for a future sale of the company is a reasonable due diligence step.
- Your attorney should review the assignment clauses in the Franchise Agreement to understand what happens if the system is sold.
Non-Disclosure of Parent Company
Medium Risk
Explanation
The franchisor, PFM LLC, is disclosed as being owned by a parent company, Premier Holdco LLC. The parent company's financial statements are not provided. However, Note 4 to PFM LLC's financials explains that the parent manages cash for the system. While the parent is disclosed, the absence of its financial statements means you cannot fully assess the financial strength of the ultimate controlling entity, which appears to hold the majority of the system's cash.
Potential Mitigations
- Your accountant should analyze the provided financials and the parent company relationship described in the notes.
- In discussions with the franchisor, your attorney could inquire about the financial health of the parent and why its financials are not included.
- Understanding the legal relationship and any guarantees between the parent and the franchisor is a key task for your attorney.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified as being actively obscured. Item 1 discloses a predecessor, Premier Pools Management Corp. (PPMC), which offered licenses from 2011 to 2014. The FDD appears to properly disclose the predecessor's existence and history. However, a prospective franchisee should still investigate the predecessor's track record, as issues from that era could potentially carry over into the current franchise system.
Potential Mitigations
- Your attorney should carefully review all disclosures related to the predecessor in Items 1, 3, and 4.
- Asking long-term franchisees who may have converted from the predecessor's licensing model about their experience is a valuable step.
- A business advisor can help you research the predecessor's public record for any additional information.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses a very large number of lawsuits—over 30 cases—filed against PFM LLC and its franchisees. The majority are brought by customers alleging franchisee failure to perform, breach of contract, and fraud. Also notable are a case brought by a former franchisee alleging coercive practices and a regulatory action by the State of New York. This extensive litigation history is a major red flag, suggesting potential systemic problems with franchisee quality, training, or support, and indicates a high risk of being involved in legal disputes.
Potential Mitigations
- Your attorney must carefully review the nature, allegations, and outcomes of all listed lawsuits in Item 3.
- This pattern of litigation should be a primary topic of discussion with current and former franchisees to understand the root causes.
- Discussing the high volume of litigation with your insurance broker is critical to ensure you can obtain adequate liability coverage.
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
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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
Unlock Full Risk Analysis
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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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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