Pure Green
Initial Investment Range
$177,450 to $668,900
Franchise Fee
$47,500 to $215,000
The franchise that we offer is for Pure Green, a fast-casual franchised business that offers handcrafted and made-to-order superfood smoothies, acai and pitaya bowls as well as pre-bottled cold pressed juice.
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Pure Green April 14, 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
Pure Green Franchise Corp’s (Pure Green) audited financial statements reveal significant and recurring net losses, including a loss of over $1.3 million in 2024, following a $1 million loss in 2023. The balance sheet shows negative working capital, meaning current liabilities exceed current assets. The FDD explicitly flags the franchisor's financial condition as a special risk, indicating potential challenges in providing support and services, which could impact your business's stability and growth prospects.
Potential Mitigations
- Your accountant must conduct a thorough analysis of the franchisor's financial statements, including footnotes and cash flow statements, to assess its long-term viability.
- Discuss the franchisor's plan to achieve profitability and the implications of its financial state for future support with your business advisor.
- It is critical that your attorney investigate if any financial assurance, such as a bond or escrow, is required by your state due to the franchisor's financial condition.
High Franchisee Turnover
Medium Risk
Explanation
Item 20 data reveals a consistent pattern of one franchise closure ('Ceased Operations for Other Reasons') in each of the last three years (2022, 2023, and 2024). While the absolute number is low, for a young and rapidly expanding system, this consistent churn could suggest underlying issues with franchisee profitability, site selection, or operational challenges. The system is growing fast, but not all locations that open appear to remain in operation.
Potential Mitigations
- Speaking with former franchisees listed in Exhibit H is crucial to understand why they left the system; your attorney can help prepare questions for these conversations.
- Your accountant should analyze the turnover rate in the context of the system's rapid growth to evaluate the overall health of the franchise network.
- Ask the franchisor directly for context on these closures to gauge the transparency and potential systemic problems.
Rapid System Growth
High Risk
Explanation
The franchise system is expanding very quickly, growing from 7 to 42 franchised outlets between 2022 and 2024, with 21 more projected to open. This rapid growth, combined with the franchisor’s consistent net losses as shown in Item 21, raises concerns. There's a risk that Pure Green's support infrastructure for training, site selection, and operations may not be able to keep pace, potentially leading to inadequate assistance for you and other new franchisees.
Potential Mitigations
- It is important to ask the franchisor for specific details about how they are scaling their support staff and systems to manage this rapid expansion.
- In discussions with your business advisor, carefully evaluate if the franchisor has sufficient capital and personnel to adequately support all its franchisees.
- Contacting a wide range of existing franchisees, both new and established, can provide insight into the current quality of franchisor support.
New/Unproven Franchise System
High Risk
Explanation
Pure Green began franchising in late 2019 and is therefore a relatively new and emerging franchise system. While its affiliates have operated similar stores since 2016, the franchise model itself is unproven over the long term. This newness, combined with consistent financial losses and a rapidly expanding unit count, presents a higher level of risk regarding the sustainability of the business model, the effectiveness of its systems, and its ability to provide consistent long-term support.
Potential Mitigations
- A business advisor can help you conduct extensive due diligence on the long-term viability of the brand and its market position.
- Your accountant should thoroughly scrutinize the financial models, especially given the franchisor's limited operating history as a franchise system.
- Negotiating more protective terms with your attorney may be possible to help offset the heightened risks associated with a newer system.
Possible Fad Business
Medium Risk
Explanation
The business operates in the health-conscious, fast-casual market, focusing on trendy products like acai bowls and cold-pressed juices. While popular, this market can be susceptible to rapidly changing dietary trends and consumer preferences. There is a risk that the core product offering could be a fad with limited long-term, mainstream appeal. Your success is tied to the brand's ability to adapt and remain relevant if and when current health trends evolve.
Potential Mitigations
- Engage a business advisor to research the long-term market projections for this specific food and beverage segment.
- Question the franchisor about their strategy for product innovation and adaptation to evolving consumer tastes.
- Carefully consider the business's resilience to economic downturns and shifts in health trends with your financial advisor.
Inexperienced Management
Medium Risk
Explanation
While the CEO and VP have been with the brand since 2016, a number of other key management personnel listed in Item 2 have only been with Pure Green since 2023 or 2024. For a young franchise system undergoing rapid expansion, this recent hiring of senior staff could indicate a management team that is still solidifying its structure and experience in managing a large franchise network. This could potentially affect the consistency and quality of support.
Potential Mitigations
- A business advisor can help you research the past performance and experience of the key executives, especially in the franchising industry.
- When speaking with current franchisees, specifically inquire about their interactions with the management team and the quality of strategic leadership.
- Discuss any concerns about management's experience level directly with the franchisor.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Private equity ownership can be a risk if the firm prioritizes short-term returns over the long-term health of the franchise system. This can sometimes lead to reduced support, increased fees, or pressure to cut costs in ways that may harm franchisee profitability. It is important to understand the ownership structure of any franchisor.
Potential Mitigations
- Investigating the franchisor’s ownership structure is a key due diligence step that your attorney can assist with.
- If a private equity firm is involved, a business advisor can help you research the firm's history with other franchise brands.
- Discussing any ownership changes with existing franchisees can provide valuable insight into the operational impact.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. A parent company's influence can be a significant risk if it is not disclosed, especially if the franchisor is a thinly capitalized subsidiary. The parent's financial health and any guarantees it provides are material facts. The FTC Rule requires disclosure of parent companies and, in certain circumstances, their financial statements, to provide a complete picture of the franchise system's backing.
Potential Mitigations
- Your attorney should review Item 1 and Item 21 to confirm if a parent entity exists and if its financials are required and provided.
- If a parent company guarantee is mentioned in the documents, an accountant's review of the parent's financial strength is advisable.
- Asking the franchisor to clarify its full corporate structure can help ensure all relevant entities are known.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package, as Item 1 states that Pure Green has not had any predecessors in the past 10 years. When a franchisor has a predecessor, it is important to scrutinize the predecessor's history for issues like litigation, bankruptcy, or high franchisee turnover. These could indicate inherited systemic problems that might affect the current franchise system and your potential investment.
Potential Mitigations
- When a predecessor is disclosed, your attorney should carefully examine their history in Items 1, 3, and 4.
- Independent research into a predecessor's business reputation can be conducted with the help of a business advisor.
- Speaking with long-term franchisees who operated under the predecessor can provide valuable historical context.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package. Item 3 indicates that no litigation history is required to be disclosed. A pattern of lawsuits, particularly those initiated by franchisees alleging fraud or misrepresentation, can be a major red flag about the franchisor's practices. Conversely, a high number of lawsuits initiated by the franchisor against franchisees might suggest an overly aggressive or litigious culture, which can be difficult for franchisees to navigate.
Potential Mitigations
- A thorough review of Item 3 by your franchise attorney is a critical step in any FDD analysis.
- Your attorney can also conduct independent searches for litigation that may not have met the disclosure threshold but could still be relevant.
- Discussing any disclosed litigation with current and former franchisees can provide important context beyond the FDD summary.
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
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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
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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