QC Kinetix Logo

QC Kinetix

QC Franchise Group LLC
https://www.qcfranchise.com
1-800-269-1421
227 W. Trade Street, Suite 2160, Charlotte, NC 28202

Initial Investment Range

$250,100 to $785,080

Franchise Fee

$55,000 to $135,000

The franchise offered is for the operation of a franchised QC Kinetix® business that, through the use of licensed medical providers, provides non-surgical regenerative medicine services using QC Kinetix® system.

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QC Kinetix May 1, 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.

1

Franchisor Stability Risks

Start Here
Total: 10
4
4
2

Disclosure of Franchisor's Financial Instability

Medium Risk

Explanation

The franchisor’s audited financial statements show profitability. However, this financial performance appears heavily dependent on sales to franchisees. In 2023, over 57% of QC Franchise Group LLC (QCFG)'s total revenue came from required equipment, supply, and service sales to you, not from royalties on your sales to the public. This may indicate a risk if the business model's sustainability relies more on franchisee investment than on franchisee success.

Potential Mitigations

  • Your accountant must analyze the franchisor's financial statements, paying close attention to the sources of revenue and cash flow.
  • A thorough discussion with your financial advisor is necessary to evaluate the risks of a franchise system that derives a majority of its revenue from selling goods and services to its franchisees.
  • Ask your attorney to clarify any financial obligations guaranteed by a parent company, if any are mentioned in the disclosure.
Citations: Items 8, 21, Exhibit H

High Franchisee Turnover

High Risk

Explanation

Item 20 data for 2023 indicates a potentially high franchisee turnover rate. The data shows 19 terminations and 2 franchisor reacquisitions out of 159 outlets at the start of the year, an approximate 13.2% churn rate. Such a figure may suggest underlying issues within the system, such as unprofitability, franchisee dissatisfaction, or other systemic challenges. Exhibit G lists 13 former owner groups who terminated their agreements in 2023.

Potential Mitigations

  • It is critical to contact a significant number of former franchisees listed in Exhibit G to understand their reasons for leaving the system.
  • A detailed analysis of the Item 20 tables with your accountant is needed to calculate and understand the turnover rates over the past three years.
  • Your attorney should help you formulate questions for the franchisor regarding the specific circumstances of these terminations and reacquisitions.
Citations: Item 20, Exhibit G

Rapid System Growth

High Risk

Explanation

The system has experienced hyper-growth, expanding from 0 to 182 franchised units in just three years (2021-2023). While growth can be positive, such rapid expansion may strain the franchisor's ability to provide adequate site selection, training, and ongoing operational support to all franchisees. The high turnover rate noted in Item 20 could be an indicator that support systems have not kept pace with the rate of sales.

Potential Mitigations

  • Question the franchisor about their specific plans and resources for scaling their support staff and infrastructure to match the rapid unit growth.
  • Engaging a business advisor to assess the franchisor's capacity to support its large network would be beneficial.
  • Discuss the quality and timeliness of support with a wide range of existing franchisees, from the newest to the most established.
Citations: Item 20

New/Unproven Franchise System

High Risk

Explanation

QCFG began offering franchises in December 2020, making this a very new system. An early-stage franchise carries inherent risks, including an unproven long-term business model, potentially underdeveloped support systems, and minimal brand recognition. The high franchisee turnover and pending litigation disclosed in Items 20 and 3 may underscore the challenges associated with investing in a system that is still in its formative years.

Potential Mitigations

  • A business advisor can help you conduct extensive due diligence on the track record and specific industry and franchising experience of the management team.
  • It is essential to speak with some of the earliest franchisees to learn about their experiences and the system's evolution.
  • Your attorney might be able to negotiate more favorable or protective terms to compensate for the higher risks of a new system.
Citations: Items 1, 2, 20, 21

Possible Fad Business

Medium Risk

Explanation

The business operates in the non-surgical regenerative medicine sector, a relatively new and evolving industry. You should consider the risk that the specific treatments and business model could be tied to current trends that may not have long-term, sustained consumer demand. A decline in public interest or the emergence of more effective or less expensive alternative treatments could significantly impact the business's viability, while your long-term contractual obligations would remain.

Potential Mitigations

  • Engage a business advisor to research the long-term market trends and competitive landscape for regenerative medicine services.
  • It is important to evaluate the franchisor's commitment to research and development for new services to adapt to market changes.
  • Discuss the sustainability of the business model with your financial advisor, considering its resilience to shifts in consumer preference or economic conditions.
Citations: Items 1, 11

Inexperienced Management

Medium Risk

Explanation

While some members of the management team have franchising experience, the franchisor entity itself is very new, having been formed in 2020. The challenge of managing a system that has grown to over 180 units in three years is substantial. The high turnover rate and pending litigation could suggest that the management team's experience may not have fully prepared them for the complexities of supporting such a large and rapidly-grown network.

Potential Mitigations

  • With a business advisor, you should thoroughly vet the backgrounds of all key executives, focusing on their experience in managing large-scale franchise systems.
  • It is crucial to speak with current franchisees about their direct experiences with the quality and effectiveness of management's support and strategic direction.
  • Your accountant should review the franchisor's financials in Item 21 to assess if adequate funds are being invested in support infrastructure versus sales.
Citations: Items 1, 2, 11

Private Equity Ownership

Low Risk

Explanation

This risk, where a franchisor is owned by a private equity firm, was not identified in the FDD. Private equity ownership can sometimes lead to decisions that prioritize short-term returns over the long-term health of the system. This can manifest as increased fees, reduced franchisee support, or pressure to use affiliated vendors. Because this was not found, it is not a direct risk in this FDD package.

Potential Mitigations

  • An attorney can help you understand the current ownership structure detailed in Item 1 and any rights the franchisor has to sell the system.
  • It is wise to periodically ask the franchisor about any potential changes in ownership.
  • A business advisor can help you research the reputation of any potential future institutional owner.
Citations: Not applicable

Non-Disclosure of Parent Company

Medium Risk

Explanation

The franchisor, QC Franchise Group LLC, is a distinct entity from its various affiliates, some of which are required suppliers or hold the trademarks. The FDD provides financial statements for QC Franchise Group LLC but does not include financials for the parent or other affiliate companies. While this may be compliant, it means your view of the entire enterprise's financial health is incomplete, which could mask risks if those other entities face instability.

Potential Mitigations

  • Your attorney and accountant should review the complex web of affiliated entities described in Item 1 to understand their roles and your dependencies on them.
  • It's important to ask the franchisor about the financial health of its key affiliates, especially those who are designated as mandatory suppliers.
  • A business advisor can help you understand the potential risks of dealing with a franchise system that has a complicated corporate structure.
Citations: Items 1, 8, 21, Exhibit H

Predecessor History Issues

Low Risk

Explanation

The franchisor, QC Franchise Group LLC, was organized in 2020 and has no predecessors listed in Item 1. This means the risks are those associated with a new company and system, rather than risks inherited from a prior operator. Your due diligence should therefore focus on the current management team's experience and the performance of the system since its inception.

Potential Mitigations

  • Your attorney should confirm the corporate history as stated in Item 1.
  • Focus due diligence efforts on the performance of the franchise system since it began operating in 2020, as advised by your accountant.
  • Speak with the earliest-starting franchisees listed in Item 20 to understand the system's history from their perspective.
Citations: Item 1

Pattern of Litigation

High Risk

Explanation

Item 3 discloses two pending lawsuits against QCFG. One is a class action by a patient alleging consumer fraud related to advertising non-FDA approved treatments and arranging high-interest financing. Another is from a patient alleging fraud and misrepresentation regarding treatment effectiveness. This pattern of litigation related to the core business offering and its marketing suggests a significant risk of similar future claims, potential reputational damage, and high legal costs.

Potential Mitigations

  • A thorough review of the allegations and current status of the lawsuits in Item 3 with your franchise attorney is critical.
  • Discuss the potential impact of this litigation on the brand's reputation and your own potential liability with your attorney.
  • Your insurance broker should be consulted to ensure your proposed insurance coverage is adequate to address these types of claims.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
6
4
5

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
5
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

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4

Legal & Contract Risks

Total: 16
8
5
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.

5

Territory & Competition Risks

Total: 5
4
1
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.

6

Regulatory & Compliance Risks

Total: 10
6
2
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
2
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.

8

Operational Control Risks

Total: 12
6
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.

9

Term & Exit Risks

Total: 18
10
7
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.

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.