Explanation

This risk was not identified. The FDD package includes audited financial statements for the parent company, Right at Home, LLC (RAH), which guarantees the franchisor's performance. The financials show consistent profitability and a strong balance sheet, indicating the franchisor has the financial ability to provide support and meet its obligations. Financial instability does not appear to be a current risk.

Potential Mitigations

• Even with positive financials, it is wise for your accountant to review the statements, including all footnotes, to understand the franchisor's financial structure and any contingent liabilities.
• Engage a business advisor to discuss the franchisor's long-term capitalization strategy and ability to fund future growth and system support.
• Your attorney should confirm the enforceability and scope of the parent company's Guaranty of Performance.

Explanation

This risk was not identified. The data in Item 20 shows a very low rate of franchisee terminations, non-renewals, and other cessations over the past three years relative to the total number of operating units. For 2024, the combined rate of such events was under 2% of the total outlets at the start of the year. This stability suggests a generally healthy franchise system.

Potential Mitigations

• Even with low reported turnover, it is valuable to contact a random selection of current and former franchisees from the lists in the FDD to discuss their experiences.
• Your business advisor can help you analyze the three-year trend data in Item 20 to confirm the stability is consistent.
• Ask the franchisor about the support systems that contribute to this low turnover rate to ensure they align with your needs.

Explanation

This risk was not identified. While Item 20 shows consistent system growth, the rate of expansion does not appear to be excessive. The franchisor's strong financial position, as shown in Item 21, and its established history of over 20 years suggest it has the infrastructure and resources to manage its current growth trajectory without sacrificing franchisee support.

Potential Mitigations

• It is still prudent to ask the franchisor about their specific plans for scaling support infrastructure to match unit growth.
• A conversation with franchisees who opened in the last 1-2 years can provide insight into the current quality of training and support.
• Your accountant can confirm that the franchisor's investments in support functions are keeping pace with its growth by reviewing the financials in Item 21.

Explanation

This risk was not identified. Right at Home, LLC (RAH) is a well-established system, having offered franchises since 2000. The FDD shows a large and stable network of over 500 franchised outlets, experienced management, and a long operational history. The business model is proven, and the brand has significant recognition in its industry.

Potential Mitigations

• While the system is mature, it is still valuable to have a business advisor help you research the company's recent strategic initiatives.
• A discussion with long-tenured franchisees can provide valuable perspective on the system's evolution and long-term viability.
• Your attorney should still review all documents for any recent changes that might affect a mature system.

Explanation

This risk was not identified. In-home care for seniors and other adults is a business based on long-term demographic trends rather than a fleeting fad. The franchisor has been operating successfully for over two decades, indicating a sustainable business model and sustained consumer demand. This is not a fad business.

Potential Mitigations

• It's still beneficial to have a business advisor help you research the current competitive landscape and future trends within the home care industry.
• An accountant can help you model the business's resilience to various economic conditions.
• Speaking with long-term franchisees can offer insights into how the business has adapted to market changes over the years.

Explanation

This risk was not identified. Item 2 details the business experience of the key executive team. The officers listed have extensive and long-tenured careers with Right at Home, LLC (RAH) or significant experience in relevant industries such as franchising and healthcare. The management team appears to be stable and deeply experienced in both the specific business and in managing a large franchise system.

Potential Mitigations

• Even with an experienced team, it is good practice to research the professional reputations of key executives.
• During discussions with existing franchisees, inquire about their direct experiences with the management team's accessibility and effectiveness.
• A business advisor can help you analyze the leadership structure and its potential impact on the company's future direction.

Explanation

This risk was not identified. Item 1 indicates the parent company, RiseMark Holdings, LLC, is owned by Investors Management Corporation (IMC). While IMC is an investment company, it is a long-term holding company, not a typical private equity firm with a short exit horizon. The franchisor's long operating history, stable management, and strong financials do not suggest a focus on short-term returns at the expense of system health.

Potential Mitigations

• It's still valuable for your business advisor to research Investors Management Corporation and its philosophy towards its holdings.
• Your attorney should review the assignment clauses in the Franchise Agreement to understand your rights if the system is sold.
• Discuss with long-term franchisees whether the ownership structure has had any negative impact on their business or the support they receive.

Explanation

This risk was not identified. The FDD clearly discloses the parent company, RiseMark Holdings, LLC, and its ultimate parent, Investors Management Corporation. The audited financial statements for RiseMark are provided in Exhibit D, and a Guaranty of Performance from the parent is also included. The disclosure appears to be complete and transparent regarding the corporate structure.

Potential Mitigations

• Your accountant should review the parent company's financials provided in Exhibit D to assess the strength of the entity guaranteeing performance.
• It is wise to have your attorney review the specific terms of the Guaranty of Performance to understand its scope and limitations.
• You can ask the franchisor for an organizational chart to visually confirm the relationship between the various entities.

Explanation

This risk was not identified. In Item 1, the franchisor states, "We do not have a predecessor." This indicates that the current entity, Right at Home, LLC (RAH), has been the operator and franchisor of the system since its inception. Therefore, there are no predecessor histories regarding litigation, bankruptcy, or franchisee turnover to consider.

Potential Mitigations

• It is still prudent for your attorney to confirm the corporate history through public records to ensure no predecessors have been omitted.
• A business advisor can help you review the franchisor's own 20+ year history as a substitute for predecessor analysis.
• Discussions with long-term franchisees can provide insight into the company's entire operational history.

Explanation

This risk was not identified. Item 3 of the FDD states, "No litigation information is required to be disclosed in this Item." This indicates there is no current, pending, or recent material litigation involving the franchisor, its predecessors, or key personnel that alleges franchise law violations, fraud, or similar claims. This absence of significant legal disputes is a positive indicator.

Potential Mitigations

• Although no litigation is disclosed, your attorney can conduct an independent public records search to confirm the absence of significant legal actions.
• It is still beneficial to ask current and former franchisees about any disputes they may be aware of, even if they did not result in litigation.
• Your attorney should review the dispute resolution clauses in Item 17 to understand how conflicts are handled when they do arise.