Roni's Mac Bar Logo

Roni's Mac Bar

Roni's Mac Bar Franchising, LLC
https://ronismacbar.com
1-254-218-5954
720 Franklin Avenue, Waco, TX 76701

Initial Investment Range

$138,750 to $255,800

Franchise Fee

$38,000 to $49,000

A Roni's Mac Bar franchised business offers a fast-casual restaurant featuring build-your-own mac and cheese and other menu items.

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Roni's Mac Bar July 17, 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
3
2
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor's audited financial statements for the period ending December 31, 2023, reveal a significant financial weakness. Roni's Mac Bar Franchising, LLC (Roni's LLC) reported total assets of only $8, a members' deficit of ($181,654), and a net loss. This financial state raises substantial questions about its ability to fund ongoing support, grow the brand, or even remain solvent without relying entirely on new franchise fees, which is an unsustainable model for you.

Potential Mitigations

  • Your accountant must conduct a thorough analysis of the franchisor's financial statements, including its cash flow and sources of income.
  • A business advisor can help you evaluate if the franchisor has sufficient capital to meet its support obligations to you and other future franchisees.
  • Discuss the franchisor's capitalization and plans for achieving profitability with your attorney and financial advisor before investing.
Citations: Item 21, Exhibit I

High Franchisee Turnover

High Risk

Explanation

Although there is no history for franchised outlets, Item 20 reveals a critical risk. The franchisor's single company-owned outlet, which forms the basis of its operational experience and its Financial Performance Representation, ceased operations during 2023. The failure of the system's only operating store is a significant indicator of potential systemic problems with the business model, profitability, or operational viability. This represents the highest possible turnover rate (100%) for company-owned units.

Potential Mitigations

  • It is crucial to have your attorney and business advisor help you investigate the specific reasons why the company-owned store ceased operations.
  • Ask the franchisor for a detailed explanation of the closure and what has been changed to prevent similar outcomes for franchisees.
  • A business advisor should help you weigh the significant risk demonstrated by the failure of the prototype business.
Citations: Item 20 (Tables 1 & 4)

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD package. Rapid system growth can strain a franchisor's ability to provide adequate support. Because Roni's LLC is a new franchisor with no open franchisee units, it has not yet demonstrated rapid growth. However, its future ability to manage growth is a potential concern given its limited resources.

Potential Mitigations

  • In discussions with the franchisor, your business advisor can help you inquire about their strategic plans for scaling support infrastructure as the system grows.
  • An accountant can help you review the franchisor's financial capacity to hire support staff and invest in technology to serve a larger system.
  • Your attorney should review the support commitments in the Franchise Agreement to ensure they are specific and enforceable.
Citations: Item 20

New/Unproven Franchise System

High Risk

Explanation

Roni's LLC is a new and unproven franchise system, having been formed in May 2023 and starting to offer franchises in May 2023. There are no operating franchisees, and its single company-owned affiliate location has already ceased operations. This lack of a track record presents a substantial risk to you, as the business model's viability, brand recognition, and the franchisor's ability to provide effective support are all untested in a franchise context.

Potential Mitigations

  • A business advisor should help you conduct extensive due diligence on the underlying business model's sustainability.
  • Thoroughly vet the management team's direct experience and past successes in both the restaurant industry and in franchising with your attorney.
  • Given the higher risk, your accountant should help you create conservative financial projections and secure more working capital than estimated.
Citations: Items 1, 2, 20, 21

Possible Fad Business

Medium Risk

Explanation

The business model, a fast-casual restaurant focusing on 'build-your-own' mac and cheese, could be perceived as a niche concept. While mac and cheese is a popular food, a business centered exclusively on it may have a limited customer base or be susceptible to changing dietary trends. Its long-term, mainstream viability as a standalone concept is less proven than more diversified restaurant models, presenting a risk that consumer interest could wane over your 10-year contract term.

Potential Mitigations

  • Engage a business advisor to research the long-term market trends for highly specialized, single-focus fast-casual concepts.
  • Discuss with the franchisor their plans for menu innovation and adaptation to evolving consumer tastes.
  • Analyzing local competition and market demographics with a real estate professional is crucial to gauge demand in your specific area.
Citations: Item 1

Inexperienced Management

Medium Risk

Explanation

The management team detailed in Item 2 has general restaurant operational experience, but limited specific experience in managing a franchise system is disclosed. The success of a franchise system depends heavily on expertise in areas like franchisee support, network management, and brand development, which differ from single-unit restaurant management. This lack of demonstrated franchising experience in the leadership team could pose a risk to the quality of support and strategic direction you receive.

Potential Mitigations

  • In your due diligence calls, ask current and former franchisees (if any become available) specifically about the quality and effectiveness of the franchise-specific support.
  • A business advisor can help you question the management team about how they plan to handle franchise relations and system-wide challenges.
  • Your attorney can help you understand the contractual obligations for support outlined in Item 11 to see what is guaranteed.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Private equity ownership can be a concern because PE firms may prioritize short-term returns over the long-term health of the franchisees. According to Item 1, the franchisor does not appear to be owned by a private equity firm.

Potential Mitigations

  • Your attorney can help you research the ownership structure of the franchisor to confirm its independence.
  • It is wise to ask existing franchisees in any system about any recent changes in ownership and the resulting impact on operations.
  • A business advisor can help you understand the pros and cons of different franchisor ownership structures.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. Franchisors must disclose parent companies and may need to provide their financial statements if they guarantee the franchisor's performance. Roni's LLC does not disclose any parent company and presents itself as a standalone entity.

Potential Mitigations

  • Your attorney can help you verify the franchisor's corporate structure and identify any undisclosed controlling entities.
  • If a franchisor is a subsidiary, an accountant should review the parent's financials for a complete picture of the system's stability.
  • When a parent company exists, it is important for your attorney to review any guarantees they provide.
Citations: Item 1, Item 21

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Franchisors must disclose the history of predecessors to provide a full picture of the system's background. Roni's LLC, formed in 2023, states it has no predecessors. It does mention an affiliate, Seneco Operations, LLC, has operated similar businesses, but does not classify it as a predecessor from which it acquired assets.

Potential Mitigations

  • Your attorney should carefully review the definition of a predecessor to ensure proper disclosure has been made.
  • In any franchise, a business advisor can help you research the history of the brand and its founders for a more complete picture.
  • Asking long-term franchisees about the system's history can often reveal important context.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD package. A pattern of litigation against a franchisor, especially for fraud or misrepresentation, is a major red flag. Item 3 discloses that no material litigation is required to be disclosed for Roni's LLC. This is expected for a company that has only been franchising for about a year.

Potential Mitigations

  • While none is disclosed, your attorney can conduct public record searches to see if any non-material litigation exists.
  • For any franchise, it is wise to ask current franchisees about any disputes they are aware of, whether formal or informal.
  • A business advisor can help you assess the overall health of franchisee relations within a system.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
6
1
8

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
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.

4

Legal & Contract Risks

Total: 16
7
6
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

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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
3
2
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

Unlock Full Risk Analysis

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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
5
6
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.

9

Term & Exit Risks

Total: 18
8
6
4

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.