Salty Dawg Pet Salon
Initial Investment Range
$132,350 to $392,900
Franchise Fee
$125,000 to $375,000
We offer an area representative franchise opportunity for Area Representatives to solicit, recruit, and service Salty Dawg Pet Salon unit franchises on our behalf within a specified territory pursuant to an Area Representative Agreement (the “Franchised Business” or “Area Representative Business”).
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Salty Dawg Pet Salon April 18, 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
Purely Pet LLC's (the franchisor) audited financial statements reveal significant financial weakness. The franchisor has a negative net worth of ($230,448) and incurred a net loss of ($260,448) for the year ending December 31, 2024. Several state regulators have required the franchisor to defer collecting initial fees due to this condition. This financial state calls into question its ability to support you or sustain operations, posing a critical risk to your investment.
Potential Mitigations
- Your accountant must thoroughly analyze the franchisor's financials and the associated auditor's notes to assess its long-term viability.
- Discussing the implications of the state-mandated fee deferrals with your franchise attorney is essential to understand the level of regulatory concern.
- A business advisor can help you evaluate if the franchisor has sufficient capital to fulfill its support obligations without relying on new franchise sales.
High Franchisee Turnover
Low Risk
Explanation
The FDD data shows the franchisor is a new system with only one franchisee as of the end of 2024. Therefore, no history of franchisee turnover, terminations, or non-renewals is available. While this means high turnover is not a present issue, the lack of an operational track record is itself a significant risk, as the system's stability and franchisee satisfaction are entirely unproven. You would be one of the very first to join.
Potential Mitigations
- A discussion with a business advisor is important to weigh the risks and potential rewards of joining a new, untested franchise system.
- Your accountant should scrutinize the franchisor's financial projections and capitalization to assess its ability to survive the startup phase.
- Your attorney can help you understand the risks associated with a lack of historical performance data for the franchise network.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD package. The system is brand new, with only one franchisee, so there is no history of rapid growth. Uncontrolled growth can strain a franchisor's ability to provide adequate support, so its absence here is expected. However, the focus should be on the risks associated with a new system rather than a rapidly expanding one.
Potential Mitigations
- Asking the franchisor about their strategic growth plan and how they intend to scale support systems is a prudent step for your business advisor to help with.
- Your accountant can review the franchisor's budget for support services to see if it aligns with projected growth.
- Legal counsel should review any development schedules to ensure they are realistic and not overly aggressive.
New/Unproven Franchise System
High Risk
Explanation
The franchisor, Purely Pet LLC, was formed in May 2024 and began offering Area Representative franchises in August 2024. As of the end of the last fiscal year, only one such franchise was in operation. This is the definition of a new and unproven system. Investing at such an early stage carries a significantly higher risk of failure, as the business model, support systems, and brand recognition are not yet established.
Potential Mitigations
- A thorough investigation of the management team's prior industry and franchising experience should be conducted with your business advisor.
- Your accountant must carefully assess the franchisor's capitalization to determine if it can withstand the initial lean years of operation.
- It is critical to have your attorney attempt to negotiate more franchisee-favorable terms to compensate for this heightened risk.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. The pet services industry is generally considered stable and growing. However, the long-term viability of this specific high-end salon and bakery concept is unproven. For you as an Area Representative, the risk is tied to whether the unit franchise concept is appealing and sustainable enough for you to successfully recruit franchisees over the long term.
Potential Mitigations
- Engaging a business advisor to research the long-term market demand for high-end, boutique pet services in your target territories is recommended.
- Discuss the franchisor's plans for innovation and adaptation to changing market trends with your attorney.
- An accountant can help you analyze the underlying unit economics to assess the model's resilience beyond current trends.
Inexperienced Management
High Risk
Explanation
The Chairman, John T. Hewitt, has extensive franchise experience with Liberty Tax, but Item 3 discloses a history of significant litigation and regulatory actions from that time. This includes allegations of breach of fiduciary duty and unfair competition. While this represents experience, it also presents a substantial risk regarding management's past business practices. Other key personnel have limited history with the franchisor, having only joined in 2024.
Potential Mitigations
- It is crucial to have your attorney thoroughly review the litigation history in Item 3 to understand the nature and pattern of the allegations.
- A business advisor can help you assess the potential impact of the management team's controversial history on the brand's reputation and culture.
- Speaking with the single existing franchisee about their direct experiences with the current management team is essential.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 indicates the parent company is Loyalty, LLC, which appears to be a holding company associated with the chairman, John T. Hewitt, rather than a private equity firm. Therefore, risks specifically associated with PE ownership models, such as a focus on short-term returns and a quick exit, do not appear to be present.
Potential Mitigations
- Your attorney should still confirm the ownership structure of the parent company, Loyalty, LLC, to ensure there are no PE interests.
- A business advisor can help you research the history and other business holdings of Loyalty, LLC and its principals.
- Understanding the strategic goals of the parent company, even if not PE, is a wise step to discuss with the franchisor.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. The franchisor does disclose its parent company, Loyalty, LLC. However, the financials for Loyalty, LLC are not provided. While this is not necessarily a disclosure violation unless the parent guarantees the franchisor's obligations, it does mean you have an incomplete picture of the financial strength of the overall enterprise supporting your franchise.
Potential Mitigations
- Inquire with your attorney whether the parent company's financials should have been included based on its role and the franchisor's weak financial position.
- Your accountant should analyze the disclosed financials with the understanding that they represent a subsidiary that is highly dependent on its parent.
- A business advisor can help you research the parent company to gain more insight into its stability and resources.
Predecessor History Issues
Medium Risk
Explanation
The franchisor discloses that it purchased the assets of a predecessor, Salty Dawg, LLC, in July 2024. That predecessor had offered unit franchises since 2019 but did not offer Area Representative franchises. Item 13 also notes a third party in Texas operates a store with a similar name. This history could create some confusion regarding brand lineage and intellectual property rights, but the disclosure itself appears to be made.
Potential Mitigations
- Your attorney should review the asset purchase details to understand what liabilities, if any, were assumed from the predecessor.
- Conducting independent research on the predecessor entity and its history with franchisees could provide valuable context.
- Discussing the brand's history with a business advisor can help clarify any potential for market confusion.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses a significant and troubling litigation history involving the Chairman, John T. Hewitt, from his tenure at a prior franchise system (Liberty Tax). The disclosed cases include allegations of tortious interference, unfair competition, breach of fiduciary duty, and a governmental action by the DOJ. While these cases do not name Purely Pet LLC, they concern the key leader of the parent company and present a material risk regarding leadership's past business practices and judgment.
Potential Mitigations
- A thorough review of every litigation summary in Item 3 with your franchise attorney is absolutely critical to understand the potential risks.
- A business advisor can help you assess how this history might affect the franchisor's culture, reputation, and relationships with franchisees.
- Treating this extensive and serious litigation history as a major red flag is a necessary part of your due diligence.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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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