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How much does Sambazon cost?
Initial Investment Range
$380,000 to $665,000
Franchise Fee
$30,000 to $60,000
The franchise offered is for the operation of a quick-service Sambazon retail store that offers and sells to the general public açaí and other fruit-based food and beverage products, including açaí and other fruit-based smoothies, bowls, energy drinks, frozen desserts, frozen sorbets, superfruit packs and accessories and other healthy food options.
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Sambazon October 15, 2024 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 22, 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
Sambazon USA Franchising LLC (Sambazon USA) was formed in September 2023 and its audited financials show a net loss with reliance on its parent for funding. While the parent has committed to continued support, this financial dependence means the franchisor's ability to provide services and grow the brand is tied to the parent's financial health and willingness to fund a new venture. State regulators in Maryland and Hawaii have required fee deferrals due to this financial condition.
Potential Mitigations
- Your accountant should carefully review the franchisor's and parent company's financial health and capital structure.
- A franchise attorney can explain the practical implications of the disclosed financial dependence and any state-mandated fee deferrals.
- Discuss the franchisor's funding and support commitment with a business advisor to assess long-term stability.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified as Sambazon USA is a new franchise system with no operating, transferred, or terminated franchised outlets as of the FDD's date. High franchisee turnover is a critical indicator of potential systemic problems, such as a lack of profitability or poor franchisor support. The absence of this data means there is no track record to evaluate, which is a risk in itself.
Potential Mitigations
- A business advisor can help you analyze the risks inherent in joining a new system with no franchisee performance history.
- Discuss the franchisor's long-term franchisee support and retention strategies with them directly.
- Your attorney can advise on negotiating protections given the lack of historical data.
Rapid System Growth
Low Risk
Explanation
This risk was not identified as the franchise system is new and has not yet experienced rapid growth. Evaluating how a franchisor scales its support infrastructure to match unit growth is crucial. Rapid expansion without a corresponding increase in support staff and resources can strain the system, potentially leading to inadequate training, site selection assistance, and ongoing operational guidance for franchisees.
Potential Mitigations
- A discussion with the franchisor about their specific plans for scaling support systems is advisable.
- Engage a business advisor to assess whether the management team's experience is suited for managing future growth.
- Your accountant can review the financials to determine if the company appears capitalized for sustainable expansion.
New/Unproven Franchise System
High Risk
Explanation
Sambazon USA is a new franchisor, formed in September 2023 and beginning to offer franchises in November 2023. As of the FDD date, there are no franchised stores in operation. While its affiliate has operated a store since 2010, the franchise system itself is entirely unproven. Investing in a new system carries higher risks related to unproven operational models, lack of brand recognition, and potential instability, as highlighted in the FDD's 'Special Risks' section.
Potential Mitigations
- Your attorney can help you perform enhanced due diligence on the affiliate's operating history and the management team's direct franchise experience.
- A business advisor should help you evaluate the viability of a new franchise concept in your specific market.
- Given the higher risk, consulting an attorney to negotiate more franchisee-favorable terms may be possible.
Possible Fad Business
Medium Risk
Explanation
The business centers on açaí bowls and smoothies, a market that has seen significant growth but also increased competition. While the broader health food segment is well-established, the specific açaí bowl market could be subject to shifting consumer trends. A prospective franchisee should evaluate whether the concept has long-term appeal beyond current popularity or if it could be a business tied to a specific trend with limited staying power.
Potential Mitigations
- A business advisor can help you research the long-term market trends for açaí bowls and similar health food concepts in your area.
- Discuss the franchisor's plans for product innovation and menu diversification to adapt to changing consumer tastes.
- Evaluate the brand's ability to compete with both national chains and local independent shops.
Inexperienced Management
Medium Risk
Explanation
While several executives have significant experience with major brands like Yum! Brands and Delaware North, the franchisor entity itself is new. Furthermore, Item 4 discloses that the Senior Director of Franchise and Business Development filed for personal bankruptcy in 2021. While this does not reflect on the company's finances, a personal bankruptcy for a key management figure involved in franchise sales is a disclosure that requires careful consideration.
Potential Mitigations
- A business advisor should help you weigh the management team's industry experience against the franchisor entity's lack of a track record.
- Your attorney can discuss the potential implications of the bankruptcy disclosure for a key executive.
- Ask the franchisor direct questions about the roles and stability of the management team.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD. The franchisor, Sambazon USA, is a subsidiary of another entity and is not disclosed as being owned by a private equity firm. When a franchisor is PE-owned, there can be a focus on short-term returns over the long-term health of the system, which may affect franchisees through cost-cutting or pressure to increase fees.
Potential Mitigations
- An attorney can help verify the franchisor's ownership structure and identify any ultimate controlling parties.
- Asking the franchisor about their long-term vision and commitment to the brand is a worthwhile exercise.
- Speaking with a business advisor can help you understand the different risks associated with various franchisor ownership structures.
Non-Disclosure of Parent Company
Medium Risk
Explanation
The FDD clearly identifies the parent companies, Sambazon Worldwide Licensing, LLC and the ultimate parent, Sambazon, Inc. However, financial statements for these parent entities are not provided. While the franchisor's financials are audited, the notes explicitly state that its future operations are dependent upon the success and financial support of the Ultimate Parent. The absence of parent financials makes a complete assessment of the entire enterprise's financial stability more difficult.
Potential Mitigations
- Your accountant should analyze the franchisor's financials with the understanding that it is a dependent entity.
- An attorney can help you understand the legal relationship and obligations between the franchisor and its parent.
- Ask the franchisor about the financial health and long-term commitment of the parent company to the franchise system.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD. Item 1 states that the franchisor has no predecessors that are required to be listed. In cases where a franchisor acquires a system from a predecessor, it is important to review the predecessor's history for issues like litigation, bankruptcy, or high franchisee turnover, as these could indicate inherited systemic problems.
Potential Mitigations
- It is good practice to have an attorney confirm the corporate history of the franchisor.
- A business advisor can assist in researching the background of the brand and its affiliated companies.
- Always ask current business operators, if any, about the history and evolution of the brand.
Pattern of Litigation
Medium Risk
Explanation
Item 3 discloses no litigation involving the franchisor. However, Item 4 discloses that a key executive, the Senior Director of Franchise and Business Development, filed for personal bankruptcy in 2021. While not litigation against the company, this disclosure concerning a key management figure is a required element of the FDD and a factor to consider in your overall risk assessment.
Potential Mitigations
- An attorney should review the Item 4 disclosure and discuss its potential relevance to your investment decision.
- Consider the role and influence of the individual involved in the franchise sales and development process.
- A business advisor can help you weigh this factor as part of your comprehensive due diligence on the management team.
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
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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
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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
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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
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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
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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
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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