Explanation

The business of pet waste removal is a well-established service industry, not typically considered a fad. The franchisor's affiliate has been in this line of business since 2010, which indicates a history of sustained demand. Therefore, the risk of this being a short-lived trend appears to be low. Your success will likely depend more on local market execution and competition rather than the novelty of the service itself.

Potential Mitigations

• A business advisor can help you analyze the long-term demand and competitive landscape for pet waste removal services in your specific local market.
• Review the franchisor's plans for service innovation and adaptation to ensure they are focused on long-term market relevance.
• Focus your due diligence on operational efficiency and marketing effectiveness rather than the risk of the core service becoming obsolete.

Explanation

This specific risk was not identified in the FDD Package. The management team, particularly the CEO, has over a decade of direct experience operating in the pet waste removal industry through an affiliated company that predates the franchise system. While the franchise company itself is newer, the leadership appears to have substantial industry-specific operational experience. This helps mitigate risks associated with inexperienced management who do not understand the core business.

Potential Mitigations

• It is still prudent to investigate the management team's experience specifically in supporting a franchise system, which differs from running corporate-owned locations.
• Discuss the management team's accessibility and quality of support with current franchisees.
• Engaging a business advisor can help you assess if the management's skills align with the support needs of a franchisee.

Explanation

This risk was not identified in the FDD Package. Item 1 does not indicate that the franchisor is owned or controlled by a private equity firm. The ownership appears to be held by the individuals listed in Item 2. Therefore, the specific risks associated with a private equity ownership model, such as a focus on short-term returns over long-term system health, do not appear to be present in this case.

Potential Mitigations

• Although not owned by a PE firm, it is wise to have your attorney confirm the ownership structure and identify any majority stakeholders.
• Discuss the franchisor’s long-term vision for the brand with management to ensure it aligns with your goals as a small business owner.
• A business advisor can help you evaluate the stability and motivations of any ownership structure, regardless of type.

Explanation

This risk was not identified in the FDD Package. Item 1 does not disclose a parent company, and the franchisor itself appears to be the primary operating entity for the franchise system. The financial statements provided are for the franchisor, Scoop Soldiers Franchise Company, LLC, and appear to be audited as required. There is no indication of a parent company whose financials would be material to your investment decision.

Potential Mitigations

• Your attorney should always verify the corporate structure to confirm the absence of any undisclosed parent or controlling entities.
• When a franchisor is a subsidiary, it's crucial for an accountant to review the parent's financials if they guarantee obligations, as that can affect system stability.
• Always ask your accountant to confirm that the provided financial statements are for the correct legal entity offering the franchise.

Explanation

This risk was not identified in the FDD Package. Item 1 states that Scoop Soldiers Franchise Company, LLC (Scoop Soldiers) does not have any predecessors. It does mention an affiliate, Scoop Soldiers Service Company, LLC, is the successor-in-interest to another affiliate, Pooper Troopers USA, LLC, but the franchisor entity itself claims no predecessor. Therefore, risks from an undisclosed or problematic predecessor history do not appear to be present.

Potential Mitigations

• It's good practice for your attorney to confirm the history of the brand and key trademarks, even if no formal predecessor is listed.
• Ask long-tenured employees or franchisees about the history of the business to uncover any informal predecessor issues.
• A business advisor can help you research the brand's reputation under any prior names or ownership structures.

Explanation

This risk was not identified in the FDD Package. Item 3 discloses one pending lawsuit where the franchisor's affiliate is the plaintiff, acting to defend the system's trademark against infringement. There is no disclosure of litigation initiated by franchisees against the franchisor alleging fraud, misrepresentation, or other systemic issues. The absence of such lawsuits is a positive indicator, suggesting a lower level of franchisee-franchisor legal conflict compared to some other systems.

Potential Mitigations

• Have your attorney review the details of any disclosed litigation, even if the franchisor is the plaintiff, to understand its potential impact.
• It is always a good practice to conduct independent searches for litigation involving the franchisor or its principals that may not have been required to be disclosed.
• You should still discuss general franchisee satisfaction and any non-litigated disputes with current and former franchisees.