Explanation

This risk was not identified. The audited financial statements for Seniors Helping Seniors, LLC (SHS) show strong financial health. The company is profitable with significant net income, has positive and growing members' equity, and maintains healthy cash flow and a strong balance sheet. There are no indicators of financial instability, such as a going concern note from the auditor. This suggests SHS has the resources to support its franchisees and grow the system.

Potential Mitigations

• Engage your accountant to conduct a thorough review of the franchisor's financial statements for the last three years to independently verify financial health.
• Discuss the franchisor's financial strategy and allocation of resources for franchisee support with your business advisor.
• Your attorney can help you understand any financial performance-related disclosures or risk factors mentioned in the FDD.

Explanation

This risk was not identified. Seniors Helping Seniors, LLC has been franchising since 2006 and had 180 franchised outlets operating at the end of 2024. This indicates a well-established system with a long operational history and a substantial number of franchisees. The business model is not new or unproven in the marketplace, which can reduce risks associated with emerging franchise concepts.

Potential Mitigations

• Even with a mature system, consulting a business advisor to review the franchisor's history and strategic direction is a prudent step.
• Your attorney can review the full FDD package for any signs of recent negative trends that might affect the established system.
• An accountant can analyze historical financial performance representations to gauge the consistency and health of the mature system.

Explanation

This risk was not identified. The franchise operates in the in-home senior care industry, a sector supported by strong, long-term demographic trends of an aging population. This is a well-established service industry, not a business model based on a fleeting trend or fad. A business tied to fundamental demographic needs generally has greater potential for long-term sustainability and is less susceptible to sudden shifts in consumer interest.

Potential Mitigations

• A business advisor can help you research long-term market trends for the senior care industry in your specific geographic area.
• Your accountant can help you model different economic scenarios to test the resilience of the business model.
• Engaging with your attorney to understand the stability of the legal and regulatory environment for this industry is advisable.

Explanation

This risk was not identified. FDD Item 2 shows that the key executives of Seniors Helping Seniors, LLC have extensive and long-term experience with the company and within the senior care industry, with some involved since 1998. This level of management stability and relevant experience is a positive indicator, suggesting a deep understanding of the business operations and franchisee needs, which can reduce risks for new owners.

Potential Mitigations

• In discussions with the franchisor, it is still useful to inquire about the roles and experience of the broader support team you will be interacting with day-to-day.
• Your business advisor can help you formulate questions for current franchisees about the practical impact and quality of management's leadership.
• An attorney can confirm that the experience listed in Item 2 aligns with the support obligations promised in the Franchise Agreement.

Explanation

This risk was not identified in the FDD. Item 1 does not indicate ownership by a private equity firm; the management team appears to be long-tenured and stable. The absence of PE ownership can sometimes suggest a focus on the long-term health of the franchise system over short-term financial returns, which may be a positive factor for prospective franchisees.

Potential Mitigations

• Your attorney should always confirm the ownership structure disclosed in Item 1 and investigate any recent changes in control.
• A business advisor can help you research the franchisor's history to understand its ownership philosophy and long-term goals.
• During franchisee validation calls, asking about their perception of the franchisor's long-term commitment to the brand is a valuable exercise.

Explanation

This risk was not identified. The FDD clearly states in Item 1 that the franchisor does not have a parent company. This simplifies the corporate structure and means the financial statements and disclosures provided for Seniors Helping Seniors, LLC represent the complete financial picture of the entity you are contracting with, reducing the risk of instability from an undisclosed or financially weak parent entity.

Potential Mitigations

• Your attorney should still verify the corporate structure to ensure there are no undisclosed affiliated entities that could pose a risk.
• An accountant should review the provided financial statements to confirm the franchisor is a standalone, viable entity.
• A business advisor can help you assess the franchisor's self-sufficiency and ability to support the system without a parent company.

Explanation

This risk was not identified. The FDD states in Item 1 that the franchisor has no predecessors. This means the entity offering the franchise is the same one that developed the system's history. You do not have to worry about uncovering negative historical information, such as litigation or bankruptcies, from a prior entity that the current franchisor acquired, which simplifies your due diligence.

Potential Mitigations

• Your attorney should confirm the accuracy of the 'no predecessors' statement through public records searches as part of due diligence.
• It's still valuable to ask long-tenured franchisees about the company's history to ensure there are no unmentioned, functionally similar predecessor entities.
• Your business advisor can help you review the company's full history as disclosed in the FDD to ensure a complete understanding.