Strickland Brothers 10 Minute Oil Change
Initial Investment Range
$247,900 to $2,228,400
Franchise Fee
$25,000 to $224,900
The franchise offered in this Franchise Disclosure Document is for the operation of a Strickland Brothers 10 Minute Oil Change Business service center, a quick-service engine oil change facility which offers chassis lubrication, certain routine maintenance checks and other automotive services.
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Strickland Brothers 10 Minute Oil Change May 14, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The audited financial statements for SB Oil Change Franchising, LLC (SBOCF) present a complex financial picture. While showing profitability in 2023, the balance sheet reveals a very large receivable from related parties (owners/affiliates) of nearly $9 million, which reduces total equity. This suggests significant capital may have been transferred out of the franchisor to its owners, which could potentially impact the resources available for franchisee support, growth, and system development.
Potential Mitigations
- Your accountant must conduct a detailed analysis of the audited financial statements, paying close attention to the nature and implications of the large related-party transactions and cash flows.
- It is vital to discuss the company's capitalization and use of funds with your financial advisor to assess if the franchisor is adequately capitalized to support its obligations.
- Seeking legal counsel to understand any risks associated with the private equity ownership structure is advisable.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a potentially high rate of franchisee churn. In 2023, eight franchised outlets left the system (one termination and seven reacquired by franchisor) out of a starting base of 47, representing a churn rate of approximately 17%. A high number of outlets leaving the system could be an indicator of franchisee dissatisfaction, profitability challenges, or other systemic issues. The significant number of units reacquired by the franchisor warrants further investigation.
Potential Mitigations
- It is critical to contact a significant number of current and former franchisees from the lists in Exhibit D to understand their experiences and reasons for leaving.
- Your business advisor can help you analyze the turnover rates in comparison to industry benchmarks.
- Questioning the franchisor directly about the circumstances surrounding the high number of reacquisitions by franchisor is a necessary step your attorney can help you prepare for.
Rapid System Growth
High Risk
Explanation
The system has experienced explosive growth, expanding from 21 total units at the end of 2020 to 226 units by the end of 2023. While growth can be positive, such rapid expansion can strain a franchisor's ability to provide adequate site selection guidance, training, opening support, and ongoing operational assistance to all franchisees. You may find that support resources are stretched thin as the franchisor attempts to keep pace with its growth.
Potential Mitigations
- Inquiring with the franchisor about their specific plans to scale support staff and infrastructure to match unit growth is an important step.
- A conversation with franchisees who have opened recently, guided by your business advisor, can provide insight into the current quality of support.
- Your accountant should review the franchisor's financials to assess whether they have the capital to adequately support this rapid expansion.
New/Unproven Franchise System
Medium Risk
Explanation
The company began franchising in October 2019, making it a relatively young franchise system. Newer systems, while potentially innovative, may lack the proven track record, established brand recognition, and refined operational and support systems of more mature brands. This can present a higher level of risk regarding the long-term viability and predictability of the business model and the franchisor's ability to effectively support its franchisees as it grows and matures.
Potential Mitigations
- Conducting extensive due diligence by speaking with the earliest franchisees about their experiences is crucial.
- A thorough review of the management team's prior industry and franchising experience, with help from your business advisor, is recommended.
- Your attorney could attempt to negotiate more favorable terms, such as enhanced support commitments, to offset the higher risk associated with a newer system.
Possible Fad Business
Low Risk
Explanation
The risk of the business being a short-term fad was not identified. The quick oil change industry is a mature and well-established sector of the automotive aftermarket with consistent, long-term consumer demand. This type of business is generally not considered to be based on a fleeting trend, which reduces the risk of a sudden decline in customer interest that could jeopardize your investment.
Potential Mitigations
- A business advisor can help you research the stability and long-term outlook for the quick-lube industry in your specific market.
- Analyzing local competition with a business advisor will help confirm the sustained demand for these automotive services.
- Discussing the franchisor's strategies for long-term market relevance and adaptation with your attorney can provide additional comfort.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD. Item 2 details the business experience of the franchisor's key management personnel. The executive team appears to have significant prior experience in the automotive service and franchise industries, including roles at established brands like Meineke, Driven Brands, and RaceTrac. This level of relevant experience may reduce risks associated with inexperienced leadership.
Potential Mitigations
- It is still prudent to ask current franchisees about their direct experiences with the management team's competence and support.
- Verifying the backgrounds of key personnel through independent research can be a useful step for your due diligence.
- A business advisor can help you assess how the management team's experience aligns with the company's strategic direction and your needs as a franchisee.
Private Equity Ownership
Medium Risk
Explanation
SBOCF is controlled by a private equity firm, Princeton Equity Group, as disclosed in Item 1. This ownership structure can introduce risks, as private equity firms typically have a specific investment horizon and may prioritize maximizing short-term returns for their investors. This could potentially lead to decisions, such as increasing fees or reducing support, that may not align with the long-term health of individual franchisees. The Franchise Agreement also permits the franchisor to sell the system.
Potential Mitigations
- Engaging your business advisor to research the private equity firm's reputation and track record with other franchise systems is recommended.
- It is important to discuss with current franchisees whether they have observed any changes in fees, support, or strategy since the acquisition.
- Your attorney should review the assignment clause in the Franchise Agreement to clarify your rights if the system is sold.
Non-Disclosure of Parent Company
Low Risk
Explanation
This specific risk was not identified. The FDD's Item 1 discloses the parent company, SB PEP Holdco, LLC, and its relationship with Princeton Equity Group. The financial statements provided are for the franchisor entity itself. While parent company financials are not included, the FDD does not indicate that a parent guarantee is being used to meet financial requirements, which would typically trigger a disclosure requirement for the parent's financials.
Potential Mitigations
- Your accountant should still review the provided financials and notes for any guarantees or support obligations from the parent that could impact the franchisor's stability.
- It is wise to ask your attorney to confirm that all required disclosures regarding parent and affiliate companies have been adequately made.
- A discussion with your financial advisor about the potential impact of the overall corporate structure on your franchise is a good practice.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified, as Item 1 does not name any predecessor entities for the franchisor, SB Oil Change Franchising, LLC. The franchisor entity was formed in 2019. While it has an affiliate, Strickland's Enterprises, LLC, that has operated similar businesses since 2016, this affiliate is not defined as a predecessor from which the franchisor acquired its primary assets. The history appears to be contained within the current ownership structure.
Potential Mitigations
- Your attorney should confirm the corporate history and verify that no predecessor entities have been omitted from the disclosure.
- A business advisor can assist in researching the operating history of the affiliate, Strickland's Enterprises, LLC, for additional context.
- Inquiring with long-standing employees or franchisees about the system's history can provide valuable background information.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD. Item 3 explicitly states, "No litigation is required to be disclosed in this Item." The absence of disclosed litigation against the franchisor, especially claims of fraud or misrepresentation from other franchisees, is a positive indicator. However, this does not guarantee the absence of all disputes, only those meeting the FTC's disclosure thresholds.
Potential Mitigations
- Your attorney can conduct independent searches for litigation that may not have met the disclosure requirements.
- It is still crucial to ask current and former franchisees about any disputes they may have had with the franchisor.
- A business advisor can help you assess the overall health of franchisee relations within the system.
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
Unlock Full Risk Analysis
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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
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
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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
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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