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Success Franchising
How much does Success Franchising cost?
Initial Investment Range
$114,500 to $169,700
Franchise Fee
$77,500 to $102,500
Success Franchising, LLC offers area representative franchises for the operation of a business that solicits, screens, recruits, trains, supports, inspects and monitors third-party SUCCESS Space franchisees within a designated development territory.
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Success Franchising April 19, 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
SUCCESS Franchising, LLC (SUCCESS) is financially weak. The FDD includes explicit warnings about its financial condition, and audited financial statements in Exhibit F show significant net losses for the past three years, a member's deficit (negative net worth), and negative cash flows from operations. Note 6 of the financials states a reliance on parent company funding to continue operations. This financial instability may impact its ability to support you.
Potential Mitigations
- An experienced franchise accountant must thoroughly review the franchisor's financial statements, including all footnotes and the auditor's report.
- Discuss the franchisor's reliance on its parent company for funding and its long-term financial strategy with your financial advisor.
- Your attorney should explain the implications of any state-mandated fee deferrals imposed due to the franchisor's financial condition.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified, as the franchise system is new and has no operating Area Representatives as of the end of the last fiscal year. High turnover, indicated by a large number of terminations, non-renewals, or other cessations in Item 20, can be a major red flag for systemic issues, franchisee dissatisfaction, or lack of profitability. It is a critical metric to watch in future FDDs.
Potential Mitigations
- Once there are former franchisees listed, contacting them is a crucial step your business advisor can help you prepare for.
- A franchise attorney can help you analyze future Item 20 data to calculate the effective turnover rate.
- Your accountant can help compare turnover rates against any available industry benchmarks for context.
Rapid System Growth
Low Risk
Explanation
This risk was not identified in the FDD package, as there are no operating Area Representatives yet. Rapid system growth can strain a franchisor's ability to provide adequate training, site selection, and ongoing support. When a system expands too quickly, the quality of support for each individual franchisee may decline, potentially harming your business operations and profitability. This is a key area to monitor if the brand begins to expand.
Potential Mitigations
- A business advisor can help you evaluate a franchisor's infrastructure and capacity for supporting growth.
- Engaging with a range of franchisees, from new to established, can provide insight into the consistency of franchisor support.
- An accountant's review of the franchisor's financials can help determine if they are investing sufficiently in support infrastructure.
New/Unproven Franchise System
High Risk
Explanation
SUCCESS is a new and unproven franchise system, which is explicitly stated as a 'Special Risk'. The franchisor was formed in January 2021 and only began offering Area Representative franchises in September 2023. Item 20 shows there were zero Area Representatives operating as of year-end 2023. Investing in such a new system carries a higher risk of business model failure, underdeveloped support systems, and minimal brand recognition.
Potential Mitigations
- Conducting deep due diligence on the management team's prior industry and franchising experience is essential; your business advisor can assist.
- Your attorney should help you understand the heightened risks associated with an unproven system.
- A thorough review of the business plan and its market viability with your financial advisor is critical.
Possible Fad Business
Medium Risk
Explanation
The business operates in the competitive shared workspace industry. While providing a needed service, the long-term sustainability and demand in a post-pandemic, hybrid-work environment are still evolving. Concepts tied to specific market trends can face challenges if demand shifts, potentially impacting your long-term return on investment even if your contractual obligations to the franchisor remain for the full term.
Potential Mitigations
- It is wise to conduct independent market research with a business advisor to assess the long-term demand for co-working facilities in your specific area.
- Evaluate the franchisor's plans for innovation and adaptation to stay relevant in a changing market.
- Discuss the business model's resilience to economic shifts and competition with your financial advisor.
Inexperienced Management
High Risk
Explanation
The franchisor entity itself has no direct operational experience. Item 1 states that SUCCESS has never directly owned and operated an Area Representative Business or a SUCCESS Facility. While its executives listed in Item 2 have experience elsewhere, the franchisor entity lacks a track record of running the specific business it is franchising. This could lead to challenges in providing proven, effective operational support, training, and strategic guidance for your business.
Potential Mitigations
- A business advisor can help you thoroughly vet the specific, relevant, and hands-on experience of the key management team.
- It is critical to question the franchisor directly about how they will provide support without having direct operational experience themselves.
- Contacting the very first franchisees to open, once available, will be vital to understanding the quality of support.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Private equity ownership can introduce a focus on short-term financial returns, which may not always align with the long-term health of franchisees. This can sometimes lead to increased fees, reduced support, or pressure to use affiliated vendors. The parent company, eXp World Holdings, Inc., is a publicly traded company, which presents a different dynamic of accountability to shareholders.
Potential Mitigations
- When evaluating a franchise, a business advisor can help research the ownership structure and the owner's track record with other brands.
- Discussing any ownership changes with existing franchisees can provide valuable insight into the impact on the system.
- An attorney can review the franchise agreement for terms related to the sale or assignment of the franchise system.
Non-Disclosure of Parent Company
Medium Risk
Explanation
The FDD discloses parent companies but does not include their financial statements. While this may comply with disclosure rules (as the parent is not the guarantor), it presents a risk. The franchisor's own financials show a heavy reliance on its parent for funding to cover operational losses. Without the parent's financials, you cannot fully assess the stability of the ultimate source of funding that keeps the franchisor afloat, creating uncertainty about its long-term support.
Potential Mitigations
- Your accountant should carefully analyze the franchisor's financial statements and the specific notes regarding its reliance on parent funding.
- It's prudent to ask the franchisor about the parent company's financial commitment and long-term plans for the brand.
- Your attorney can help you understand the legal relationship between the parent and franchisor and the limits of any support obligations.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. A franchisor's predecessor is a previous entity from which the current franchisor acquired the business. Reviewing the history of predecessors, including any past litigation, bankruptcy, or franchisee turnover, is important as it can reveal inherited issues or historical challenges within the system that may still affect the brand and its operations today. This FDD states there are no predecessors.
Potential Mitigations
- Your attorney can confirm the absence of predecessors and help you understand the franchisor's complete corporate history.
- When a predecessor exists, researching their public records and history can be a key due diligence step for a business advisor.
- Speaking with long-term franchisees can provide firsthand accounts of their experiences under any previous ownership.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified, as Item 3 discloses no litigation. A pattern of lawsuits, particularly those initiated by franchisees alleging fraud, misrepresentation, or breach of contract, can be a significant red flag. It may suggest systemic problems in the franchisor's sales process, support obligations, or overall relationship with its franchisees. Conversely, a high number of suits initiated by the franchisor against franchisees might indicate an overly litigious or punitive culture.
Potential Mitigations
- Your attorney should always carefully review any litigation disclosed in Item 3 to understand the nature and outcome of the disputes.
- Independent research of court records can sometimes provide additional context beyond the FDD's summary; a legal professional can assist with this.
- Discussing any disclosed litigation with current and former franchisees can provide valuable on-the-ground perspective.
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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