Explanation

This risk was not identified in the FDD. Item 20 data and Exhibit H show that no franchised outlets have been terminated, ceased operation, or otherwise left the system. This is expected, as Tabla LLC is a new franchisor that only began offering franchises in May 2024 and has no operational franchised units that could have left. High turnover is often a key indicator of systemic problems, so its absence here is positive but uninformative.

Potential Mitigations

• Engaging a business advisor to monitor system growth and future turnover rates can provide ongoing insight.
• When conducting due diligence, you should ask the first few franchisees about their satisfaction and support levels.
• An accountant can help you establish metrics to track for your own business to ensure profitability.

Explanation

The risk of excessively rapid system growth straining the franchisor's support capabilities was not identified. Item 20 shows that while there are franchise agreements signed, no franchised outlets are open yet. Therefore, the franchisor's support systems are not currently under pressure from rapid growth. Monitoring the pace of future openings against the franchisor's capacity to provide support will be important for early franchisees.

Potential Mitigations

• A discussion with your business advisor about the franchisor's staffing and infrastructure plans is a prudent step.
• You should question the franchisor about their specific plans to scale support services as more units open.
• Reviewing the experience of the management team in Item 2 with your attorney can offer insight into their ability to manage growth.

Explanation

This risk does not appear to be present. The business model, offering Indian and Asian fusion cuisine in both fast-casual and fine-dining formats, is based on an established restaurant concept that has been operating through affiliate-owned locations since 2008. This long operating history of the underlying business concept suggests it is not based on a short-term or fleeting trend, reducing the risk that the business is a fad with limited long-term viability.

Potential Mitigations

• A business advisor can help you research local market demand for Indian and Asian fusion cuisine to validate its long-term appeal in your area.
• It is prudent to discuss the franchisor's plans for menu innovation and concept evolution to ensure it remains competitive.
• Reviewing the performance of the affiliate-owned restaurants over many years could provide insight into the concept's sustainability.

Explanation

This risk does not appear to be significant. While Tabla LLC itself is new to franchising, the key executives listed in Item 2 have substantial and long-term experience operating the underlying Tabla Indian Cuisine restaurant concept through affiliated companies since 2008. For example, the CEO and COO have been in their roles at an affiliate since 2008. This extensive operational experience in the specific business being franchised helps to mitigate the risks associated with a new franchise system.

Potential Mitigations

• A thorough review of the specific franchising experience of the management team with your business advisor is still recommended.
• You should ask management about any external franchise consultants or legal counsel they have retained to guide their franchise launch.
• In discussions with the franchisor, inquire about how their direct operational experience will translate into effective franchisee support.

Explanation

This risk was not identified in the FDD. Item 1 indicates that Tabla LLC is a privately held limited liability company. There is no disclosure of ownership by a private equity firm. The franchisor's parent company is identified as Gourmet Chefs LLC, which appears to be the founders' holding company, not a financial buyer. Therefore, the specific risks associated with a private equity ownership model, such as a focus on short-term returns, do not appear to be present.

Potential Mitigations

• Your attorney can help you verify the ownership structure of the franchisor and its parent company through public records.
• A business advisor can help you research the background of the parent company, Gourmet Chefs LLC, to confirm its nature.
• It is still prudent to ask the franchisor about their long-term vision for the company and any plans for future sale of the system.

Explanation

This risk was not identified. The FDD discloses a parent company, Gourmet Chefs LLC, in Item 1. However, the franchisor's own audited financial statements are provided in Item 21 and Exhibit D. As the parent company is not guaranteeing the franchisor's obligations and the franchisor has its own audited financial statements, the non-disclosure of parent financials does not appear to be a risk or a violation of disclosure rules in this case.

Potential Mitigations

• Your attorney should confirm if any state-specific laws would require the parent company's financials under these circumstances.
• An accountant can review the disclosed related-party transactions between the franchisor and its parent in the financial statement notes.
• Understanding the relationship and any dependencies between the franchisor and its parent is a key discussion point for your business advisor.

Explanation

This risk was not identified in the provided FDD. Item 1 states that the franchisor, Tabla LLC, does not have any predecessors. The business is a new franchise entity, although its founders and affiliates have a long operating history with the underlying restaurant concept. The absence of a predecessor means there is no hidden history of litigation, bankruptcy, or high franchisee turnover from a prior entity to be concerned about.

Potential Mitigations

• Your attorney can help verify the franchisor's corporate history to confirm the absence of any predecessors.
• A business advisor can still research the history of the affiliate companies mentioned in Item 1 for any relevant background information.
• Discussions with the franchisor about the transition from company-owned operations to a franchise model can provide valuable context.

Explanation

This risk was not identified in the FDD. Item 3 explicitly states, "No litigation is required to be disclosed in this Item." This indicates that the franchisor, its predecessors, and its management have not been involved in the types of material litigation that require disclosure under federal franchise rules, such as actions involving fraud, misrepresentation, or franchise law violations. This is a positive indicator, though it is based on the franchisor's own reporting.

Potential Mitigations

• An attorney can perform an independent public records search to verify the absence of significant litigation.
• Speaking with any signed franchisees listed in Exhibit G can help confirm a positive relationship with the franchisor.
• It is wise to have your business advisor assess the franchisor's overall reputation within its local operating market.