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The Camp Transformation Center

The Camp Franchise Systems LLC
https://www.thecamptc.com
1-909-325-6011
5871 Pine Avenue, Suite 200, Chino Hills, CA 91709

Initial Investment Range

$349,350 to $472,350

Franchise Fee

$58,000 to $60,000

The franchises described in this disclosure document are for the operation of THE CAMP TRANSFORMATION CENTER businesses offering health, fitness and weight control services.

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The Camp Transformation Center March 18, 2025 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.

1

Franchisor Stability Risks

Start Here
Total: 10
4
2
4

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor's 2024 financial statements show a net operating loss and a negative net income, indicating financial weakness. Owners took significant distributions despite the loss. Furthermore, the franchisor faces pending litigation from several California District Attorneys seeking over $10 million, for which there is no insurance coverage. A negative outcome could severely impact the franchisor's ability to support you, and its overall viability.

Potential Mitigations

  • An experienced franchise accountant must conduct a thorough review of the franchisor's financial statements, including footnotes and cash flow.
  • Discuss the potential impact of the pending litigation on the franchisor's financial health and stability with your attorney.
  • Ask a business advisor to assess if the franchisor's financial model is sustainable without relying on new franchise sales.
Citations: Item 3, Item 21, FDD Exhibit F

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals an extremely high rate of franchisee exits. In 2024, a total of 26 franchised outlets left the system (via termination, non-renewal, cessation, or reacquisition) from a starting base of 97. This represents an approximate 27% annual turnover rate, which is a significant indicator of potential systemic problems, franchisee dissatisfaction, or lack of profitability within the system. This high churn rate is a critical risk factor.

Potential Mitigations

  • It is essential to contact a significant number of former franchisees listed in Exhibit H to understand their reasons for leaving the system.
  • Your accountant should help you analyze the turnover trends over the last three years to assess system stability.
  • Discuss the high turnover rate directly with the franchisor and evaluate the credibility of their explanations with your business advisor.
Citations: Item 19, Item 20, FDD Exhibit H

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD Package. The FDD does not indicate that the franchisor is expanding at a rate that outpaces its support capabilities. However, rapid growth in any franchise system can strain resources, potentially leading to diluted support, reduced quality control, and inadequate assistance for individual franchisees.

Potential Mitigations

  • A business advisor can help you question the franchisor about its infrastructure for supporting franchisee growth.
  • In discussions with current franchisees, it is wise to ask about the quality and timeliness of the support they currently receive.
  • An analysis of the franchisor's hiring and support staff expansion plans with your business advisor could provide insight into their growth management.
Citations: Item 20

New/Unproven Franchise System

High Risk

Explanation

The franchisor, The Camp Franchise Systems LLC (The Camp LLC), began franchising in 2016 and its affiliate began operating the concept in 2010. While the concept has history, the franchise system itself is still relatively young. Item 20 data shows a system that is shrinking, not growing, which presents a significant risk regarding the long-term viability and stability of the brand and franchise network.

Potential Mitigations

  • Investigating the business experience of the management team in both franchising and the fitness industry is a task for your business advisor.
  • A frank discussion with the earliest franchisees about their journey and the evolution of franchisor support is advisable.
  • Your accountant should carefully assess the franchisor's capitalization and financial stability, especially given the system's recent contraction.
Citations: Item 1, Item 20

Possible Fad Business

Medium Risk

Explanation

The franchise operates in the competitive health, fitness, and weight control industry. While this sector has sustained demand, specific concepts within it can be subject to trends. You must assess whether The Camp's specific model, focusing on 'Transformation Centers,' represents a long-term, sustainable business or if it is tied to a particular fitness trend that could fade over time, impacting your long-term viability.

Potential Mitigations

  • Engage a business advisor to research the long-term market trends for this specific type of fitness and weight-loss center.
  • Question the franchisor on their plans for research and development to keep the business model fresh and adaptable.
  • Speaking with long-standing franchisees about how consumer demand has evolved over their tenure can provide valuable perspective.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD Package. The principals, Alejandra and Luis Font, appear to have been involved with the underlying business concept since 2010 and the franchise system since its inception in 2016. However, prospective franchisees should always verify the depth and relevance of the management team's experience, as this directly impacts the quality of support and strategic direction.

Potential Mitigations

  • A thorough vetting of the management team's background in both the fitness industry and franchise system management is a wise step to take with a business advisor.
  • It is prudent to discuss the quality of management's guidance and support with a range of existing franchisees.
  • Your attorney can help you formulate questions for the franchisor about their team's specific experience in managing a franchise network.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package. The franchisor is disclosed as a privately held LLC and there is no indication of private equity ownership. Generally, it is important to understand the ownership structure, as a private equity owner's typical focus on short-term returns can sometimes conflict with the long-term health of the franchise system and its franchisees.

Potential Mitigations

  • Confirming the ownership structure with your attorney is a good practice to ensure there are no undisclosed controlling entities.
  • Should ownership change in the future, it is advisable to research the new owner's track record with other franchise systems.
  • Your attorney can help you understand the implications of the 'Assignment by Franchisor' clause in the event of a future sale.
Citations: Item 1

Non-Disclosure of Parent Company

Medium Risk

Explanation

The franchisor discloses its affiliate, TCB, but does not provide separate financial statements for it, even though TCB owns the trademarks and operates the company-owned centers. While not necessarily a violation, not having full financial transparency into this key affiliate could obscure a complete picture of the overall financial health of the brand's operations. The franchisor itself shows an operating loss, making affiliate health more critical.

Potential Mitigations

  • Your accountant should review the provided financials and note the absence of affiliate financials.
  • It is advisable to ask the franchisor for financial statements of key affiliates like TCB to get a fuller picture of the enterprise.
  • Understanding the specific legal and financial relationships between the franchisor and its affiliates is a critical task for your attorney.
Citations: Item 1, Item 21, FDD Exhibit F

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD Package. The franchisor, The Camp LLC, states it does not have a predecessor. Its affiliate, TCB, has operated the concept since 2010, and this history is disclosed. When a franchisor has a predecessor, it is important to review that entity's history for any litigation, bankruptcy, or franchisee turnover issues that might carry over to the current system.

Potential Mitigations

  • Your attorney should confirm the franchisor's representations about its corporate history and lack of predecessors.
  • Conducting independent research on the individuals involved in management can sometimes reveal prior business activities relevant to your decision.
  • Asking long-tenured franchisees about the history of the business can provide valuable context.
Citations: Item 1

Pattern of Litigation

High Risk

Explanation

A significant pattern of litigation is disclosed. There is a pending case by the State of California against the franchisor and its affiliate alleging unlawful business and advertising practices. Additionally, there are several concluded major lawsuits, including a class-action settlement with former employees for $1.5 million and a settlement with the Department of Industrial Relations for $1 million over wage and hour violations. This history indicates significant legal and compliance risks.

Potential Mitigations

  • A thorough review of every litigation summary in Item 3 with your attorney is absolutely essential.
  • The potential financial and reputational impact of the pending litigation should be discussed with your accountant and business advisor.
  • Treating this pattern of litigation as a major red flag, it is crucial to understand the root causes by speaking with your attorney.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
7
1
7

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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3

Financial & Fee Risks

Total: 10
4
5
1

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.

4

Legal & Contract Risks

Total: 16
8
4
4

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.

5

Territory & Competition Risks

Total: 5
3
1
1

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.

6

Regulatory & Compliance Risks

Total: 10
4
3
3

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.

7

Franchisor Support Risks

Total: 4
3
1
0

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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8

Operational Control Risks

Total: 12
4
7
1

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.

9

Term & Exit Risks

Total: 18
9
7
2

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.

10

Miscellaneous Risks

Total: 2
2
0
0

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.