The Dog Stop
Initial Investment Range
$553,500 to $1,402,800
Franchise Fee
$60,500 to $353,000
The Dog Stop businesses operate all-inclusive indoor/outdoor dog care facilities offering daycare, boarding, grooming, enrichment, obedience training, in-home services, dog walking, and retail products.
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The Dog Stop April 30, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The Dog Stop Franchising, LLC's (TDS Franchising) own audited financial statements in Exhibit B reveal a significant Members' Deficit and a history of substantial net losses over the past three years. This is so concerning that the franchisor highlights its "Financial Condition" as a Special Risk, explicitly stating it calls into question their ability to provide you with services and support. This financial weakness could jeopardize the franchisor's long-term viability and its capacity to support your business.
Potential Mitigations
- A franchise accountant must perform a deep analysis of the financial statements, including cash flow and the nature of the liabilities, to assess solvency.
- Discussing the company's capitalization plan and path to profitability with your business advisor is essential.
- Your attorney should review any state-mandated financial assurances, such as bonds or fee deferrals, required due to this weak financial condition.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals two terminations in 2023, representing over 10% of the franchised units at the start of that year. More critically, the franchisor discloses a "significant number" of "Unopened Franchises" as a Special Risk. Item 20 Table 5 quantifies this as 61 signed agreements for units not yet open. This large pipeline creates a risk of operational strain and potential future turnover if these locations experience opening delays or failures.
Potential Mitigations
- It is critical to contact former franchisees, especially those who were terminated in 2023, to understand their experiences.
- A business advisor can help you assess the franchisor's capacity to support the large number of incoming franchisees.
- Your attorney should help you formulate questions for the franchisor regarding the reasons for past terminations and the status of unopened units.
Rapid System Growth
High Risk
Explanation
Item 20 data shows the system grew by over 60% in 2024 and projects to more than double in the next year with 58 new outlets scheduled to open. When combined with the financial weaknesses disclosed in Item 21, this extremely rapid expansion raises concerns about whether TDS Franchising has the capital and infrastructure to provide adequate training, site selection, and ongoing support to all new and existing franchisees.
Potential Mitigations
- A thorough discussion with your business advisor is needed to evaluate the franchisor's scalability and support systems.
- Interviewing a mix of new and established franchisees from the list in Exhibit E can provide insight into current support levels.
- Your accountant should analyze whether the franchisor's cash flow can sustain the infrastructure needed for such growth.
New/Unproven Franchise System
Medium Risk
Explanation
TDS Franchising began franchising in 2013, so it is not a new system. However, the business model's long-term profitability for franchisees is not assured, given the financial condition of the franchisor and the high number of unopened locations. While not a startup, the significant recent and projected growth introduces risks similar to those of a newer, unproven system in terms of support capacity and stability.
Potential Mitigations
- A business advisor can help you conduct extensive due diligence on the long-term viability of the business model.
- Speaking with the earliest franchisees listed in Item 20 can provide insight into the system's evolution and historical support quality.
- Your accountant should carefully assess the franchisor's capitalization and ability to manage its rapid expansion.
Possible Fad Business
Low Risk
Explanation
The pet care industry is well-established, not a fad. However, the long-term viability of this specific business model depends on sustained consumer spending on premium pet services. A prospective franchisee should consider the model's resilience to economic downturns when discretionary spending may decrease. The franchisor's ability to innovate and adapt services, as outlined in Item 11, will be key to long-term relevance.
Potential Mitigations
- Assess the long-term market demand for premium pet services in your specific local area with a business advisor.
- Evaluating the franchisor's plans for innovation and adaptation to market changes is a useful exercise with your financial advisor.
- Your accountant can help you model the business's potential performance under various economic scenarios.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD package. Item 2 indicates that the key personnel of TDS Franchising have extensive experience in the pet care industry and in operating The Dog Stop locations, with some having been involved since 2009. Management experience is crucial as it directly influences the quality of training, support, and strategic direction provided to franchisees.
Potential Mitigations
- A business advisor can help you evaluate the resumes and specific franchise-related experience of the management team.
- It is still wise to interview current franchisees about their direct experiences with the support and guidance from the management team.
- Inquiring about management's long-term vision for the brand can provide insight into their strategic capabilities.
Private Equity Ownership
Medium Risk
Explanation
The financial statements in Exhibit B note a Secured Convertible Promissory Note with a private equity company was converted into equity in 2024. This confirms private equity involvement. Such ownership can introduce a focus on short-term returns, which may lead to increased fees, reduced franchisee support, or pressure to use affiliated vendors to enhance profitability ahead of a future sale of the company, potentially at the expense of long-term franchisee success.
Potential Mitigations
- Researching the private equity firm’s reputation and track record with other franchise systems they have owned is a prudent step.
- A conversation with your business advisor can help you assess the potential impacts of a private equity owner's typical investment timeline.
- Your attorney should analyze the franchisor's right to sell the system and the implications for your agreement.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD package. TDS Franchising discloses its parent, The Dog Stop Holdings, LLC, in Item 1. The franchisor's own financials are provided and audited. In general, if a franchisor is a thinly capitalized subsidiary, the parent's financial statements may be required to fully assess the financial backing and viability of the franchise system.
Potential Mitigations
- Your attorney can help verify the corporate structure and determine if a parent company guarantee is necessary or provided.
- If a parent company is critical to the franchisor's operations, having your accountant review their financials is an important step.
- Understanding the legal relationship and any financial obligations between the franchisor and its parent is a key task for your attorney.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 states that TDS Franchising does not have a predecessor. Generally, if a franchisor acquires a business from a predecessor, it is important to scrutinize the predecessor's history for issues like litigation, bankruptcy, or high franchisee turnover, as these could indicate inherited problems within the system.
Potential Mitigations
- A thorough review of Item 1 with your attorney is important to confirm the absence of any predecessor entities.
- A business advisor can help you perform independent research on the brand's history to ensure no undisclosed predecessors exist.
- Asking long-term franchisees about the history of the brand and any prior ownership structures is good practice.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package. Item 3 states that no litigation is required to be disclosed. A pattern of franchisee-initiated lawsuits alleging fraud or misrepresentation, or a high number of franchisor-initiated lawsuits against franchisees, can be a significant warning sign of systemic problems or an overly aggressive franchisor.
Potential Mitigations
- Your attorney should confirm that no material litigation is disclosed in Item 3.
- It is prudent to ask current and former franchisees about their experiences with disputes within the system.
- A business advisor can help you conduct public record searches for litigation involving the franchisor that may not have met disclosure thresholds.
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
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.
