Not sure if The Paterson Center is right for you?
Take our 1-minute franchise matching quiz to get in touch with a Franchise Advisor that can match you with your perfect franchise based on your goals, experience, and investment range.
Take the Quiz & Get Matched
The Paterson Center
How much does The Paterson Center cost?
Initial Investment Range
$20,750 to $111,130
Franchise Fee
$15,750 to $41,500
A franchised business that provides entrepreneurial training, leadership and business development products and services to business owners, executives and leadership teams utilizing our Paterson LifePlan and/or StratOp platforms.
Enjoy our partial free risk analysis below
Unlock the full risk analysis to access 9 more categories covering 100+ risks.
The Paterson Center July 17, 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
Medium Risk
Explanation
The franchisor, The Paterson Center, LLC (Paterson), was formed in March 2023 and has a very short operating history. The provided 2023 financial statements show profitability, but this is largely due to $153,000 in initial franchise fee revenue, not sustainable, recurring royalties. This reliance on one-time fees for revenue creates a risk regarding Paterson's long-term financial stability and its ability to support you once initial growth subsides.
Potential Mitigations
- Your accountant should carefully analyze the franchisor's dependency on initial fees versus recurring revenue streams for long-term viability.
- Discuss the franchisor's capitalization and future funding plans with them, and have your business advisor evaluate the sustainability of their model.
- Ask your attorney about financial assurance requirements, such as bonds or escrow, that some states may impose on new franchisors.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified in the FDD package. Item 20, which tracks franchisee turnover, shows no franchised outlets for the past three years as the system is new. While this means there is no history of turnover, it also means there is no track record of franchisee success or satisfaction to evaluate. High turnover in other systems can signal franchisee distress or systemic problems.
Potential Mitigations
- Engaging a business advisor to monitor future Item 20 disclosures for this system will be important as it matures.
- When a franchisee list becomes available, your attorney can help you formulate questions to ask them about their satisfaction.
- An accountant can help you understand the financial implications if future data indicates high turnover rates.
Rapid System Growth
High Risk
Explanation
Item 20 projects the opening of 115 new franchise outlets in the next fiscal year. For a brand-new franchise system that is just beginning operations, this represents extremely rapid growth. Such aggressive expansion could strain Paterson's resources, potentially leading to inadequate training, support, and quality control for you and other new franchisees as the system scales.
Potential Mitigations
- A business advisor can help you question the franchisor on their specific plans and infrastructure to support such rapid expansion.
- It is wise to ask existing franchisees, as they become available, about the quality and responsiveness of franchisor support.
- Your accountant should review the franchisor's financial capacity to manage and support this projected growth.
New/Unproven Franchise System
High Risk
Explanation
Paterson is a new franchise system, having been formed in March 2023 and beginning to offer franchises in July 2023. The FDD explicitly highlights this 'Short Operating History' as a special risk. Investing in a new, unproven system carries higher risk due to the lack of a track record, minimal brand recognition, and the possibility of underdeveloped operational systems and support.
Potential Mitigations
- Conduct extensive due diligence on the management team's prior industry and franchising experience with the help of a business advisor.
- Your attorney should help you understand the heightened risks associated with a new franchise system.
- Given the higher risk, an accountant should help you build a financial model with very conservative projections.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. The franchise is in the business and leadership coaching industry, which is an established field. Paterson's core processes are described as having been refined over 40 years, suggesting a long-term methodology rather than a new, fleeting trend. A fad business model can be risky as consumer interest may decline, harming long-term viability.
Potential Mitigations
- A business advisor can help you research the long-term market demand and competitive landscape for this type of coaching service.
- It is prudent to ask the franchisor about plans for future innovation and adaptation to changing market needs.
- Your financial advisor can help you assess the business model's resilience to economic shifts.
Inexperienced Management
Medium Risk
Explanation
Item 2 indicates that the key executives have significant experience in the business coaching industry and with the specific Paterson processes, often as prior licensees. However, their experience in managing a national franchise system, which is a different skill set, is not detailed. This presents a risk that while they are experts in the service, they may lack the specific experience needed to effectively manage a large and growing franchise network.
Potential Mitigations
- In discussions with the franchisor, inquire about any franchise-specific experience or consultants they have engaged to guide their system's development.
- A business advisor can help you assess whether the management team's skills align with the needs of a growing franchise system.
- Your attorney can help you evaluate the franchisor's obligations to provide support and whether they seem realistic given the team's background.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 indicates the franchisor is a wholly-owned subsidiary of Paterson Holdings, LLC, which appears to be the founder's holding company, not a private equity firm. Private equity ownership can sometimes introduce risks related to prioritizing short-term investor returns over the long-term health of the franchise system.
Potential Mitigations
- It is always a good practice for your attorney to verify the ownership structure of the franchisor.
- A business advisor can help research the background of any corporate parent to understand its business philosophy.
- Your accountant can review financials to determine the source of the franchisor's capitalization.
Non-Disclosure of Parent Company
Medium Risk
Explanation
Paterson is a newly formed, wholly-owned subsidiary of Paterson Holdings, LLC. While the parent is disclosed in Item 1, its financial statements are not included in the FDD. Given that the franchisor entity is new and its financial strength is not yet established through long-term operations, the lack of parent company financials makes it difficult to assess the overall financial backing and stability of the system you would be joining.
Potential Mitigations
- An accountant should review the provided franchisor financials and note the dependency on member contributions and the lack of parent financials.
- Your attorney should inquire if the parent company guarantees the franchisor's obligations under the Franchise Agreement.
- A financial advisor can help you assess the risk of investing in a thinly capitalized subsidiary without a clear view of the parent's financial health.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 does not disclose any predecessors from which Paterson acquired the business, but rather describes a restructuring of an existing licensing model under a parent company into a new franchise system. Therefore, there is no hidden history of a prior failed franchise system to consider. It is important to review predecessor history for signs of past failures or systemic issues.
Potential Mitigations
- Your attorney should always confirm the business history detailed in Item 1.
- A business advisor can help you understand the implications of a business model conversion from licensing to franchising.
- It remains important to speak with former licensees, if possible, to understand their experience with the system's owner.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package. Item 3 states that no litigation information is required to be disclosed. This indicates there is no history of significant lawsuits involving the franchisor, its management, or its predecessors concerning issues like fraud, misrepresentation, or franchise law violations. A pattern of such litigation in other FDDs can be a major red flag about the franchisor's practices.
Potential Mitigations
- Your attorney can conduct independent searches for litigation that may not have met the threshold for disclosure.
- It is good practice to ask current franchisees about any disputes they are aware of within the system.
- A business advisor can help you assess the overall health of the franchisor-franchisee relationship as the system grows.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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.
Related Education Franchises
ActionCOACH
$71,668 to $303,513
Brain Balance Centers
$116,885 to $463,765
British Swim School
$122,070 to $316,420
Exit Factor
$62,845 to $86,995
Gracie Barra
$76,000 to $233,500
Honest Art
$133,300 to $275,325
Kids STEM Studio
$29,100 to $109,550
LearningRx
$148,000 to $235,750
Soccer Shots
$42,950 to $54,300
Speech & ABA Therapy
$267,500 to $698,750
Valhallan
$82,950 to $329,850
Wize Computing Academy
$49,000 to $78,000