The Sensory Club
Initial Investment Range
$150,800 to $207,800
Franchise Fee
$33,500 to $58,500
A health club offering a sensory gym and multi-sensory environment.
Enjoy our complimentary free risk analysis below
Unlock the full risk analysis to access 9 more categories covering 100+ risks.
The Sensory Club March 14, 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 Sensory Club, Inc.'s (The Sensory Club) audited financials show significant risks. The company has a growing stockholder's deficit, reaching ($134,017) in 2024, and has reported net losses for the past three years. The auditor's report includes a 'going concern' evaluation, raising substantial doubt about its ability to continue operating and provide support. The FDD also explicitly lists the franchisor's financial condition as a special risk.
Potential Mitigations
- Your accountant must conduct a deep analysis of the financial statements, including the 'going concern' note and negative net worth.
- A thorough discussion with a business advisor is essential to evaluate if the franchisor has sufficient capital to support its obligations.
- Consulting with your attorney is critical to understand the implications of investing in a financially distressed franchisor.
High Franchisee Turnover
High Risk
Explanation
The franchise system data in Item 20 indicates potential instability. At the start of 2023, there were four franchised outlets, and one was terminated during that year, representing a 25% termination rate. For a very small and young system, such a high rate of failure is a significant red flag that may suggest systemic problems with the business model, franchisee profitability, or franchisor support.
Potential Mitigations
- It is crucial to contact the terminated franchisee listed in Exhibit E to understand the reasons for their departure, with your attorney helping to frame questions.
- Discuss the high termination rate directly with the franchisor and evaluate the credibility of their explanation with your business advisor.
- Your accountant should factor this high historical failure rate into the risk assessment of your financial projections.
Rapid System Growth
Low Risk
Explanation
Item 20 data shows very slow growth, with only four active franchises at the end of 2024 after starting to franchise in 2022. This slow growth, combined with the financial instability disclosed in Item 21, suggests the system may be struggling to attract new franchisees or support expansion. This is a risk, but not as significant as the underlying financial weakness itself.
Potential Mitigations
- With your business advisor, question the franchisor about their specific strategies and resources for future growth and franchisee support.
- Speaking with current franchisees about their growth prospects and the support they receive is highly recommended.
- An accountant should help you assess whether the system's slow growth trajectory aligns with your own financial and business goals.
New/Unproven Franchise System
High Risk
Explanation
The Sensory Club is a new and unproven system. It began franchising in February 2022 and had only four operating outlets by the end of 2024, with no company-owned units to prove the concept's viability. The management team's prior franchising experience is not detailed. This lack of a track record, combined with poor financial health, significantly increases the risk of operational challenges and potential system failure.
Potential Mitigations
- Conducting extensive due diligence on the backgrounds of the management team listed in Item 2 is critical; your business advisor can help.
- A frank conversation with all existing franchisees about their experience with the new system's support and operational model is essential.
- Your attorney might be able to negotiate more franchisee-favorable terms to compensate for the higher risk of joining an unproven system.
Possible Fad Business
Medium Risk
Explanation
The business concept, a sensory gym for individuals with disabilities, serves a niche market. While this can be a strength, it also carries the risk of being a 'fad' or having a limited market size that may not support long-term, sustainable growth. You must assess whether the demand for these specialized services is durable and widespread enough in your local area to build a lasting business.
Potential Mitigations
- A business advisor can help you conduct independent market research to validate the long-term demand for this niche service in your specific area.
- Evaluating the franchisor's plans for innovation and service diversification to adapt to changing market needs is a prudent step.
- Your financial advisor can assist in modeling the financial viability based on a realistic assessment of the local market size.
Inexperienced Management
Medium Risk
Explanation
Item 2 shows the President has been in that role since 2016 but has other business interests. The Director of New Business Development has been with the company since 2020. The FDD provides limited information about their specific experience in managing a franchise system, as opposed to simply operating a business. Investing in a system where management's franchising expertise is not clearly demonstrated can be a significant risk for a franchisee.
Potential Mitigations
- A business advisor can help you investigate the specific franchising experience of the key executives mentioned in Item 2.
- It is important to discuss the management team's expertise and the quality of their support with current franchisees.
- Seeking legal counsel regarding the franchisor's contractual support obligations is advisable given the potential lack of deep franchising experience.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Private equity ownership can sometimes lead to a focus on short-term profits over the long-term health of the franchise system. This might manifest as reduced support, increased fees, or pressure to use affiliated vendors, potentially impacting franchisee profitability and satisfaction.
Potential Mitigations
- Should you encounter a franchise owned by a private equity firm, engaging a business advisor to research the firm's history with other franchise brands is wise.
- It is always a good practice to ask your attorney to review any clauses that permit the franchisor to sell or assign the franchise system.
- Your accountant can help assess if fee structures appear designed for short-term extraction rather than long-term system health.
Non-Disclosure of Parent Company
Low Risk
Explanation
The FDD discloses an affiliate, Terra Staffing Services, Inc., due to common ownership. However, it is described as operating in an unrelated industry. There is no parent company disclosed that would be required to provide financial statements. Therefore, this specific risk of non-disclosure is not present.
Potential Mitigations
- Your attorney should always verify the corporate structure disclosed in Item 1 to ensure all relevant parent companies or guarantors are identified.
- An accountant's review can help determine if the franchisor is a thinly capitalized subsidiary that should be backed by a parent's financials.
- A business advisor can assist in researching corporate family trees to uncover any undisclosed relationships.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. The franchisor does not disclose any predecessors from which it acquired the business. Item 1 mentions prior business experience operating a single location from 2016 to 2021, but not as a formal predecessor entity. This means the risks associated with an undisclosed negative history from a prior company are not applicable here.
Potential Mitigations
- It is a good practice for your attorney to review Item 1 for any mention of predecessors and their history.
- If a predecessor is mentioned, a business advisor can help you research its reputation and track record.
- Asking long-tenured franchisees about their experiences under any previous ownership is a key due diligence step.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD package. Item 3 explicitly states, 'There is no litigation that must be disclosed in this item.' This indicates the absence of a pattern of recent, material litigation involving the franchisor, its management, or its predecessors, particularly concerning claims of fraud, misrepresentation, or franchise law violations.
Potential Mitigations
- Your attorney should always carefully review the details of any lawsuits disclosed in Item 3.
- A business advisor can provide context on what constitutes a normal or excessive amount of litigation for a franchise system of a similar size and age.
- Even with no disclosed litigation, it is wise to ask current franchisees about any disputes they are aware of within the system.
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 Fitness Franchises
Ace Pickleball Club
$817,750 to $2,464,850
Aira Fitness
$48,694 to $311,850
Athletic Republic
$299,900 to $673,500
Bodybar Franchising, LLC
$389,964 to $759,356
Farrell's Extreme Bodyshaping
$151,028 to $413,228
Fitness Together
$221,458 to $524,484
ISI Elite Training
$266,000 to $935,000
Ohm Fitness
$373,500 to $2,647,000
Pure Sweat Studios
$557,335 to $1,165,760
The Little Gym
$519,265 to $809,595
The Tox
$258,250 to $660,800
The Yard Gym
$236,550 to $954,100