The Yard Gym
Initial Investment Range
$236,550 to $954,100
Franchise Fee
$152,050 to $240,600
We offer franchises for the operation of a boutique strength and conditioning fitness studio identified by THE YARD GYM trademarks that we designate specializing in functional strength, conditioning, and anerobic group classes using pro-level fitness equipment and featuring individual fitness coaching in an aesthetically-inviting and high-energy space.
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The Yard Gym October 18, 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
High Risk
Explanation
The franchisor, TYG Enterprises, LLC (TYG LLC), explicitly warns in its 'Special Risks' section that its financial condition calls its ability to provide support into question. Audited financial statements in Exhibit I confirm this, showing a significant negative net worth of ($238,851) as of June 30, 2024. This indicates TYG LLC is technically insolvent and may rely on new franchise sales to fund operations, posing a substantial risk to your investment and their support capabilities.
Potential Mitigations
- An experienced franchise accountant must review the franchisor's financials, including all footnotes and trends, to assess their viability.
- It is advisable to ask your attorney about the potential implications of investing in a franchisor with negative equity.
- Discuss TYG LLC's capitalization and plans for achieving profitability with them directly, with guidance from your business advisor.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified. Item 20 data shows the U.S. franchise system is very new, with only two operating units as of June 30, 2024, and no history of franchisee terminations, non-renewals, or closures. While this means no negative history, it also means there is no track record of franchisee success or longevity. Evaluating turnover rates is a key way to assess a mature system's health.
Potential Mitigations
- As the system grows, your accountant can help you monitor franchisee turnover rates in future FDDs to gauge system health.
- Speaking with a representative sample of franchisees listed in Item 20 is a crucial step your business advisor can help with.
- Your attorney should review any future Item 20 tables for potential red flags, such as a high number of franchisor reacquisitions.
Rapid System Growth
High Risk
Explanation
TYG LLC projects opening 15 new outlets in the next year, which is substantial growth for a new system with only two currently operating in the US. This rapid expansion, combined with the financial weakness disclosed in Item 21 (negative net worth), creates a significant risk that the franchisor's support infrastructure may be unable to keep pace. This could lead to inadequate training, site selection assistance, and ongoing support for you and other new franchisees.
Potential Mitigations
- Engaging a business advisor to question the franchisor about their capacity and plans for scaling support infrastructure is beneficial.
- An accountant's review of the franchisor’s financial statements can help assess if they have the resources to support rapid growth.
- Your attorney should advise on the contractual support obligations and whether they are specific enough to be enforceable.
New/Unproven Franchise System
High Risk
Explanation
TYG LLC is a new entity in the U.S., formed in May 2023, and explicitly discloses its limited operating history as a "Special Risk." With only two franchised outlets open in the U.S. as of June 2024, the business model and support systems are unproven in this market. This represents a higher-than-average risk regarding brand recognition, operational support, and long-term viability compared to a more established franchise system.
Potential Mitigations
- A business advisor can help you conduct extensive due diligence on the viability of the business model in your specific market.
- It is wise to speak with the initial franchisees listed in Item 20 to understand their early experiences with the system's operations and support.
- Your attorney can help you understand the risks associated with investing in a new and unproven franchise concept.
Possible Fad Business
Medium Risk
Explanation
The business operates in the highly competitive and trend-driven boutique fitness sector. While strength and conditioning are core fitness principles, the specific class formats and delivery model via pre-recorded sessions could be subject to changing consumer preferences. You should evaluate whether the concept has long-term appeal and can adapt to new fitness trends to avoid the risks associated with a potential fad, ensuring sustained demand beyond the initial novelty.
Potential Mitigations
- Assessing the long-term market demand for this specific fitness concept with a business advisor can provide valuable local insight.
- Engaging a financial advisor to consider the sustainability of the business model beyond current trends is a prudent step.
- Review the franchisor's plans for innovation and adaptation with them directly to gauge their long-term vision.
Inexperienced Management
Low Risk
Explanation
This risk was not identified. Item 2 details the business experience of the management team, which appears to have significant prior experience in both the fitness industry and in operating and growing another large fitness franchise system (F45). This level of relevant experience can be a positive factor, potentially reducing risks associated with unseasoned leadership, although past success does not guarantee future results for this new venture.
Potential Mitigations
- Your business advisor can help you verify the backgrounds and reputations of the key management personnel.
- It is still advisable to speak with existing franchisees to confirm that the management's experience translates into effective support.
- Your attorney can advise on how management experience, or lack thereof, might impact your investment risks.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified. Item 1 details the franchisor's corporate structure, which appears to be controlled by its founders and principals through various entities. There is no indication that the franchisor is owned or controlled by a private equity firm. This is important because PE ownership can sometimes lead to strategies focused on short-term returns over the long-term health of the franchise system.
Potential Mitigations
- Your attorney should confirm the ownership structure detailed in Item 1 to ensure there are no undisclosed controlling parties.
- A business advisor can help you research the franchisor's owners to understand their business philosophy and history.
- If ownership changes, your attorney should review the implications under the assignment clauses in your franchise agreement.
Non-Disclosure of Parent Company
High Risk
Explanation
Item 1 identifies Bova Fitness Pty Ltd. as the ultimate parent company. However, Item 21 only provides financial statements for the U.S. franchisor, which is a new entity with significant negative equity. The parent company's financial condition, which could provide crucial support, remains undisclosed. This lack of transparency regarding the financial health of the overall enterprise increases your risk, as the U.S. franchisor's ability to stand alone appears questionable based on its own financials.
Potential Mitigations
- An accountant should review the provided financials and assess the risks of investing in a subsidiary without visibility into the parent's finances.
- Your attorney can request the parent company's financial statements from the franchisor for a more complete picture of the system's stability.
- Consider asking your attorney to negotiate for a parent company guarantee of the franchisor's obligations.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified. In Item 1, the franchisor states that it has no predecessor. While management has experience with another brand and the concept originated in Australia, the U.S. franchising entity is new and was not formed from the assets of a prior company. Therefore, there is no predecessor history of litigation, bankruptcy, or franchisee turnover to evaluate, which simplifies due diligence in this specific area.
Potential Mitigations
- Your attorney should verify the franchisor's statement about having no legal predecessor.
- A business advisor can help research the history of the affiliated Australian entity to understand its operational track record.
- It is always prudent to ask early franchisees about the system's history and evolution.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified. Item 3 states that no litigation is required to be disclosed. This is often the case for a new franchisor. The absence of litigation against the franchisor means there is no history of disputes with franchisees regarding issues like fraud or breach of contract. However, as the system grows, it will be important for prospective franchisees to monitor this item in future FDDs.
Potential Mitigations
- Your attorney can conduct a public records search to verify that no disclosable litigation has been omitted.
- As a part of due diligence, it is wise to ask existing franchisees if they are aware of any disputes, even if not formal litigation.
- A business advisor can help you understand that a clean litigation record is positive but not a guarantee of future harmony.
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
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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
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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
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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.
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