Town Pride Logo

Town Pride

Town Pride Franchising, LLC
https://townpride.com
1-207-466-4004
756-US Rt1 Ste 2, Yarmouth, ME 04096

Initial Investment Range

$13,500 to $292,000

Franchise Fee

$5,000 to $30,000

As a Town Pride franchisee, you will operate a specialty retail shop offering a curated collection to include our proprietary brand and others built around a local focus.

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Town Pride April 15, 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.

1

Franchisor Stability Risks

Start Here
Total: 10
5
2
3

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

Town Pride Franchising, LLC (TPF) explicitly warns its financial condition calls its ability to provide support into question. Its audited opening balance sheet from April 2024 shows only $2,000 in assets and net worth. This extreme lack of capitalization presents a significant risk that TPF may be unable to fulfill its obligations or even remain solvent, relying heavily on your initial fees for its operating cash. This is a critical risk for a new franchisee.

Potential Mitigations

  • Your accountant must review the financials and the explicit risk warning to assess the severe undercapitalization.
  • In discussions with your attorney, ask TPF about its plans for funding operations and support services beyond initial franchise fees.
  • Given the financial weakness, consulting a financial advisor about the viability of this investment is essential before committing funds.
Citations: Item 21, Exhibit F, FDD Page v 'Special Risks'

High Franchisee Turnover

High Risk

Explanation

As a new franchisor with no operating franchises at the end of the last fiscal year, there is no history of franchisee turnover to analyze. While this means no negative data is present, it also signifies a lack of a proven track record for franchisee success, retention, or profitability within the system. The risk lies in the complete absence of performance data from other franchisees, making this a speculative investment.

Potential Mitigations

  • A business advisor should help you evaluate the inherent risks of joining a new, unproven system with no franchisee track record.
  • Carefully vet the business model and the experience of the one company-owned store with your accountant.
  • Your attorney can help you understand the risks of being one of the first franchisees in a new system.
Citations: Item 20, Exhibit H

Rapid System Growth

Medium Risk

Explanation

This risk was not identified, as the system is new and has not yet experienced growth. However, Item 20 projects four new franchised outlets in the next fiscal year. If this growth materializes, TPF's limited resources, as shown in its financial statements, could be strained, potentially compromising its ability to provide adequate support to all new franchisees simultaneously. This rapid initial growth relative to capitalization is a key concern.

Potential Mitigations

  • With your business advisor, question TPF on its specific plans and resource allocation for supporting its first cohort of franchisees.
  • Your accountant should review TPF's financial capacity to scale support infrastructure alongside franchise sales.
  • It is critical to understand from TPF, with your attorney's help, how they will manage support if multiple franchisees open at once.
Citations: Item 20

New/Unproven Franchise System

High Risk

Explanation

TPF is an unproven, startup franchisor, having been formed in April 2024 and only starting to offer franchises. TPF explicitly discloses its short operating history as a special risk. The system has no existing franchisees and only one company-owned location operated by an affiliate. This presents a substantial risk due to the lack of a proven track record, established brand recognition, and developed support systems, making it a speculative venture.

Potential Mitigations

  • Engage a business advisor to conduct deep due diligence on the affiliate's business and the management team's industry experience.
  • Your accountant must analyze the business model's viability and TPF's extreme undercapitalization.
  • It would be wise for your attorney to attempt negotiating more protective terms to compensate for the heightened risk of a new system.
Citations: Items 1, 2, 20, 21, FDD Page v 'Special Risks'

Possible Fad Business

Medium Risk

Explanation

The business model is a specialty retail/gift shop with a 'local focus'. While this concept has enduring appeal, its success is highly dependent on local trends, tastes, and economic conditions. A prospective franchisee should consider whether the specific curated style offered by TPF has long-term viability in their target market or if it could be susceptible to rapidly changing consumer preferences, potentially behaving like a fad business without a sustained competitive advantage.

Potential Mitigations

  • With a business advisor, conduct thorough local market research to determine long-term demand for this specific retail concept.
  • Evaluate TPF's strategy for product innovation and adaptation to evolving market trends.
  • Your financial advisor should help you assess the business model's resilience against economic downturns and shifts in consumer spending.
Citations: Item 1

Inexperienced Management

High Risk

Explanation

TPF's key executive, Tamara L. Moran, has experience operating the affiliate business since 2019 but has no stated prior experience in managing a franchise system. TPF as an entity is new as of 2024. While industry experience is valuable, the lack of specific franchising experience in management is a significant risk. This could lead to underdeveloped support systems, a misunderstanding of franchisee-franchisor legal dynamics, and potential strategic errors in growing the brand.

Potential Mitigations

  • A business advisor can help you assess the potential gaps that a lack of franchising experience might create in the support system.
  • Question TPF directly about who is providing their franchise operational and legal guidance.
  • Your attorney should carefully review the franchise agreement for terms that may reflect inexperience in franchise relationship management.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD Package. The FDD does not indicate that a private equity firm owns or controls TPF. Such ownership can introduce risks related to prioritizing short-term investor returns over the long-term health of the system and franchisee profitability. It is a key factor to assess when evaluating franchisor stability and motives.

Potential Mitigations

  • Your attorney can help you verify the ownership structure of the franchisor through public records to confirm the absence of undisclosed controlling entities.
  • During due diligence, asking the franchisor about their long-term capital and ownership strategy can provide valuable insight.
  • A business advisor can help research the reputation and typical operating methods of any parent company identified.
Citations: Not applicable

Non-Disclosure of Parent Company

High Risk

Explanation

This risk is present, as TPF is a newly formed, thinly capitalized entity whose primary supplier and trademark owner is its affiliate, TownPride USA, LLC. However, the FDD does not include the financial statements for this critical affiliate. Without the affiliate's financials, you cannot fully assess the stability of your primary product source or the entity that owns the brand you are licensing, creating a significant information gap and risk.

Potential Mitigations

  • Your attorney should request the financial statements for the affiliate, TownPride USA, LLC, as it is a critical supplier and trademark owner.
  • Have your accountant analyze the risk of relying on an affiliate with unknown financial health for 80-100% of your inventory.
  • It is important to understand the terms of the intercompany license agreement mentioned in Item 13 to see how your rights are protected.
Citations: Item 1, Item 8, Item 13, Item 21, Exhibit F

Predecessor History Issues

Low Risk

Explanation

This specific risk was not identified, as TPF discloses it has no predecessors. In franchise offerings where predecessors exist, it is important to review their history for issues like litigation, bankruptcy, or high franchisee turnover, as these can indicate historical problems with the system that may have been inherited by the current franchisor. A clean history in this regard is a positive, though it does not reduce the risks of a new system.

Potential Mitigations

  • Your attorney can help confirm the franchisor's statements about its corporate history through public record searches.
  • When predecessors are disclosed, asking long-tenured franchisees about their experience under previous ownership can be very insightful.
  • A business advisor can assist in researching the business reputation of any disclosed predecessor entities.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

This risk was not identified, as Item 3 states that no litigation is required to be disclosed. A pattern of lawsuits, especially those initiated by franchisees alleging fraud or misrepresentation, can be a major red flag indicating systemic problems. Similarly, a high number of suits filed by the franchisor against franchisees might suggest an overly aggressive or litigious culture. The absence of such litigation is a positive indicator for a prospective franchisee.

Potential Mitigations

  • Your attorney can conduct independent searches for litigation that may not have met the technical disclosure threshold but could still be relevant.
  • When litigation is present, it is crucial for an attorney to analyze the nature and outcomes of the cases.
  • Discussing any disclosed litigation with current and former franchisees can provide valuable context beyond the FDD's summary.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
5
0
10

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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3

Financial & Fee Risks

Total: 10
3
5
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.

4

Legal & Contract Risks

Total: 16
5
6
5

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
2
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.

6

Regulatory & Compliance Risks

Total: 10
5
2
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
2
2
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.

8

Operational Control Risks

Total: 12
4
5
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.

9

Term & Exit Risks

Total: 18
11
6
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.

10

Miscellaneous Risks

Total: 1
1
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.