Explanation

Item 20 data from 2022-2024 does not indicate a high rate of terminations or non-renewals. In 2024, there was one termination out of a base of 31 franchised outlets. However, the four transfers during that same year represent a notable percentage of the system. High transfer rates can sometimes indicate franchisee distress or dissatisfaction, but this risk is considered low based on the provided data and system growth.

Potential Mitigations

• In your due diligence calls with current and former franchisees, it is important to ask about their profitability and satisfaction with the system.
• A business advisor can help you analyze the Item 20 transfer data and formulate questions for the franchisor about the circumstances of those transfers.
• Having your accountant review the Item 20 data in context with the system's growth can provide a clearer picture of franchisee stability.

Explanation

This specific TA Express franchise concept has been offered since 2018. While relatively new, TA Franchise and its parent companies, TravelCenters of America and BP, have decades of experience in operating travel centers and other franchise systems. This extensive corporate history and operational experience significantly reduces the risks typically associated with an entirely new or unproven franchise system. The business model is backed by a very established and experienced organization.

Potential Mitigations

• Discussing the specific performance and challenges of the TA Express model with existing franchisees can provide valuable insight.
• Your business advisor can help you assess how the franchisor's experience with its larger TA Center format translates to support for the TA Express model.
• An accountant's review of the parent company's financials can confirm the stability of the larger organization backing this newer concept.

Explanation

This risk was not identified. The business model, a limited-service travel center and truck stop, operates in a long-established industry providing essential services to commercial truck operators and highway travelers. This is not considered a fad business, which is typically based on a short-lived trend. However, you should always assess long-term industry trends and competitive pressures.

Potential Mitigations

• A business advisor can help you research long-term trends in the transportation and travel center industries.
• Engaging a real estate professional to analyze your proposed location's long-term viability is a crucial step.
• Your accountant can help you model the financial impact of potential industry shifts, such as changes in fuel types.

Explanation

This risk was not identified. Item 2 details the business experience of the franchisor's key management personnel. The executive team appears to have extensive and directly relevant experience in the travel center, convenience store, fuel, and franchise industries, with leadership roles at major corporations like BP and 7-Eleven. This deep experience is a positive factor for system leadership and stability.

Potential Mitigations

• When speaking with existing franchisees, it is still a good practice to inquire about their direct experiences with the management team's accessibility and effectiveness.
• A business advisor can help you research the public track record of the executives listed in Item 2.
• Your franchise attorney can help you understand the management structure and decision-making authority within the company.

Explanation

This risk was not identified. According to Item 1, the franchisor is part of the TravelCenters of America corporate family, which is a subsidiary of the global energy company BP. The FDD does not indicate ownership by a private equity firm, which can sometimes have different investment horizons and operational priorities compared to a strategic corporate owner.

Potential Mitigations

• Your attorney should always verify the ownership structure detailed in Item 1 and explain the implications of being owned by a large strategic corporation.
• A business advisor can help you research the parent company's strategy and long-term commitment to the franchise model.
• Discuss with your accountant how the financial strength of a corporate parent, as shown in Item 21, might influence the franchise system's resources.

Explanation

This risk was not identified. Item 1 provides a detailed description of the franchisor's corporate structure, including its parent TravelCenters of America Inc. and ultimate parent, BP. Furthermore, Item 21 directs you to the financial statements of the parent entity that guarantees the franchisor's performance. The FDD appears to meet disclosure requirements regarding parent companies.

Potential Mitigations

• A franchise attorney should confirm that the provided parent company disclosures and guarantees are legally sufficient and properly documented.
• Your accountant should review the provided parent financials to assess the financial strength of the entity backing the franchisor.
• Understanding the relationship between the franchisor, its parent, and the guarantor is something a business advisor can help clarify.

Explanation

This risk was not identified. Item 1 of the FDD discloses that predecessors to TA Franchise have been involved in the travel center business since 1984. The document does not appear to obscure this history. It is important for you to understand this lineage as part of your due diligence, but there are no indications of hidden negative information related to predecessors.

Potential Mitigations

• Your attorney should review the FDD for any information related to predecessors in Items 1, 3, and 4 to ensure a complete understanding of the system's history.
• When speaking with long-term franchisees, inquire about their experiences under any previous ownership or predecessor entities.
• A business advisor can help you research the public history of any predecessor companies mentioned in the FDD.