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How much does Tribos Peri Peri cost?
Initial Investment Range
$301,050 to $838,000
Franchise Fee
$35,500 to $135,500
The franchised business is to operate a fast-casual restaurant serving flame-grilled meats seasoned with Portuguese-inspired Peri Peri spice.
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Tribos Peri Peri February 5, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 19, 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 financial statements for TPP Express, LLC (TPP Express) show significant weakness. For 2024, the company had a members' deficit (negative net worth), burned through cash from operations, and was barely profitable, largely due to extremely high legal expenses. This financial instability is confirmed by multiple state regulators requiring the franchisor to obtain a surety bond or defer collecting your initial fees, which raises questions about its ability to support you or sustain its operations.
Potential Mitigations
- Your accountant must conduct a thorough review of the audited financial statements, including all footnotes, to assess the company's viability.
- Discuss the implications of the negative net worth and negative operating cash flow with your financial advisor.
- It is critical for your attorney to explain the protections offered by the state-mandated fee deferrals or surety bonds.
High Franchisee Turnover
High Risk
Explanation
The data in Item 20 tables indicates a shrinking franchise system. In the most recent year (2024), the number of both franchised and company-owned outlets declined, resulting in a net loss of two total units for the system. A pattern of unit closures and a net decline in system size can be a significant indicator of potential issues with the business model, franchisee profitability, or overall brand health. One franchisee was terminated in 2024.
Potential Mitigations
- A detailed analysis of the turnover rates with your accountant can help quantify the trend and associated risks.
- It is essential to contact former franchisees listed in Exhibit H to understand the specific reasons for their departure.
- Your business advisor should help you evaluate whether a shrinking system aligns with your long-term investment goals.
Rapid System Growth
Low Risk
Explanation
This specific risk was not identified in the FDD package. The data in Item 20 shows that the franchise system is shrinking, not growing rapidly. A franchisor expanding too quickly can strain its resources, leading to inadequate support for franchisees. It is a positive sign that this particular risk does not appear to be present.
Potential Mitigations
- Your business advisor can help you evaluate whether the franchisor's current growth (or lack thereof) is sustainable.
- Discussing the franchisor's future growth plans with existing franchisees can provide valuable insight.
- An attorney can review the franchisor's obligations to ensure they are equipped to handle any future expansion.
New/Unproven Franchise System
High Risk
Explanation
TPP Express is a young franchise system, having formed in 2019 and started franchising in 2020. This limited operating history, combined with its weak financial condition disclosed in Item 21 and a shrinking unit count in Item 20, presents a significant risk. Unproven systems may lack refined operational procedures, established brand recognition, and the stability of a mature franchisor, which could impact your potential for success.
Potential Mitigations
- Engaging a business advisor to perform enhanced due diligence on the viability of a young and financially weak system is critical.
- You should speak with the earliest franchisees in the system to learn about their experience with the developing brand.
- An attorney can help you negotiate more protective contractual terms to offset the heightened risk of investing in an emerging brand.
Possible Fad Business
Low Risk
Explanation
This risk was not identified. The business concept, focusing on Portuguese-inspired peri-peri style chicken, is part of the established fast-casual restaurant industry. While market tastes can change, this concept is not based on a new or fleeting trend. Therefore, the risk of the business being a short-lived fad appears to be low.
Potential Mitigations
- A business advisor can help you research the long-term consumer demand for this specific cuisine in your local market.
- Evaluating the franchisor's plans for menu innovation and adaptation can provide insight into its long-term vision.
- Discussing the concept's staying power with your financial advisor is a prudent step in assessing the investment.
Inexperienced Management
Medium Risk
Explanation
While the management team has several years of experience operating similar outlets, the franchising entity itself is very new (since 2019). More significantly, the extensive litigation disclosed in Item 3 between the principals and their partners in various business ventures suggests potential inexperience in managing complex business relationships and corporate governance. This internal conflict could distract management and affect the quality of support you receive.
Potential Mitigations
- Your business advisor should help you assess whether the management team's background is sufficient to support a franchise system.
- Discussing the responsiveness and effectiveness of the management team with current franchisees is highly recommended.
- An attorney can help you understand the potential impact of the disclosed litigation on management's stability and focus.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 does not indicate that TPP Express or its affiliates are owned by a private equity firm. This means decisions are less likely to be driven by short-term investor return timelines, which can sometimes conflict with the long-term health of franchisees.
Potential Mitigations
- Your attorney can help you verify the ownership structure of the franchisor through public records.
- Reviewing the assignment clause in the Franchise Agreement with your attorney is important to understand what happens if the system is sold in the future.
- Discussing any past ownership changes with existing franchisees can provide valuable historical context.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD. Item 1 does not disclose any parent companies for TPP Express, LLC. The document identifies several affiliate companies, but no parent entity that would control the franchisor. Therefore, the financial and operational stability of TPP Express itself, as disclosed in Item 21, is the primary focus for your review.
Potential Mitigations
- Your attorney can confirm the franchisor's corporate structure and verify the absence of a controlling parent entity.
- An accountant should analyze the disclosed affiliate relationships to check for any potential hidden risks or obligations.
- A business advisor can help assess the standalone viability of the franchisor without parental support.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD package. Item 1 does not disclose any predecessor entities from which TPP Express acquired its assets or that previously operated the franchise system. Your due diligence should therefore focus on the history and performance of TPP Express and its principals since their formation.
Potential Mitigations
- A thorough review of Item 1 with your attorney will confirm the absence of any disclosed predecessors.
- You can ask the franchisor directly about the origin of the business concept and system to ensure no undisclosed history exists.
- Your business advisor can help you research the history of the principals and their affiliated companies.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses two significant and ongoing arbitrations involving the franchisor's principals. These are not typical slip-and-fall lawsuits; they are internal disputes among business partners regarding ownership, fiduciary duties, and control, with one case involving claims of fraud and a $1.2 million damage estimate. This pattern of internal conflict is a major red flag for management instability and distraction, which could severely impact the support you receive.
Potential Mitigations
- A franchise attorney must review the details of the disclosed litigation and explain the potential impact on the franchisor's stability.
- The high legal fees shown in the financial statements should be discussed with your accountant to assess their drain on company resources.
- Consider this pattern of internal strife a significant risk to the long-term health of the franchisor when making your decision.
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
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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
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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
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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
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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