Explanation

This risk was not identified in the FDD Package. The franchisor, T.B. Franchising Systems, Inc. (TBFS), was formed in 2011 and has been franchising since that time, indicating it is not a new or unproven system. Investing in a new system can be risky due to unproven models and support structures, but that does not appear to be the primary concern here.

Potential Mitigations

• When evaluating any franchise, it is prudent for your business advisor to assess the franchisor's history and the maturity of its systems.
• An accountant should always review the financial track record to gauge the stability and sustainability of the business model.
• Your attorney can help you understand the protections available when investing in franchise systems of any age.

Explanation

This risk was not identified in the FDD Package. The franchise offers residential maintenance, repair, and senior home safety services. These services cater to fundamental and ongoing homeowner needs, particularly with an aging population, suggesting a sustainable market rather than a short-term trend or fad. Long-term viability seems plausible for this industry.

Potential Mitigations

• Engaging a business advisor to research long-term market trends for home maintenance and senior care services is a valuable step.
• Your accountant can help you model the business's resilience to economic cycles and shifting consumer spending habits.
• It is wise to ask your attorney to review any contractual obligations that would tie you to the business model if market demand were to change.

Explanation

This risk was not identified in the FDD Package. Item 2 indicates that the key personnel of T.B. Franchising Systems, Inc. (TBFS) have extensive experience in the franchising sector, many having held positions with this franchisor, its affiliates, or other franchise systems for numerous years. This suggests the management team is familiar with the challenges of running a franchise network.

Potential Mitigations

• Even with an experienced team, it is beneficial to discuss the quality of management's support and strategic direction with current franchisees.
• A business advisor can help you research the professional reputations of the key executives listed in Item 2.
• Your attorney can advise on how management's experience might influence the franchisor's fulfillment of its contractual duties.

Explanation

This risk was not identified in the FDD Package. Item 1 and Item 2 do not disclose any ownership by a private equity firm. The franchisor appears to be part of a larger, privately-held family of franchise brands. While this structure has its own dynamics, the specific risks associated with a typical private equity model, such as a focus on short-term returns and a quick exit, are not explicitly present here.

Potential Mitigations

• It is always a good practice to ask your attorney to help you understand the complete ownership structure of the franchisor.
• A business advisor can assist you in researching any parent or affiliated companies to understand their overall business philosophy.
• In discussions with current franchisees, you can inquire about any recent changes in ownership or management strategy.

Explanation

This risk was not identified in the FDD Package. Item 1 does not disclose a parent company for T.B. Franchising Systems, Inc. (TBFS). It does disclose several affiliates under common management, but TBFS appears to be a standalone entity for disclosure purposes. The provided financial statements in Item 21 are for TBFS itself and are audited, which is appropriate.

Potential Mitigations

• An accountant should confirm that the provided financial statements are for the correct legal entity offering the franchise.
• Your attorney can help verify the corporate structure and ensure there are no undisclosed parent entities that should be providing financial data.
• Understanding the relationships between the franchisor and its affiliates, as disclosed in Item 1, is crucial and can be reviewed with your business advisor.

Explanation

This risk was not identified in the FDD Package. Item 1 states that the franchisor, T.B. Franchising Systems, Inc. (TBFS), does not have any predecessors. A related entity, Tri-State Home Services, Inc., operated a single unit from 2011 to 2014, but TBFS itself does not appear to have acquired its assets from a prior franchising entity. Therefore, risks associated with a hidden negative history from a predecessor are not present.

Potential Mitigations

• Confirming the franchisor's corporate history and lack of predecessors with your attorney is a prudent step in due diligence.
• A business advisor can help investigate the history of the brand itself, even in the absence of a formal predecessor entity.
• Reviewing public records can sometimes uncover historical information, a task your attorney may assist with.