Explanation

This risk was not identified in the FDD package. The franchise has been operating since 2013 and has a substantial number of units. However, for any new system, there are inherent risks like a lack of brand recognition and unproven operational support, which can affect your potential for success. Thorough due diligence is always critical when considering a new or emerging franchise brand.

Potential Mitigations

• For any franchise, a business advisor can help you conduct extensive due diligence on the founders' and management's experience in both the industry and in franchising.
• You should always speak with the earliest franchisees in a system to learn about their experiences and assess the franchisor's support.
• Having an accountant review a new franchisor's capitalization is important to ensure it has the financial runway to support its initial growth phase.

Explanation

This risk was not identified in the FDD package, as the electronics repair industry is mature and established. However, when evaluating any franchise, you should consider if the specific product or service is tied to a fleeting trend. A business model dependent on a fad could face a sharp decline in consumer interest, leaving you with long-term contractual obligations and a non-viable business after the trend passes.

Potential Mitigations

• Your business advisor can help you independently research and assess the long-term market demand for the franchise's products or services.
• Investigating the franchisor's plans for innovation, adaptation, and staying relevant beyond current trends is a wise step.
• A consultation with your financial advisor can help evaluate the business model's resilience to economic shifts and changing consumer tastes.

Explanation

This risk was not identified in the FDD package. The management team detailed in Item 2 appears to have extensive experience with the parent company, Asurion, and in relevant operational roles. For any franchise, it is vital that the leadership has experience in both the specific industry and in managing a franchise system, as this directly impacts the quality of support, training, and strategic direction you will receive.

Potential Mitigations

• It's always wise to have a business advisor help you vet the management team's background and specific experience in franchising.
• Speaking with existing franchisees about the quality of management's support and their strategic direction is a crucial due diligence step.
• If a franchisor is new to franchising, your attorney can help you determine if they have engaged experienced franchise consultants to guide them.

Explanation

This risk was not identified in the FDD package. UBIF Co. clearly discloses its relationship with its parent, Asurion, LLC, and includes the parent's guarantee in its financial statements. It is important for a franchisor to be transparent about its corporate structure. Failure to disclose a parent company or provide its financials when required can obscure the true financial backing and stability of the franchise system you are investing in.

Potential Mitigations

• Your attorney should always verify the corporate structure if there is any suspicion of an undisclosed controlling parent entity.
• If a parent company provides guarantees or is a key supplier, it is wise for your accountant to ensure the parent's financials are provided and reviewed.
• An accountant can help ensure any provided parent company financials meet standard accounting and audit requirements for a clear picture of the system's health.

Explanation

This risk was not identified in the FDD package. The franchisor, UBIF Co., was incorporated in 2012 and discloses its history clearly, including its acquisition by its parent uBreakiFix Holdings Co and subsequently Asurion. There are no predecessors mentioned. In any franchise review, it's important to analyze the history of predecessors to uncover potential inherited issues, past litigation, or high franchisee turnover that might not be immediately apparent from the current franchisor's information.

Potential Mitigations

• Your attorney should always review the predecessor information in Items 1, 3, and 4 of any FDD.
• If a system was acquired from a predecessor, conducting independent research on that predecessor's history can provide valuable context.
• A business advisor can help you formulate questions for long-term franchisees about their experiences under any previous ownership.