UFC Gym Logo

UFC Gym

UG Franchise Operations, LLC
https://www.ufcgym.com
1-949-612-9635
4160 Temescal Canyon Road, Suite 112, Corona, CA 92883

Initial Investment Range

$149,440 to $5,671,191

Franchise Fee

$103,600 to $2,490,000

The franchise is to operate a membership-based, MMA-oriented, physical fitness facility under the UFC GYM® name that, depending on the model of gym developed, offers functional fitness training regimens including, Daily Ultimate Training, mixed martial arts, cardio boxing, cardio kick boxing, core training, Jiu Jitsu and Muay Thai boxing, utilizing a weight room, a bag area and an octagon with unique construction and design features.

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UFC Gym April 18, 2025 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
4
1
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor explicitly discloses that its "Financial Condition... calls into question the franchisor's financial ability to provide services and support to you." While audited financials for 2024 show profitability and a reduction in the historical accumulated deficit, this direct warning from the franchisor itself presents a significant risk. Your ability to receive ongoing support could be impacted if the company's financial situation deteriorates, despite recent positive results.

Potential Mitigations

  • Your accountant should perform a detailed analysis of the audited financial statements in Exhibit H, focusing on cash flow, debt, and the source of revenue.
  • Discuss the franchisor's explicit financial risk warning with your attorney to understand its potential legal and operational implications for your investment.
  • A business advisor can help you assess whether the franchisor's current resources are sufficient to support both existing franchisees and future growth.
Citations: Item 21, Exhibit H, FDD Special Risks section

High Franchisee Turnover

High Risk

Explanation

The FDD discloses significant franchisee turnover. In 2022, the system experienced a turnover rate of over 26% (17 terminations or cessations out of a starting base of 65 franchised outlets). In 2023, the rate was nearly 15%. Such high numbers may indicate systemic issues, such as franchisee unprofitability, dissatisfaction with the business model, or inadequate support from UG Franchise Operations, LLC (UG Franchise). High turnover represents a critical risk to your potential for success.

Potential Mitigations

  • It is crucial to contact a significant number of former franchisees listed in Item 20 to understand the specific reasons for their departure.
  • Your accountant should analyze the turnover data for all three years to assess the overall health and stability of the franchise system.
  • Discuss the high turnover rates and their potential causes with your business advisor before making any commitment.
Citations: Item 20

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD package. The data in Item 20 does not suggest that the franchise system is growing at a rate that is likely to outpace the franchisor's ability to provide franchisee support. However, uncontrolled growth can strain a franchisor's resources, potentially leading to a decline in the quality of training, site selection assistance, and ongoing operational support for all franchisees.

Potential Mitigations

  • Engage a business advisor to evaluate the franchisor's infrastructure for franchisee support relative to their stated growth plans.
  • Speaking with both new and established franchisees can provide your attorney with insight into the consistency and quality of support.
  • Your accountant can review the franchisor's financial statements to assess if they are reinvesting sufficiently to support their system.
Citations: Not applicable

New/Unproven Franchise System

Low Risk

Explanation

This risk was not identified in the FDD package. UG Franchise began offering franchises in 2013 and discloses a history as the LA Boxing brand before that, indicating it is not a new or unproven system. Investing in a new franchise without a significant operating history can be risky, as the business model may be untested and support systems underdeveloped, leading to a higher potential for failure.

Potential Mitigations

  • Your business advisor should help you verify the operating history of any franchise system you consider.
  • It is wise to have your attorney review the experience of the management team listed in Item 2 for any franchise.
  • An accountant can analyze the financial statements in Item 21 to see if a newer system has adequate financial backing.
Citations: Not applicable

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The UFC GYM concept is based on the established fitness industry, combining mixed martial arts with traditional gym services. A fad business is one tied to a short-lived trend, which can be risky as your contractual obligations continue even if consumer interest disappears. This concept appears to have a broader, more sustainable market appeal.

Potential Mitigations

  • For any franchise, research the long-term consumer demand for its products or services with the help of a business advisor.
  • Your accountant can help you assess the business model's resilience to economic shifts and changing consumer tastes.
  • Review the franchisor's plans for innovation and brand development with your attorney to gauge their focus on long-term viability.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified in the FDD package. The executive team detailed in Item 2, including the CEO who has been with the company since 2008, appears to have significant experience in the fitness industry and with the franchise system. Inexperienced management can be a major risk, potentially leading to poor strategic decisions and inadequate support for franchisees.

Potential Mitigations

  • A business advisor can help you investigate the backgrounds of the key executives of any franchisor you consider.
  • You should always ask current franchisees about their perception of the management team's competence and support.
  • Your attorney can review the litigation history in Item 3 for any lawsuits involving management's conduct.
Citations: Not applicable

Private Equity Ownership

High Risk

Explanation

Item 1 discloses that UG Franchise and its affiliates are part of a family of private equity-funded companies. This ownership structure can introduce risks, as private equity firms may prioritize short-term financial returns over the long-term health of the franchise system. This could potentially lead to increased fees, reduced franchisee support, or pressure to use specific vendors to maximize profitability for the ownership group.

Potential Mitigations

  • A business advisor can help you research the private equity firm's reputation and track record with other franchise systems.
  • It is important to ask current franchisees about any changes in system direction, fees, or support since the private equity acquisition.
  • Your attorney should review the Franchise Agreement for clauses that allow the franchisor to easily sell the system, which is common with PE ownership.
Citations: Item 1

Non-Disclosure of Parent Company

Medium Risk

Explanation

The FDD discloses the parent company, Ultimate NeV, LLC, but does not include its financial statements. While the franchisor entity itself is now profitable, its history of significant accumulated deficits makes the financial strength of its parent relevant to assessing overall stability and the ability to provide long-term support. Without the parent's financials, you have an incomplete picture of the entire corporate structure's financial health.

Potential Mitigations

  • Your accountant should review the franchisor's financials carefully to assess its standalone viability and reliance on its parent.
  • An attorney can help you understand the legal relationship and obligations between the franchisor and its parent company.
  • You should ask the franchisor why the parent company's financials are not included, especially given the explicit risk warning on financial condition.
Citations: Item 1, Item 21, Exhibit H

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. The franchisor properly discloses in Item 1 that it previously operated under the 'LA Boxing' brand. A franchisor's failure to adequately disclose or downplaying negative history from a predecessor entity can hide systemic issues. In this case, the disclosure appears to be present and straightforward.

Potential Mitigations

  • When evaluating a franchise, your attorney should always scrutinize Item 1 for any mention of predecessor companies.
  • If a predecessor exists, a business advisor can help you conduct independent research into that entity's history and reputation.
  • Asking long-term franchisees about their experience under any previous ownership or brand name can provide valuable insights.
Citations: Not applicable

Pattern of Litigation

High Risk

Explanation

Item 3 discloses a pattern of litigation initiated by former franchisees alleging serious claims such as fraud, deceptive trade practices, and breach of contract. Notably, these cases resulted in the franchisor making significant settlement payments to the franchisees, including amounts of $275,000 and $125,000. This history suggests potential systemic issues in the franchise sales process or in the franchisor-franchisee relationship, representing a major risk.

Potential Mitigations

  • Your attorney must carefully review the details of all litigation disclosed in Item 3 to understand the nature and resolution of the claims.
  • It is critical to treat a history of franchisee lawsuits alleging fraud as a significant red flag.
  • A business advisor can help you frame questions for the franchisor and other franchisees regarding the issues that led to this litigation.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
4
1
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

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3

Financial & Fee Risks

Total: 10
4
4
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
9
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.

5

Territory & Competition Risks

Total: 5
3
1
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.

6

Regulatory & Compliance Risks

Total: 10
4
3
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
6
8
4

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: 2
2
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.