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How much does Viyada Thai Spa cost?
Initial Investment Range
$311,400 to $468,350
Franchise Fee
$35,940 to $37,140
The franchisee will own and operate a premium massage therapy spa offering both western and traditional, authentic Thai massage services and related goods and services.
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Viyada Thai Spa January 14, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 22, 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
VIYADA FRANCHISE GROUP INC. (Viyada) is a new entity with no operating history. Its financial statement in Exhibit C is an opening balance sheet showing minimal cash ($17,732) and no revenue. This lack of financial history and thin capitalization raises significant questions about its ability to fund operations, provide promised support, or withstand financial challenges without relying completely on new franchise fees, which is an unsustainable model. This represents a substantial risk to your investment.
Potential Mitigations
- Your accountant must carefully review the provided balance sheet and the financials of the affiliate, KP Thai Group, Inc., to assess the overall financial stability of the enterprise.
- In discussions with the franchisor, ask for detailed information about their capitalization and funding sources for supporting the franchise system.
- It is advisable to ask your attorney if a performance bond or fee escrow account is required or could be negotiated to protect your initial fees.
High Franchisee Turnover
High Risk
Explanation
As a new franchisor that only began offering franchises in January 2025, Viyada has no history of franchisee turnover. The tables in Item 20 show zero franchised outlets opened, terminated, or transferred. While this is expected for a startup, it means there is no data to assess franchisee satisfaction, profitability, or the long-term viability of the business model from the perspective of other franchisees. This lack of a track record represents a significant information gap.
Potential Mitigations
- A business advisor can help you evaluate the risks of investing in an unproven system with no franchisee track record.
- It is essential that your accountant helps you create conservative financial projections, as there is no franchisee performance data to rely upon.
- Consult with your attorney about negotiating more favorable terms to compensate for the higher risk of being an early franchisee.
Rapid System Growth
High Risk
Explanation
Viyada is a new franchisor with plans for new outlets but no existing franchise-support infrastructure tested by a growing system. The risk, common to new systems, is that support resources may not scale adequately with franchise sales. Given the franchisor's minimal capitalization shown in Item 21, its ability to build out necessary support teams for training, marketing, and operations as the system grows is a significant concern that could impact your business.
Potential Mitigations
- A business advisor can help you question the franchisor about their specific, budgeted plans for scaling support staff and infrastructure as more units are sold.
- It would be prudent to ask your accountant to review the franchisor's capitalization to determine if it appears adequate to support initial growth.
- Your attorney can help assess the contractual support obligations to see if they are specific and enforceable.
New/Unproven Franchise System
High Risk
Explanation
Viyada is a new, unproven franchise system, having been formed in August 2024 and starting to offer franchises in January 2025. The FDD explicitly lists "Short Operation History" as a special risk. You would be one of the first franchisees. This presents higher risks, including an untested business model in a franchise context, undeveloped support systems, and minimal brand recognition, all of which could impact your potential for success.
Potential Mitigations
- You should have a business advisor help you conduct extensive due diligence on the viability of the business model and the market.
- A thorough review of the affiliate's operating history with your accountant is critical to understand the underlying business.
- Seeking more favorable terms, such as reduced royalties for an initial period, is something your attorney could attempt to negotiate to offset the higher risk.
Possible Fad Business
Medium Risk
Explanation
The business operates in the premium massage and spa industry, which is a competitive and established market. While authentic Thai massage is described as a differentiator, the long-term sustainability and consumer demand for this specific niche should be carefully evaluated. There is a risk that niche wellness concepts can be subject to shifting consumer trends, and you should consider the business's resilience to economic downturns or changes in discretionary spending habits.
Potential Mitigations
- Engage a business advisor to conduct independent market research on the long-term demand for premium and niche massage services in your specific area.
- It is wise to ask the franchisor about their plans for service innovation and adaptation to evolving market trends.
- Developing a business plan with your accountant that includes contingency planning for shifts in consumer discretionary spending is advisable.
Inexperienced Management
Medium Risk
Explanation
The management team listed in Item 2 has experience operating an affiliated spa business since 2013. However, the franchisor entity is new, and the FDD does not specify if the management has prior experience in managing a franchise system, which involves different skills like training, support, and system-wide brand management. This potential lack of direct franchising experience could create challenges in providing effective support to franchisees as the system grows.
Potential Mitigations
- It would be beneficial to have a business advisor help you interview the management team about their specific experience and strategy for supporting a franchise network.
- Discussing the backgrounds of the key personnel with your attorney can help assess their qualifications for running a franchise company.
- You should inquire whether the franchisor has engaged any experienced franchise consultants to guide their initial launch and development.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 does not indicate that the franchisor is owned or controlled by a private equity firm. This is important because private equity ownership can sometimes lead to strategies focused on short-term returns, which may not always align with the long-term health of franchisees' businesses. The absence of this ownership structure can be a positive factor for system stability.
Potential Mitigations
- It is always a good practice to have your attorney verify the franchisor's ownership structure and identify all controlling parties.
- A business advisor can help you research the reputation and track record of any major investors or parent companies involved in a franchise system.
- Understanding the franchisor's long-term goals and exit strategy is a key topic to discuss with them directly.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor does not appear to have a parent company. An affiliate, KP Thai Group, Inc., is disclosed, which owns the trademarks and operates a similar business. The franchisor entity, Viyada Franchise Group Inc., is a newly formed, thinly capitalized company, and its financial weakness is a significant risk on its own, but there is no indication of a parent company whose financials might be required or missing.
Potential Mitigations
- Your accountant should analyze the financial relationship and any inter-company agreements between the franchisor and its affiliate.
- It is advisable for your attorney to confirm the corporate structure and ensure there are no undisclosed parent entities with control.
- Understanding the franchisor's reliance on its affiliate for services or intellectual property is a crucial discussion to have with a business advisor.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 states that the franchisor has no predecessors. This is consistent with it being a newly formed entity. While this means there is no negative history to hide, it also means there is no historical system data from a predecessor to analyze, which is a risk captured under the 'New/Unproven Franchise System' analysis.
Potential Mitigations
- Your attorney should verify the franchisor's statements regarding predecessors through public record searches if there is any reason for concern.
- A business advisor can help you assess the risks of a system without a predecessor, which is effectively a startup.
- Asking the affiliate's long-term employees about the business's history can sometimes provide valuable context.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 3 states that no litigation is required to be disclosed. The absence of litigation, especially claims of fraud or misrepresentation from other franchisees, is a positive indicator. However, as a new franchisor with no existing franchisees, this is expected. You should monitor future FDDs for any changes in this area.
Potential Mitigations
- Your attorney can conduct independent public record searches to verify the absence of material litigation against the franchisor or its principals.
- It is good practice to ask management directly if they are aware of any pending or threatened litigation not yet disclosed.
- A business advisor can help you establish a process for reviewing the franchisor's annual FDD updates for any new litigation disclosures.
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