Explanation

This risk was not identified in the FDD package. Item 20 data for the last three years shows a very low number of terminations, non-renewals, or other cessations. High franchisee turnover can be a major red flag, often indicating systemic problems such as a lack of profitability, insufficient franchisor support, or franchisee dissatisfaction. Weed Man's disclosed turnover rates appear low.

Potential Mitigations

• It is still valuable to contact a random sample of current and former franchisees from the list in Exhibit D to discuss their experiences.
• A discussion with your business advisor can help you formulate key questions for these franchisees about their satisfaction and profitability.
• Your accountant can help you analyze the Item 20 data and footnotes to confirm the low turnover rate.

Explanation

This risk was not identified. FDD Item 20 data does not indicate excessively rapid growth that might outpace the franchisor's ability to provide support. While steady growth is present, it does not appear to be at a rate that would typically strain support systems. Uncontrolled growth can sometimes lead to diluted brand quality and insufficient franchisee assistance.

Potential Mitigations

• During calls with existing franchisees, asking about the current quality and responsiveness of franchisor support is always a good practice.
• Your business advisor can help you assess if the franchisor's support infrastructure, as described in Item 11, seems adequate for its size.
• Reviewing the franchisor's financial investment in support services with your accountant can offer additional insight.

Explanation

This risk is not present. The FDD indicates that Turf Holdings Inc. (THI) has been franchising since 1995, and the underlying "Weed Man" brand has been operating in Canada since the 1970s. This is a mature and well-established franchise system, not a new or unproven one. Investing in a new system can carry higher risks due to unproven models and support structures.

Potential Mitigations

• Even with an established system, it is beneficial to speak with long-term franchisees about the system's evolution and the franchisor's adaptability.
• A business advisor can help you understand the competitive landscape for a mature brand in your target market.
• Your attorney can confirm the history and corporate lineage disclosed in Item 1.

Explanation

This risk was not identified. The franchise operates in the lawn care, mosquito, and pest control industries, which are established service sectors with consistent consumer demand. This is not a business model based on a new or fleeting trend. A fad-based business carries a high risk of failure once public interest wanes, even if franchise agreement obligations continue.

Potential Mitigations

• A business advisor can help you research the long-term demand and competitive environment for lawn and pest control services in your specific local market.
• Assessing local environmental regulations and consumer preferences regarding chemical treatments with a local expert is advisable.
• Your accountant can help you model the financial seasonality of such a business.

Explanation

This risk is not present. FDD Item 2 describes a management team with extensive, long-term experience within the Weed Man system, with key executives having been involved since 1995. Inexperienced leadership can pose a significant risk to a franchise system's stability and the quality of support provided to franchisees.

Potential Mitigations

• It is always a good practice to ask current franchisees about their direct experiences and impressions of the leadership team's competence and vision.
• A business advisor can help you research the reputations of the key executives within the broader franchise industry.
• Your attorney can verify the backgrounds of the management team members as disclosed.

Explanation

This risk was not identified in the FDD. Item 1 indicates ownership is held by a Canadian parent corporation associated with the system's founders and former sub-franchisors, not by a private equity firm. Private equity ownership can sometimes introduce risks related to short-term profit motives over the long-term health of the brand.

Potential Mitigations

• During franchisee calls, asking about any changes in company culture or focus following the 2025 ownership consolidation is still worthwhile.
• Your attorney can help you understand the implications of the franchisor's right to assign the Franchise Agreement, regardless of ownership structure.
• A business advisor can help research the parent company's history and operational philosophy.

Explanation

This risk is not present. FDD Item 1 clearly discloses the existence and identity of its parent corporation and other affiliates. A failure to disclose a controlling parent company can obscure the true financial backing and stability of a franchise system.

Potential Mitigations

• Your attorney should review the corporate structure disclosed in Item 1 to ensure it is clear.
• An accountant can assess whether the provided franchisor financials are sufficient for a risk assessment, even without parent company financials.
• Understanding the relationship and dependencies between the franchisor and its parent, as described in Item 1, is advisable.

Explanation

This risk was not identified. FDD Item 1 states that THI has no predecessors, and it clearly explains its relationship with its Canadian affiliate and that affiliate's predecessor. There is no indication of a problematic or obscured history. Inadequate disclosure about a predecessor's history could hide past issues like bankruptcies or high franchisee failure rates.

Potential Mitigations

• Reviewing the corporate history in Item 1 with your attorney is a standard due diligence step.
• Asking long-tenured franchisees about the transition from any prior entities can provide historical context.
• A business advisor can help you research the history of the brand in North America.

Explanation

This risk is not present. FDD Item 3 states that there is no litigation that requires disclosure. A pattern of lawsuits, especially those initiated by franchisees alleging fraud or misrepresentation, is a significant red flag. The lack of such disclosed litigation is a positive indicator for the franchisor's relationships with its franchisees.

Potential Mitigations

• Even with a clean FDD disclosure, it is prudent to ask current and former franchisees about their experiences with disputes and resolutions.
• Your attorney can perform an independent public records search for litigation involving the franchisor as a precautionary measure.
• Reviewing the dispute resolution clauses in Item 17 with your attorney is important to understand the process if a conflict does arise.