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How much does World Inspection Network cost?
Initial Investment Range
$37,575 to $45,500
Franchise Fee
$24,750 to $25,500
World Inspection Network International LLC offers franchises to operate a home inspection business for single and multi-family residences.
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World Inspection Network April 22, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor’s 2024 audited financials show a significant decline in financial health. Net income dropped from $560,831 in 2023 to just $511 in 2024, and operating income was negative (-$88,617). Cash and member's equity also decreased substantially. This financial weakening is a material concern as it may impair the franchisor's ability to support you, invest in the brand, and maintain long-term viability, increasing your investment risk.
Potential Mitigations
- A franchise accountant should perform a deep analysis of the multi-year financial statements, including all footnotes, to assess the franchisor's stability.
- Discuss the sharp decline in profitability and negative operating income with the franchisor to understand the causes and their remediation plan.
- Your attorney should investigate if any financial performance bonds or escrow accounts are required by the state due to these weakened financials.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a significant rate of franchisee churn. In 2024, 28 franchises ceased operations (10 terminations, 6 non-renewals, 12 ceased for other reasons) from a starting base of 268, an annual churn rate over 10%. A similar rate occurred in 2023. This consistently high turnover is a major red flag that could indicate systemic problems such as franchisee unprofitability, dissatisfaction with the system, or inadequate franchisor support.
Potential Mitigations
- Your accountant must help you analyze the three-year turnover data to calculate the precise churn rate and its potential financial implications.
- It is critical to contact a significant number of former franchisees listed in Exhibit D to understand their specific reasons for leaving the system.
- A business advisor can help compare this turnover rate to available industry benchmarks to determine if it is unusually high for this sector.
Rapid System Growth
Low Risk
Explanation
The risk of rapid, unsupported growth was not identified. The system shows modest net growth, with 3 net new outlets in 2024. Uncontrolled expansion 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. A stable growth rate is generally a positive indicator for the health and sustainability of a franchise system.
Potential Mitigations
- A business advisor can help you analyze the system's growth trajectory in Item 20 relative to the support staff listed in Item 2.
- Engaging with a range of franchisees, from new to established, can provide insight into the consistency and quality of franchisor support.
- An accountant's review of the franchisor's financials can help determine if they are investing adequately in support infrastructure.
New/Unproven Franchise System
Medium Risk
Explanation
World Inspection Network International LLC (WIN LLC) acquired the system in 2018 from a predecessor operating since 1995. The current management team largely took over at that time. While the system itself is mature, the current leadership has been in place for about six years. This presents a risk associated with a newer management team operating an established brand, which could lead to changes in strategy, support, or operational focus that differ from the system's historical performance.
Potential Mitigations
- A business advisor should help you evaluate the management team's experience in franchising and in the home inspection industry.
- Contacting franchisees who have been in the system both before and after the 2018 ownership change can provide valuable perspective on management.
- Your attorney can help you understand any ongoing obligations or inherited issues from the predecessor company.
Possible Fad Business
Low Risk
Explanation
The risk of the business being a fad was not identified. Home inspection services are a well-established and necessary component of the real estate transaction process, tied to a durable market rather than a fleeting trend. A fad business carries the risk that consumer interest will decline, potentially leaving you with a worthless investment and ongoing contractual obligations long after the trend has passed. This business model appears to have long-term market relevance.
Potential Mitigations
- A business advisor can help you research the long-term stability and economic outlook for the home inspection industry.
- It is wise to assess the company's plans for adapting to new technologies and market changes by reviewing Item 11 with a business advisor.
- Your accountant can help you model the business's resilience to fluctuations in the real estate market.
Inexperienced Management
Medium Risk
Explanation
The current franchisor, WIN LLC, and its parent, Agamya Franchise Holdings LLC, took over the system in 2018. Item 2 shows that key executives joined at that time, primarily from a private equity and investment background rather than extensive, long-term home inspection franchising experience. While they retained one manager from the predecessor, the overall leadership is relatively new to managing this specific franchise system, which could impact the quality of operational guidance and support.
Potential Mitigations
- With a business advisor, you should thoroughly vet the management team's specific experience in successfully operating a franchise system.
- Inquiring with franchisees about the quality and relevance of the support provided since the 2018 management change is crucial.
- Your attorney can help you ask targeted questions about how their management philosophy has impacted the system.
Private Equity Ownership
Medium Risk
Explanation
The franchisor's parent company, Agamya Franchise Holdings LLC, appears to be a private capital firm. Private equity ownership can introduce risks, as decisions may prioritize short-term investor returns over the long-term health of franchisees. This could manifest as increased fees, reduced support to cut costs, or pressure to grow the system too quickly. The Franchise Agreement also grants WIN LLC broad rights to sell the system, which is a common strategy for PE firms.
Potential Mitigations
- A business advisor can help you research the ownership group's track record with other service-based or franchise businesses.
- It is important to ask current franchisees about any changes in culture, support, or fees since the 2018 acquisition.
- Your attorney should review the assignment clauses in the Franchise Agreement to understand your rights if the system is sold again.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified. The FDD clearly discloses the parent company, Agamya Franchise Holdings LLC, in Item 1. Furthermore, the franchisor has provided its own audited financial statements in Item 21. In some cases, a franchisor might be a new or thinly capitalized entity, making the financial health of its parent company a critical piece of information for a prospective franchisee. The failure to disclose a parent or provide its financials when required can obscure significant risks.
Potential Mitigations
- Always have your attorney confirm the corporate structure and identify all parent and affiliated companies involved.
- If a parent company guarantees the franchisor's obligations, your accountant should insist on reviewing the parent's financial statements.
- A business advisor can help investigate the operational role of any parent company to assess its influence on the franchise system.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified. The FDD discloses that WIN LLC acquired the system from a predecessor in 2018 and provides some history. The predecessor's litigation and bankruptcy history are also disclosed as having no relevant events. Omitting or downplaying a predecessor's negative history can hide systemic problems that may have been inherited by the new franchisor. It is a positive sign that this information appears to be disclosed as required.
Potential Mitigations
- An attorney should always carefully review the disclosed history of any predecessor entities in Items 1, 3, and 4.
- It is beneficial to speak with long-term franchisees who operated under the predecessor to understand the system's history and evolution.
- A business advisor can help you research the public record of any predecessor company for additional context.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified. Item 3 discloses one litigation case initiated by the franchisor against a former franchisee for a non-compete violation, which is not unusual. The FDD does not reveal a pattern of litigation initiated by franchisees alleging fraud, misrepresentation, or breach of contract. A history of such claims would be a major red flag, suggesting potential systemic issues with the franchisor's sales process, support obligations, or overall business practices.
Potential Mitigations
- Your attorney should always carefully review the details of any litigation disclosed in Item 3, whether initiated by or against the franchisor.
- A business advisor can help you research online for any informal franchisee complaints or disputes that did not result in litigation.
- Asking current franchisees about their relationship with the franchisor can provide context beyond the formal 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