Explanation

This risk was not identified in the FDD package. Rapid system growth can strain a franchisor's ability to provide adequate support. While the system shows steady growth, the number of new openings is not so extreme as to suggest support infrastructure would be overwhelmed, especially since there are no company-owned stores competing for resources. However, you should still evaluate the quality of support with existing franchisees.

Potential Mitigations

• Questioning the franchisor about their plans for scaling support systems to match franchisee growth can provide valuable insight.
• Engaging a business advisor to help assess whether the franchisor’s corporate infrastructure, as described in Item 2, can support the existing and projected number of units is a prudent step.
• Your accountant can review financial statements to determine if sufficient funds are being reinvested into support services.

Explanation

This risk was not identified in the FDD package. Workout Anytime began franchising in December 2005 and has a substantial operating history with nearly 200 locations. The system is well-established and not considered new or unproven. A long history provides a track record that can be more reliably evaluated through discussions with current and former franchisees, reducing the risks associated with an unproven business model.

Potential Mitigations

• Even with an established system, it is wise to consult with a business advisor to review its long-term competitive position in the fitness industry.
• An attorney can help you review the FDD for any recent fundamental changes to the business model that could introduce new, unproven elements.
• Speaking with long-term franchisees can provide perspective on how the system has evolved and adapted over time.

Explanation

This risk was not identified in the FDD package. The business model of a 24-hour fitness club is a well-established concept within the health and fitness industry and is not based on a recent or fleeting trend. The long history of the franchisor and the general market for fitness services suggest this is not a fad business, which reduces the risk of a sudden decline in consumer demand due to novelty wearing off.

Potential Mitigations

• A business advisor can help you analyze the specific competitive landscape for fitness centers in your local market to assess long-term demand.
• Reviewing Item 11 with your attorney for the franchisor's plans for system evolution can provide confidence in its ability to adapt to future market changes.
• Discuss the sustainability of the specific services offered with current franchisees to gauge customer loyalty.

Explanation

This risk was not identified in the FDD package. The executive team detailed in Item 2 generally possesses significant experience in the fitness industry and in franchising. For example, key personnel have been with the company for many years in various franchise support and operational roles. This level of experience typically provides a solid foundation for franchisee support, training, and strategic direction, which is a positive factor for a prospective franchisee.

Potential Mitigations

• It is still beneficial to discuss the management team’s accessibility and effectiveness with current franchisees.
• A business advisor can help you evaluate the specific experience of the leadership team as it relates to your own business goals.
• Your attorney can help confirm if there have been any recent, unlisted changes in key management.

Explanation

This risk was not identified in the FDD package. Item 1 properly discloses the parent company, Workout Anytime Global, LLC, which was formed in February 2025 and acquired the franchisor in April 2025. Although the parent is new and its financials are not provided, the franchisor's own audited financial statements are included as Exhibit G. This disclosure appears to follow regulatory requirements, providing transparency about the new ownership structure.

Potential Mitigations

• Your attorney can confirm that the disclosure of the parent entity and the provided financial statements meet all legal requirements.
• It's advisable to have an accountant review the franchisor's financials in light of the recent acquisition by the new parent company.
• A business advisor can help you assess any potential risks associated with the new parent company, even if disclosure is adequate.

Explanation

This risk was not identified in the FDD package. Item 1 of the FDD states that the franchisor has no predecessors. This simplifies the due diligence process, as there is no hidden history of prior corporate entities, litigation, or franchisee failures under a different company name that you would need to investigate. Your analysis can focus solely on the track record of Workout Anytime Franchising Systems, LLC.

Potential Mitigations

• Your attorney can perform a corporate records search to confirm the franchisor’s statement that no predecessor entity exists.
• Even without a predecessor, it is prudent to ask long-tenured franchisees about the company's early history and any significant transformations.
• A business advisor can help you focus your due diligence on the existing entity's complete operational and financial history.

Explanation

This risk was not identified in the FDD package. Item 3 discloses only one concluded lawsuit involving a franchisee, which was mutually dismissed. The FDD does not reveal a pattern of litigation where franchisees have alleged fraud or misrepresentation, nor does it show a high volume of lawsuits initiated by the franchisor against its franchisees. This lack of significant legal disputes is generally a positive indicator for the health of the franchise system's relationships.

Potential Mitigations

• An attorney can still conduct an independent search for litigation involving the franchisor that may not have been required to be disclosed.
• It is always a good practice to ask current and former franchisees about their experiences with disputes and how the franchisor handles disagreements.
• Ensure you understand the dispute resolution processes outlined in the Franchise Agreement with your attorney.