World Options
Initial Investment Range
$88,600 to $97,600
Franchise Fee
$65,000
As a World Options franchisee, you will establish and operate a business that offers domestic and international shipping and freight services and that may include other transportation services we develop using one or more international or domestic carrier companies under the World Options trademark.
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World Options March 28, 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, World Options, Inc. (WOI), has a precarious financial position. Audited financials in Exhibit C show significant net losses for the past three years, negative operating cash flow, and a stockholder's deficit exceeding $2 million. Note 8 confirms these issues and reliance on parent/stockholder financing to continue operations. This raises substantial doubt about WOI's ability to support you or sustain itself without continued funding, which is not guaranteed.
Potential Mitigations
- Your accountant must conduct a thorough review of the audited financial statements, including all footnotes and cash flow statements, to assess the franchisor's viability.
- In discussions with your attorney, clarify the nature and any formal commitment of the parent company's financial support.
- It is critical to ask current franchisees about any impact the franchisor's financial condition has had on support services, with guidance from your business advisor.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a concerning pattern of franchisee exits. Analysis of the tables shows annual franchisee churn rates between 17% and 25% of the starting base over the last three years, which may be considered high for a small system. Furthermore, Item 19 notes that at least two closed franchises were excluded from the financial performance data. This turnover suggests potential issues with franchisee profitability, satisfaction, or the business model's viability.
Potential Mitigations
- A comprehensive discussion with your accountant is needed to analyze the franchisee turnover rates and their potential implications for your own business's success.
- Your attorney can help you formulate specific questions for the franchisor and former franchisees regarding the reasons for these closures and non-renewals.
- Contacting former franchisees listed in Exhibit B-1 is essential to understand their experiences and reasons for leaving the system.
New/Unproven Franchise System
High Risk
Explanation
WOI began offering franchises in the U.S. in October 2017 and, as of year-end 2024, had only six operating franchised outlets. The 'Special Risks' section explicitly notes the franchisor's short operating history. This limited track record in the U.S. means the business model, support systems, and brand recognition are still developing, which could present a greater risk to your investment compared to a more established franchise system.
Potential Mitigations
- Careful evaluation of the management team's prior experience in both franchising and the logistics industry is warranted; a business advisor can assist with this.
- You should speak with the earliest U.S. franchisees listed in Item 20 to gauge the evolution and effectiveness of the franchisor's support systems.
- Your accountant can help assess if the franchisor is adequately capitalized to support growth and overcome early-stage challenges.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. A fad business is one tied to a short-lived trend, which can be a significant risk. If consumer interest wanes, your business could fail even if your contractual obligations to the franchisor continue for many years. Assessing the long-term, sustainable demand for a franchise's core products or services is a crucial part of due diligence before investing in any system, especially a new one.
Potential Mitigations
- A business advisor can help you research the industry to determine if the core services have long-term, stable demand or are tied to a recent trend.
- Discuss the franchisor's plans for future innovation and adaptation with existing franchisees to gauge the system's long-term vision.
- Your financial advisor should be consulted to model the business's potential performance under various market conditions, including shifts in consumer interest.
Inexperienced Management
Medium Risk
Explanation
While some executives have experience with affiliate brands, several key personnel listed in Item 2 have only recently joined WOI itself, some in 2024 or 2025. While they have roles at parent and affiliate companies, their tenure directly managing this specific U.S. franchise operation is limited. This could present challenges as the U.S. system grows and requires dedicated, experienced leadership familiar with its unique market and franchisee needs.
Potential Mitigations
- A business advisor can help you thoroughly vet the management team's background and specific experience in managing a U.S.-based logistics franchise system.
- It is important to ask current franchisees about the quality and responsiveness of the current management team.
- During discussions with the franchisor, you might inquire about the stability of the leadership team and their long-term commitment to the brand.
Private Equity-Style Ownership
Medium Risk
Explanation
Item 1 discloses that WOI is part of a large, complex international structure owned by MBE Worldwide S.p.A. This entity owns several other franchise brands, including PostNet and AlphaGraphics. Such a structure could mean that strategic decisions are made to benefit the overall portfolio rather than focusing solely on the long-term health of the World Options brand. It also creates a risk of resources being shifted between brands, potentially affecting the support you receive.
Potential Mitigations
- Researching the parent company's track record with its other franchise systems can provide insight into their management style; a business advisor can assist.
- Speaking with franchisees from the affiliated brands (PostNet, AlphaGraphics) may offer perspective on how the parent company manages its different systems.
- Your attorney should review the assignment clauses in the Franchise Agreement to understand what happens if the parent company sells the World Options brand.
Non-Disclosure of Parent Company Financials
Medium Risk
Explanation
The FDD discloses that WOI is a subsidiary of World Options Limited (WOL) and ultimately MBE Worldwide S.p.A. However, the provided financials are only for WOI, the U.S. franchisor entity. Given WOI's weak financial state and reliance on its parent for funding, the absence of parent company financial statements makes it difficult to fully assess the stability and capacity of the ultimate entities that are backing your investment. The strength of this support system remains unverified.
Potential Mitigations
- Your attorney should inquire if financial statements for the parent company, which is funding operations, can be provided for a complete financial picture.
- An accountant should be engaged to analyze the existing financials and the specific risks associated with a subsidiary relying on an unverified parent entity.
- Discussing the nature and history of parent company support with existing franchisees may provide valuable context.
Predecessor History Issues
Low Risk
Explanation
Item 1 states that WOI does not have any predecessors. This means the entity itself is the one that has been operating and offering franchises since its inception. Therefore, there are no predecessor histories regarding litigation, bankruptcy, or franchisee turnover to analyze. This simplifies due diligence in this specific area, as the focus remains solely on the performance and history of World Options, Inc.
Potential Mitigations
- You should confirm with your attorney that the definition of 'predecessor' has been correctly applied by the franchisor.
- A business advisor can still help you research the history of the key individuals in Item 2, as their past activities can be relevant.
- Focus your due diligence on the disclosed history of World Options, Inc. itself, including its financials and franchisee turnover data, with your accountant.
Pattern of Litigation
Low Risk
Explanation
Item 3 states that no litigation is required to be disclosed. While this is positive on its face, it is not a guarantee of a problem-free system. This disclosure means there have been no recent or pending lawsuits meeting the specific legal criteria for disclosure under franchise law. It does not rule out the possibility of past disputes that were settled before a lawsuit was filed or other issues that did not lead to litigation.
Potential Mitigations
- Your attorney should confirm the scope of the litigation disclosure to ensure it complies with federal and state requirements.
- It is still crucial to conduct due diligence by speaking with current and former franchisees about any disputes or issues they may have experienced.
- A business advisor can help you search for online reviews or news articles that might mention informal disputes not captured in Item 3.
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
Unlock Full Risk Analysis
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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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.