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Yummi Go Gourmet
How much does Yummi Go Gourmet cost?
Initial Investment Range
$26,370 to $279,320
Franchise Fee
$5,000 to $50,000
The franchise is for a GBC Food Services, LLC, d/b/a Yummi Go Gourmet kiosk.
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Yummi Go Gourmet January 27, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: August 21, 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 2024 audited financial statements reveal a significant risk. GBC Food Services, LLC (GBC) has a negative members' deficit of over $8.8 million. While profitable in the most recent year, this negative net worth, driven by large distributions and related-party transactions, may indicate financial instability. This could potentially impact GBC's ability to provide support or invest in the system, posing a risk to your investment.
Potential Mitigations
- Your accountant must conduct a thorough analysis of all financial statements, including the statement of members' deficit and all related footnotes.
- Discuss the implications of the negative net worth and large distributions with a financial advisor to assess long-term stability.
- An attorney should help you understand any financial assurances, like bonds or escrow, that might be required by state law due to this financial condition.
High Franchisee Turnover
High Risk
Explanation
Item 20 data reveals a very high rate of franchisee departures. In 2023, the turnover rate was over 31% when accounting for terminations, franchisor reacquisitions, and other cessations. In 2024, the rate was over 11%. These figures are significant and may suggest systemic problems, such as franchisee unprofitability or dissatisfaction with the business model or franchisor support. This level of churn is a major red flag for prospective franchisees.
Potential Mitigations
- It is critical to contact a significant number of former franchisees from the list in Exhibit E to understand their reasons for leaving the system.
- Your accountant should analyze the multi-year turnover data to confirm these high churn rates.
- An attorney can help you frame specific questions to ask the franchisor regarding the high number of terminations and cessations.
Rapid System Growth
Medium Risk
Explanation
The system experienced a significant increase in franchised outlets, growing by 142 units in 2024. This rapid expansion, especially when viewed alongside the franchisor's significant negative net worth, could strain its resources. A risk exists that GBC's support infrastructure, including training and operational assistance, may not be able to keep pace with the growth, potentially leading to inadequate support for you and other franchisees.
Potential Mitigations
- Engage a business advisor to question the franchisor about their plans and capacity for scaling support infrastructure to match this growth.
- A thorough discussion with current franchisees about the quality and responsiveness of existing support is essential.
- Your accountant should review the financial statements to assess if GBC has the capital to support this expansion.
New/Unproven Franchise System
High Risk
Explanation
The FDD discloses that GBC has a limited operating history in franchising, having transitioned from an independent contractor model in 2022. This is explicitly stated as a 'Special Risk'. A newer franchise system carries inherent risks, including potentially unproven support systems, minimal brand recognition in some markets, and operational models that are still being refined. The high franchisee turnover and negative net worth amplify these risks.
Potential Mitigations
- A business advisor can help you conduct extensive due diligence on the management team's prior experience in both the food kiosk industry and in franchising.
- Speaking with the earliest franchisees in the system is crucial to understand their experience with the evolving support structure.
- Your attorney may be able to negotiate more favorable terms to compensate for the higher risk associated with a newer system.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD package. A 'fad' business is one tied to a fleeting trend, which can threaten long-term viability after public interest declines. Assessing whether a business concept has staying power versus being a short-lived novelty is a crucial part of due diligence, as your contractual obligations will outlast the trend.
Potential Mitigations
- A business advisor can help you independently research the long-term market demand for sushi and Pan-Asian food kiosks.
- Evaluating the franchisor's plans for innovation, menu development, and adaptation is a key discussion to have with management.
- Consider the business model's resilience to economic shifts and changing consumer tastes with your financial advisor.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD package. Key executives appear to have been with the company or in the food service industry for a number of years. However, a lack of specific experience in managing a franchise system, as opposed to just company-owned units, can pose a risk. Inexperienced franchise management may lead to inadequate support systems, poor strategic decisions, and a failure to understand franchisee needs.
Potential Mitigations
- A business advisor should help you thoroughly vet the management team's background, focusing on their experience managing franchise systems specifically.
- In discussions with current franchisees, inquire specifically about the quality of support and the management's understanding of franchisee challenges.
- It is prudent to ask the franchisor directly if they have engaged experienced franchise consultants to guide their strategy.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD package, as Item 1 does not indicate ownership by a private equity firm. When PE firms own a franchisor, they may prioritize short-term investor returns over the long-term health of the system. This can sometimes lead to increased fees, reduced franchisee support, or pressure to use affiliated vendors.
Potential Mitigations
- If a franchisor is owned by a private equity firm, a business advisor should help you research the firm's track record with other franchise brands.
- Speaking with franchisees about any changes in culture or support since a PE acquisition is a critical due diligence step.
- Your attorney can help assess any terms in the agreement that would be affected by a future sale of the company.
Non-Disclosure of Parent Company
Medium Risk
Explanation
GBC does not appear to have a parent company. However, the audited financial statements in Exhibit C note significant related-party transactions with other companies under common ownership, such as Aung Enterprise, LLC, which acts as the landlord. The financial health and dealings of these related entities can directly impact the franchisor and your business, and these relationships create potential conflicts of interest.
Potential Mitigations
- Your accountant must carefully review all related-party transactions detailed in the footnotes of the financial statements.
- An attorney should help you understand the legal and financial implications of these interconnected business relationships.
- Inquire about the nature of these relationships and how conflicts of interest are managed with your business advisor.
Predecessor History Issues
Low Risk
Explanation
Item 1 states that the franchisor does not have any predecessors. A predecessor is a prior company from which the franchisor acquired its business. When predecessors exist, it is important to review their history for issues like litigation, bankruptcy, or high franchisee turnover, as these could indicate historical problems with the system that may continue under the current franchisor.
Potential Mitigations
- Your attorney should confirm the franchisor's statement regarding the absence of predecessors.
- A business advisor can help research the franchisor's history to ensure no prior entities were operating the same system under a different name.
- If a predecessor were identified, speaking with long-term franchisees about their experience under previous ownership would be crucial.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses two significant government enforcement actions against GBC for violating state franchise laws. Both Washington and California took action against the company for selling franchises without providing an FDD and without being properly registered. This resulted in fines, a cease-and-desist order, and a requirement to engage an independent monitor in California. This pattern suggests a past disregard for fundamental franchise regulations, which is a major red flag.
Potential Mitigations
- Your attorney must carefully review the details and outcomes of the litigation disclosed in Item 3.
- A business advisor should help you ask the franchisor direct questions about these past compliance failures and the steps taken to rectify them.
- This history of regulatory non-compliance should be considered a very serious risk to your investment.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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.
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