Zoomin Groomin
Initial Investment Range
$186,775 to $376,650
Franchise Fee
$178,775 to $376,650
We offer a franchise opportunity to you as an Area Representative to, within a designated territory, solicit, recruit, and service Zoomin Groomin unit franchises that offer mobile pet grooming and related pet care services.
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Zoomin Groomin April 30, 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
Zoomin Groomin USA LLC (Zoomin Groomin) explicitly warns of its poor financial condition. Audited financial statements confirm this, showing accelerating net losses (over $1.8M in 2024) and significant negative equity (over -$3.6M). This insolvency calls into question the company's ability to provide support or even remain in business, posing a direct threat to your investment. Several state regulators have mandated that Zoomin Groomin defer collecting initial fees due to these financial weaknesses.
Potential Mitigations
- Your accountant must conduct a thorough analysis of the audited financial statements, including footnotes, to assess the franchisor's viability.
- A discussion with your business advisor is crucial to evaluate if the business model is sustainable given the franchisor's financial state.
- It is imperative that your attorney explain the implications of investing with a company in this financial condition.
High Franchisee Turnover
Low Risk
Explanation
This risk was not identified in the FDD package. Item 20 data for Area Representatives shows no terminations, non-renewals, or cessations of business over the last three years. While a low turnover rate is generally positive, zero turnover during a period of rapid growth can sometimes warrant further inquiry during your due diligence calls with other franchisees to ensure data accuracy.
Potential Mitigations
- When speaking with franchisees, it is useful to ask about their satisfaction levels and if they are aware of any unreported departures.
- A business advisor can help you interpret system growth numbers in the context of turnover data from other franchise systems.
- Your attorney can help you formulate questions for the franchisor about franchisee success and support systems.
Rapid System Growth
Medium Risk
Explanation
The franchise system is growing very quickly, expanding from zero to 46 Area Representative outlets in just three years. This rapid expansion, combined with the franchisor's disclosed financial weakness and significant operating losses, creates a risk that its support infrastructure (training, operational assistance) may not keep pace. This could potentially dilute the quality of support you and the unit franchisees you recruit receive.
Potential Mitigations
- In your due diligence calls, ask both new and established Area Representatives about the quality and responsiveness of franchisor support.
- A business advisor can help you assess whether the franchisor has a credible plan to scale its support systems.
- Your accountant should review the financials to determine if the company is investing adequately in support infrastructure relative to its growth.
New/Unproven Franchise System
Medium Risk
Explanation
The franchisor, formed in late 2020, is a new and relatively unproven franchise system. While its management has prior experience, the Zoomin Groomin system itself lacks a long-term track record of success or profitability. Investing in a new system carries higher intrinsic risk regarding the viability of the business model and the adequacy of its developing support structures, a risk that is magnified by the company's weak financial condition.
Potential Mitigations
- Engaging a business advisor to perform deep due diligence on the long-term viability of the business concept is highly recommended.
- It is important to speak with the earliest franchisees to learn about their experiences and the evolution of the system's support.
- Your attorney may be able to negotiate more favorable terms, such as enhanced support commitments, to compensate for the higher risk.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD. Mobile pet grooming is a segment of the larger, established pet care industry. While market demands can change, the core service is not based on a short-term or fleeting trend, suggesting a more stable underlying customer need. Therefore, the risk of the business being a fad is low.
Potential Mitigations
- A discussion with a business advisor can help you evaluate the long-term market trends for pet services in your specific area.
- It is still prudent to develop a business plan that considers potential shifts in consumer spending on pet care.
- Your accountant can help you model different scenarios to understand the business's resilience to economic changes.
Inexperienced Management
Low Risk
Explanation
This risk was not identified. The executives profiled in Item 2 have prior experience in franchising, notably with Liberty Tax Service. While the nature of that experience and associated litigation is a separate, significant risk covered under 'Pattern of Litigation', the specific risk of management being inexperienced in the franchise industry itself is not present.
Potential Mitigations
- A thorough review of the management team's background, including their performance in previous roles, should be conducted with your business advisor.
- When speaking with current franchisees, asking about their direct experiences with the management team's leadership and support is a valuable exercise.
- Your attorney can help assess how management's past litigation history might impact their current business practices.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD. Item 1 discloses that the franchisor is part of the Loyalty Brands portfolio of companies. However, there is no indication that it is owned by a traditional private equity firm with a model that typically involves a short-term holding period and exit strategy, which is the focus of this specific risk.
Potential Mitigations
- It is wise to have your attorney review the corporate structure to understand the ultimate ownership and control of the franchisor.
- A business advisor can help you research the ownership group's history and track record with other businesses.
- Asking current franchisees about any changes in strategy or support since the current ownership took over can provide useful insight.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified. The FDD discloses the parent company, Loyalty, LLC, in Item 1. There is no indication that the parent company guarantees the franchisor's obligations or that its financial statements would be required for a complete risk assessment. Therefore, the specific risk of non-disclosure is not present.
Potential Mitigations
- Your attorney can confirm if the disclosures regarding parent companies and affiliates comply with franchise regulations.
- An accountant should review any disclosed affiliate transactions noted in the financial statements for potential conflicts.
- A business advisor can help research the parent company to better understand its overall strategy and health.
Predecessor History Issues
Medium Risk
Explanation
The franchisor acquired the business from a predecessor, ZG Enterprises, Inc., in 2020. However, the FDD provides no financial or operational history for this predecessor, such as its past franchisee success rates, turnover, or litigation. This lack of information on the system's performance before the acquisition makes it difficult for you to assess the brand's historical track record and potential inherited challenges.
Potential Mitigations
- You should ask the franchisor for more details regarding the predecessor's operating history and the reasons for the acquisition.
- A business advisor may be able to help you conduct independent research on the predecessor company's history.
- Seeking out and speaking with any long-term franchisees who operated under the predecessor could provide invaluable insight.
Pattern of Litigation
High Risk
Explanation
The CEO of the franchisor's parent company has an extensive and concerning litigation history from his time at a previous franchise, including allegations of breach of fiduciary duty. State addenda provide extra detail, noting that the company's former auditor, KPMG, resigned due to an "inappropriate tone at the top" and an inability to rely on management's representations. This history suggests potential governance and leadership risks that could impact the entire franchise system.
Potential Mitigations
- Your attorney must review the litigation disclosures in Item 3 and all addenda to explain the potential implications.
- A discussion with your business advisor is crucial to assess the reputational risk associated with this litigation history.
- You should directly question the franchisor about these past issues and the steps taken to ensure strong corporate governance now.
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.
