Bath Tune-Up
Home Services
Founded 202048 locationsCompany Profile
Year Founded:2020
Bath Tune-Up Franchise Cost
| Franchise Fee: | $19,950Key Metric |
| Total Investment: | $110,000 - $174,000Key Metric |
| Liquid Capital: | $27,500 |
| Royalty Fee: | 6% of gross sales |
| Marketing Fee: | 1% of gross sales |
Quick ROI Calculator
Based on Bath Tune-Up's actual financial data
Outlet Counts by Year
Historical outlet data extracted from FDD documents
Total US Locations:48
Scale relative to 1,000 locations
Franchised Units:48
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AI-Powered Due Diligence Analysis
Our advanced AI analyzes Franchise Disclosure Documents (FDDs) to identify potential risks and opportunities across 10 critical categories.
14
High Risk
Critical items
40% of total
18
Medium Risk
Monitor closely
51% of total
3
Low Risk
Manageable items
9% of total
35
Total Items
Factors analyzed
10 categories
6.57
Overall Score
Low RiskHigh Risk
010
Franchisor Stability Risks
6 risks identified
2
3
1
Limited Operating History
High
Explanation:
- Bath Tune-Up was founded in 2020, giving it a limited operating history. This short track record increases the risk of unforeseen challenges and business model vulnerabilities that may not have been fully exposed yet.
- The franchisor's ability to provide adequate support and guidance to franchisees is uncertain due to its limited experience in managing a franchise network.
Potential Mitigations:
- Thoroughly research the management team's experience and background in franchising and the home services industry.
- Speak with existing franchisees to assess their satisfaction with the support and training provided by the franchisor.
- Carefully review the franchisor's financial statements to assess its financial stability and ability to weather economic downturns.
FDD Citations:
- Item 21: Audited financial statements provide insight into the franchisor's financial health and stability.
Financial Stability Concerns (Maryland Disclosure)
High
Explanation:
- The Maryland Securities Commissioner's requirement of financial assurance due to the franchisor's financial condition raises serious concerns about Bath Tune-Up's financial stability and ability to meet its obligations.
- Deferring initial fees and payments until pre-opening obligations are met suggests potential cash flow issues for the franchisor.
Potential Mitigations:
- Carefully analyze the franchisor's financial statements (Item 21) to understand the nature and extent of the financial issues that triggered the Maryland requirement.
- Seek legal counsel to review the financial assurance mechanism and understand its implications for franchisees.
- Consider the potential impact of the franchisor's financial situation on its ability to provide ongoing support and resources.
FDD Citations:
- Item 6, Maryland Specific Disclosure: "Based on the franchisor’s financial condition, the Maryland Securities Commissioner has required a financial assurance."
- Item 21: Review the audited financial statements.
Key Account Competition
Medium
Explanation:
- The franchisor's right to reserve "Key Accounts" and allow itself, affiliates, and other franchisees to service them within a franchisee's territory without compensation creates potential competition and could impact a franchisee's revenue potential.
Potential Mitigations:
- Clarify the definition and criteria for "Key Accounts" with the franchisor.
- Negotiate a more favorable arrangement regarding Key Account servicing within your territory.
- Assess the potential impact of Key Account competition on your projected revenue and profitability.
FDD Citations:
- Item 6, Illinois Specific Disclosure: "THE FRANCHISOR RESERVES THE RIGHT TO IDENTIFY “KEY ACCOUNTS” WITHIN YOUR TERRITORY…"
Limited Geographic Presence
Medium
Explanation:
- The franchise is registered or proposed for registration in a limited number of states. This limited market penetration may indicate a lack of brand recognition and a smaller pool of potential customers compared to more established franchise systems.
Potential Mitigations:
- Research the market demand for bath remodeling services in your target territory.
- Evaluate the franchisor's marketing and advertising strategies to build brand awareness.
FDD Citations:
- Item 20: Lists states of registration and proposed registration.
Rapid Growth Potential Risks
Medium
Explanation:
- While not explicitly stated, the listing of multiple states with proposed registrations suggests potential rapid growth. Rapid expansion can strain the franchisor's resources and ability to provide adequate support to franchisees.
Potential Mitigations:
- Inquire about the franchisor's plans for managing growth and ensuring consistent support for all franchisees.
- Assess the franchisor's infrastructure and personnel to handle an increasing number of franchisees.
FDD Citations:
- Item 20: References proposed registrations in multiple states.
Choice of Law (Illinois)
Low
Explanation:
- The Franchise Agreement being governed by Illinois law may present an inconvenience for franchisees located outside of Illinois, potentially increasing legal costs and complexity in case of disputes.
Potential Mitigations:
- Consult with legal counsel to understand the implications of Illinois law governing the franchise agreement.
- Factor potential travel and legal expenses related to Illinois jurisdiction into your cost projections.
FDD Citations:
- Item 6, Illinois Specific Disclosure: "Illinois law governs the Franchise Agreement."
Disclosure & Representation Risks
2 risks identified
2
Limited Operating History
Medium
Explanation:
- Bath Tune-Up was founded in 2020, meaning it has a relatively short operating history. This presents a risk as there is limited data to assess the long-term viability and profitability of the franchise model, especially during varying economic conditions.
- The lack of extensive historical performance data makes it harder to project future earnings and assess the franchisor's ability to provide ongoing support and adapt to market changes.
Potential Mitigations:
- Thoroughly research the management team's experience and background in the home services industry. Look for evidence of prior successes and relevant expertise.
- Speak with existing franchisees to understand their experiences and assess the franchisor's support and training programs. Focus on franchisees who have been operating for the longest period.
- Carefully analyze the provided financial projections and understand the underlying assumptions. Consider engaging a financial advisor to review the information and assess the feasibility of the business model.
FDD Citations:
- While the FDD doesn't explicitly state the founding date in Item 23, this information is typically found in Item 1 or other introductory sections. Cross-reference with other available materials to confirm the founding date.
Dependence on State Regulations
Medium
Explanation:
- The FDD includes a specific addendum for California, highlighting the state's regulatory oversight of franchise offerings. This indicates that franchise operations are subject to state-specific regulations, which can vary significantly and impact the business.
- Changes in regulations, licensing requirements, or enforcement actions in specific states could affect the franchise's ability to operate or increase compliance costs.
- The California addendum explicitly states that registration does not constitute an endorsement, emphasizing the need for independent due diligence.
Potential Mitigations:
- Carefully review the state-specific addenda for your target market and understand the applicable regulations and licensing requirements.
- Consult with legal counsel specializing in franchise law to assess potential regulatory risks and ensure compliance.
- Monitor changes in relevant state regulations and factor potential compliance costs into your business plan.
FDD Citations:
- Item 23: State Specific Addenda to the Disclosure Document - California
- California Addendum: "The registration of this franchise offering... does not constitute approval, recommendation, or endorsement by the commissioner."
Financial & Fee Risks
3 risks identified
2
1
Personal Guarantee Risk
High
Explanation:
- Franchisees and their spouses are required to sign a personal guarantee, making them individually liable for all financial obligations under the franchise agreement.
- This puts personal assets, including homes, at risk in case of franchise failure.
Potential Mitigations:
- Carefully review the franchise agreement and the full extent of the personal guarantee with a legal professional.
- Develop a robust business plan with contingency strategies to minimize the risk of franchise failure.
- Secure adequate financing and maintain sufficient personal reserves to withstand potential financial challenges.
FDD Citations:
- Item 6: "Franchisees must sign a personal guarantee, making you and your spouse individually liable..."
No Exclusive Territory
High
Explanation:
- The franchise does not offer exclusive territories.
- Franchisees may face competition from other franchisees, company-owned outlets, or other distribution channels.
- This increased competition can significantly impact revenue and profitability.
Potential Mitigations:
- Thoroughly research the existing competitive landscape in your desired territory.
- Develop a strong marketing and branding strategy to differentiate your franchise from competitors.
- Focus on building strong customer relationships and providing exceptional service to foster loyalty.
FDD Citations:
- Item 6: "You will not receive an exclusive territory. You may face competition from other franchisees..."
Initial Investment Uncertainty
Medium
Explanation:
- The estimated initial investment ranges from $109,930 to $173,850, a significant difference.
- This wide range creates uncertainty and makes financial planning challenging.
- Unexpected costs could exceed the higher end of the estimate, straining resources.
Potential Mitigations:
- Carefully review the breakdown of expenses in Item 7 and identify potential areas of cost variation.
- Consult with existing franchisees to understand their actual initial investment costs.
- Secure financing that can accommodate potential cost overruns.
FDD Citations:
- Item 7: "TOTAL ESTIMATED INITIAL INVESTMENT $109,930 – $173,850"
Legal & Contract Risks
3 risks identified
1
1
1
Enforceability of Termination Provisions in Virginia
Medium
Explanation:
- The FDD states that termination provisions in the franchise agreement may not be enforceable in Virginia if they don't constitute "reasonable cause" under Virginia law. This creates uncertainty about the franchisor's ability to terminate the agreement and could limit their recourse in case of franchisee breaches.
Potential Mitigations:
- Carefully review the termination provisions in the franchise agreement with legal counsel specializing in Virginia franchise law to assess their enforceability.
- Negotiate with the franchisor to include clearer and more objective criteria for termination that align with "reasonable cause" under Virginia law.
FDD Citations:
- Item 17.h: "Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause."
Washington Franchise Investment Protection Act Superseding Franchise Agreement
High
Explanation:
- The FDD indicates that the Washington Franchise Investment Protection Act (WFIPA) may supersede the franchise agreement in areas like termination and renewal. This could significantly alter the terms initially agreed upon and potentially favor the franchisee in disputes.
Potential Mitigations:
- Consult with a Washington franchise law expert to understand the implications of the WFIPA and how it might interact with the franchise agreement.
- Negotiate specific provisions in the franchise agreement to address potential conflicts with the WFIPA and ensure clarity on termination and renewal processes.
FDD Citations:
- Item 17.h: "RCW 19.100.180 may supersede the Franchise Agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise."
Mandatory Arbitration/Mediation/Litigation Venue in Washington
Low
Explanation:
- For franchises purchased in Washington, the FDD specifies that arbitration or mediation must occur in Washington or a mutually agreed location. This could increase travel and logistical costs for franchisees outside of Washington.
Potential Mitigations:
- Factor in potential travel costs associated with mandatory dispute resolution venues in Washington when evaluating the franchise opportunity.
- If operating outside Washington, negotiate with the franchisor to establish a mutually agreeable and more convenient location for dispute resolution.
FDD Citations:
- Item 17.h: "In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon…"
Territory & Competition Risks
3 risks identified
2
1
No Exclusive Territory
High
Explanation:
- The FDD explicitly states no exclusive territories are granted. This exposes franchisees to direct competition from other Bath Tune-Up franchisees, company-owned outlets, and alternative distribution channels controlled by the franchisor.
- This significantly increases the risk of market saturation and cannibalization, potentially impacting revenue and profitability.
Potential Mitigations:
- Carefully evaluate the existing competitive landscape within the designated territory, including other Bath Tune-Up franchisees and similar businesses.
- Develop a strong local marketing strategy to differentiate from competitors and build a loyal customer base.
- Focus on exceptional customer service and build strong relationships within the community to generate repeat business and referrals.
FDD Citations:
- Item 12: "You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control."
Competition from Company-Owned Operations (COOs)
High
Explanation:
- The franchisor reserves the right to establish COOs, which can compete directly with franchisees, especially for Significant Key Accounts.
- While franchisees may have the opportunity to subcontract with COOs, there's no guarantee of consistent work or favorable terms.
- COOs could prioritize their own business interests, potentially disadvantaging franchisees.
Potential Mitigations:
- Clarify the COO strategy with the franchisor, including their plans for Significant Key Account acquisition and subcontracting arrangements.
- Negotiate favorable terms for subcontracting opportunities with COOs.
- Focus on building a strong reputation and expertise in niche areas to differentiate from COOs.
FDD Citations:
- Item 12: "If we establish a Company-Owned Operation (COO) in the future, a COO may contract with Significant Key Accounts."
Encroachment by Other Franchisees
Medium
Explanation:
- While franchisees are prohibited from operating in other territories, the FDD acknowledges the possibility of franchise agreement breaches.
- This could lead to unauthorized competition from other franchisees, impacting sales and market share.
Potential Mitigations:
- Communicate with neighboring franchisees to establish clear boundaries and cooperative relationships.
- Report any suspected encroachment to the franchisor promptly.
- Maintain detailed records of sales and marketing activities within the designated territory.
FDD Citations:
- Item 12: "Franchisees are prohibited from doing business in the contracted territory of other franchisees, however, we cannot guarantee that another franchisee will not breach the franchise agreement and do business in your Territory."
- Item 12: "Although we will not grant anyone else the right to operate in your territory...we do not promise that another franchisee will not violate his or her franchise agreement and conduct business in your territory."
Regulatory & Compliance Risks
3 risks identified
2
1
Vendor Dependence and Potential Price Gouging
High
Explanation:
- Franchisees are required to purchase nearly all (95%) of their products and services from Bath Tune-Up approved vendors (Partnership and Approved Vendors). This creates a significant dependency on these vendors and exposes franchisees to potential price gouging or unfair pricing practices.
- While Bath Tune-Up claims to negotiate competitive prices, the FDD also discloses that they receive significant discounts and rebates (13.3% of their revenue in 2024) from these vendors. This raises concerns about whether these discounts are truly passed on to franchisees or if the franchisor prioritizes maximizing its own revenue.
- The lack of transparency regarding vendor selection criteria and the franchisor's sole discretion in approving vendors further exacerbates this risk.
Potential Mitigations:
- Carefully review the pricing and terms offered by Partnership and Approved Vendors. Compare these with market rates to assess competitiveness.
- Negotiate with the franchisor for greater transparency regarding vendor selection criteria and pricing agreements.
- Join or form a franchisee association to collectively bargain for better pricing and terms with vendors.
FDD Citations:
- Item 8: "You may purchase products and services for Bath Improvements only from us, Partnership Vendors or Approved Vendors."
- Item 8: "During 2024 we received discounts and rebates of $1,857,597, or about 13.3% of our total revenue of $13,929,258 from this source."
- Item 8: "Our criteria for approving products and the suppliers of those products are not available to you."
Termination Due to Vendor Non-Compliance
High
Explanation:
- The FDD states that purchasing from non-approved vendors is grounds for immediate termination. This creates a significant risk for franchisees, as even unintentional or minor deviations from the approved vendor list can lead to severe consequences.
- The franchisor's broad discretion in approving and revoking vendor approvals further increases this risk.
Potential Mitigations:
- Thoroughly understand the approved vendor list and ensure strict compliance with purchasing requirements.
- Establish clear internal procedures for vendor selection and approval to minimize the risk of accidental non-compliance.
- Negotiate with the franchisor for a more flexible vendor policy and a clear dispute resolution process.
FDD Citations:
- Item 8: "Any purchases of products or services by you from any vendor other than us, a Partnership Vendor or an Approved Vendor will be considered a material breach of the franchise agreement and constitute grounds for immediate termination of the franchise agreement on written notice from us."
Changes to Approved Vendors
Medium
Explanation:
- The franchisor can revoke vendor approvals at any time, with only 30 days' notice. This can disrupt franchisees' operations and force them to switch suppliers quickly, potentially impacting product quality, pricing, and availability.
Potential Mitigations:
- Maintain relationships with multiple approved vendors to minimize reliance on any single supplier.
- Include provisions in supply agreements with approved vendors that address potential disruptions due to revocation of approval.
FDD Citations:
- Item 8: "We can revoke our approval at any time if we determine in our sole judgment that an Approved Vendor no longer meets or exceeds our standards. You will receive 30 days advance written notice of any revocation of our approval."
Franchisor Support Risks
3 risks identified
3
Limited Site Selection Support
Medium
Explanation:
- The franchisor provides no assistance in selecting an office/warehouse or showroom site, which is crucial for franchisee success.
- While approval isn't required for office/warehouse locations within the territory, the lack of guidance could lead to poor site choices affecting visibility and accessibility.
- Showroom approval is required, but the franchisor's limited involvement in site selection increases the risk of rejection and delays.
Potential Mitigations:
- Conduct thorough independent market research and site analysis before selecting a location.
- Consult with local real estate professionals experienced in commercial properties.
- Engage with existing franchisees to understand their site selection process and experiences.
FDD Citations:
- Item 20: "We do not provide any assistance to you in the selection of an office/warehouse site..."
- Item 20: "We do not help you select a showroom site."
Limited Pre-Opening Support for Equipment and Supplies
Medium
Explanation:
- The franchisor provides a list of required equipment and supplies but offers no assistance in obtaining them.
- This lack of support can lead to delays in opening, difficulty sourcing appropriate equipment, and potentially higher costs.
Potential Mitigations:
- Begin researching and sourcing equipment and supplies early in the process.
- Network with other franchisees to identify reliable suppliers and negotiate better pricing.
- Develop a detailed procurement plan and timeline to ensure timely acquisition of necessary items.
FDD Citations:
- Item 20: "We do not provide assistance with obtaining equipment, signs, fixtures, opening inventory and supplies."
Limited Pricing Support
Medium
Explanation:
- The franchisor does not assist in establishing prices, which can be challenging for new franchisees unfamiliar with local market dynamics.
- This lack of guidance could lead to uncompetitive pricing, impacting profitability.
Potential Mitigations:
- Conduct thorough market research to understand local pricing strategies for similar services.
- Consult with business advisors experienced in pricing strategies for home service businesses.
- Analyze the cost structure of the business to determine a profitable pricing model.
FDD Citations:
- Item 21: "We do not have any obligation to assist you in establishing prices..."
Exit & Transfer Risks
6 risks identified
2
3
1
Restrictive Transfer Provisions
Medium
Explanation:
- The FDD doesn't explicitly detail the franchisor's transfer approval process, creating uncertainty about potential restrictions and the ease of selling the franchise in the future. Lack of clarity on transfer fees, approval criteria, and the right of first refusal can hinder a franchisee's exit strategy.
Potential Mitigations:
- Request a clear explanation of the transfer process, including all associated costs and criteria for approval. Negotiate for more favorable terms if possible.
- Consult with a franchise attorney to review the franchise agreement and ensure the transfer provisions are reasonable and don't unduly restrict your ability to sell.
- Inquire about the franchisor's past history of approving or denying transfers to understand their typical approach.
FDD Citations:
- Item 19 mentions "Transfer fees are collectable" but lacks details on the process and criteria.
- Exhibit A (Franchise Agreement) should be reviewed thoroughly for specific transfer clauses, though the provided excerpt doesn't contain them.
Termination and Renewal Risks (Washington)
Medium
Explanation:
- Item 17.h highlights that Washington's Franchise Investment Protection Act (FIPA) may supersede the Franchise Agreement regarding termination and renewal, creating potential conflict. This could lead to uncertainty about the enforceability of certain clauses and the franchisee's rights in these areas.
Potential Mitigations:
- Carefully review RCW 19.100.180 and consult with a Washington-licensed franchise attorney to understand how FIPA impacts the franchise agreement and your rights regarding termination and renewal.
- Seek clarification from the franchisor on how they handle potential conflicts between the agreement and FIPA.
FDD Citations:
- Item 17.h: "RCW 19.100.180 may supersede the Franchise Agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise."
Limited Information on Resale Value
High
Explanation:
- The FDD provides no information about the resale value of existing Bath Tune-Up franchises. This lack of data makes it difficult to assess the potential return on investment and the market demand for established franchises.
- The relatively young age of the franchise system (founded in 2020) further complicates assessing resale value due to limited historical data.
Potential Mitigations:
- Request information from the franchisor about any resales that have occurred, including the sale price and terms. While the system is young, there may be some data available.
- Speak with existing franchisees about their expectations regarding resale value and their long-term plans for their franchises.
- Consult with a business valuation expert to assess the potential resale value based on financial projections and industry benchmarks.
FDD Citations:
- The provided FDD excerpts do not contain information on resale values.
Non-Compete and Employee Solicitation Restrictions (Washington)
Low
Explanation:
- In Washington, non-compete clauses are limited based on earnings thresholds, and restrictions on employee solicitation are generally unenforceable. This could impact the franchisor's ability to protect its brand and trade secrets in Washington.
Potential Mitigations:
- If operating in Washington, understand the limitations on non-compete and employee solicitation restrictions as outlined in RCW 49.62.020, RCW 49.62.030, and RCW 49.62.060.
- Consult with a Washington-licensed attorney to ensure compliance with these state-specific regulations.
FDD Citations:
- Item 17.h details the specific Washington regulations regarding non-compete and employee solicitation.
Reliance on Franchise Brokers
Medium
Explanation:
- The FDD mentions the use of franchise brokers, who are paid by the franchisor. This creates a potential conflict of interest, as brokers may prioritize closing the sale over providing objective information to prospective franchisees.
Potential Mitigations:
- Conduct independent research and due diligence, including speaking directly with current and former franchisees, to verify information provided by brokers.
- Be aware that brokers represent the franchisor, not the franchisee.
FDD Citations:
- Item 17.h: "Use of Franchise Brokers. The franchisor may use the services of franchise brokers to assist it in selling franchises. A franchise broker represents the franchisor and is paid a fee… Do not rely only on the information provided by a franchise broker about a franchise."
Potential for Disputes Over "Reasonable Cause" for Termination (Virginia)
Medium
Explanation:
- In Virginia, termination must be for "reasonable cause." While the FDD mentions this, it doesn't clarify what constitutes "reasonable cause" under Virginia law, potentially leading to disputes if the franchisor attempts to terminate the agreement.
Potential Mitigations:
- Consult with a Virginia-licensed franchise attorney to understand the concept of "reasonable cause" under the Virginia Retail Franchising Act and how it applies to the franchise agreement.
- Discuss potential termination scenarios with the franchisor and seek clarification on their interpretation of "reasonable cause."
FDD Citations:
- Item 17.h: "Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause."
Operational & Brand Risks
3 risks identified
1
2
Dependence on Mandated Vendors
High
Explanation:
- Franchisees are required to purchase nearly all products and services (95%) from Bath Tune-Up or their designated vendors (Partnership/Approved Vendors). This creates a significant dependency and limits flexibility in sourcing potentially cheaper or higher-quality alternatives.
- The franchisor benefits financially from these arrangements through discounts and rebates, creating a potential conflict of interest. This raises concerns about whether vendor selection is truly based on quality and price or driven by franchisor profit maximization.
- Any deviation from mandated vendors is considered a material breach, potentially leading to termination. This strict requirement leaves franchisees with little recourse if vendor quality, service, or pricing becomes unsatisfactory.
Potential Mitigations:
- Carefully review the vendor agreements and pricing structures. Compare with market rates to assess competitiveness.
- Negotiate stronger protections in the franchise agreement regarding vendor performance and dispute resolution.
- Engage with other franchisees to understand their experiences with the mandated vendors and identify any recurring issues.
FDD Citations:
- Item 8: "You may purchase products and services for Bath Improvements only from us, Partnership Vendors or Approved Vendors."
- Item 8: "Any purchases of products or services by you from any vendor other than us, a Partnership Vendor or an Approved Vendor will be considered a material breach..."
- Item 8: "Most Partnership Vendors and Approved Vendors will provide us discounts and rebates based on purchases by our franchisees."
Franchisor's Right to Become a Supplier
Medium
Explanation:
- The franchisor reserves the right to become a supplier of any product in the future. This could further increase franchisee dependence and potentially limit competition among suppliers, leading to higher prices or reduced quality.
Potential Mitigations:
- Seek clarification on the franchisor's intentions regarding future supply arrangements and any potential impact on pricing and product selection.
- Request contractual limitations on the franchisor's ability to become a supplier in direct competition with existing approved vendors.
FDD Citations:
- Item 8: "Neither we nor our affiliates are currently approved suppliers of any other products but we reserve the right to become a supplier in the future."
Limited Transparency in Vendor Selection Criteria
Medium
Explanation:
- The FDD states that the franchisor's criteria for approving vendors are not available to franchisees. This lack of transparency raises concerns about the objectivity and fairness of the vendor selection process.
Potential Mitigations:
- Request more information about the general principles and factors considered in vendor selection, even if specific criteria are not disclosed.
- Engage with other franchisees to understand their experiences with the vendor approval process and identify any potential biases.
FDD Citations:
- Item 8: "Our criteria for approving products and the suppliers of those products are not available to you."
Performance & ROI Risks
3 risks identified
2
1
Limited Operating History
High
Explanation:
- Bath Tune-Up was founded in 2020, providing limited historical data for prospective franchisees to assess the business model's long-term viability and profitability.
- The reliance on 2024 and 2023 data alone may not accurately reflect future performance, especially given potential market fluctuations and economic changes.
Potential Mitigations:
- Thoroughly research the home services industry and competitive landscape to understand potential challenges and opportunities.
- Consult with experienced business advisors and existing franchisees to gain insights into the brand's strengths and weaknesses.
- Develop a robust business plan with conservative financial projections to account for potential market volatility.
FDD Citations:
- Item 19: "The following is historical financial information concerning...those franchisees who were open for business for all of calendar year 2024..."
Sales Performance Variability
High
Explanation:
- Significant variability in reported sales figures, even within single and multiple territory franchisees, indicates potential inconsistencies in market penetration, operational efficiency, or other factors.
- The wide range between the highest and lowest reported sales raises concerns about the predictability and stability of revenue generation.
Potential Mitigations:
- Carefully analyze the provided sales data, including average, median, and percentile figures, to understand the full range of potential outcomes.
- Discuss the reasons for sales variability with existing franchisees and the franchisor to identify best practices and potential challenges.
- Develop a detailed marketing and sales plan tailored to the specific target market and competitive landscape of the chosen territory.
FDD Citations:
- Item 19: "The lowest amount reported for a single territory franchisee was $104,754 and the highest was $526,170."
- Item 19: "The lowest amount reported for a multiple territory franchisee was $164,653 and the highest was $1,848,339."
Reliance on Franchisee-Reported Data
Medium
Explanation:
- The FDD relies on sales data reported by franchisees, which may not be consistently accurate or audited, potentially leading to an overly optimistic or pessimistic view of financial performance.
Potential Mitigations:
- Independently verify the reported financial data by consulting with industry experts and comparing it to industry benchmarks.
- Speak with existing franchisees to gain their perspective on the accuracy and reliability of the reported figures.
FDD Citations:
- Item 19: "These sales results are based upon the sales reported to us by the franchisees."
- Item 19: "We have not independently verified the amount reported by our franchisees..."
FDD Documents by Year
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FDD Year: 2025
Uploaded: 8/9/2025
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