C
Caffé Aronne
Food and Beverage
Founded 20224 locationsCompany Profile
Year Founded:2022
Caffé Aronne Franchise Cost
| Franchise Fee: | $25,000Key Metric |
| Total Investment: | $98,000 - $268,000Key Metric |
| Liquid Capital: | $30,000 |
| Royalty Fee: | 6% of gross sales |
| Marketing Fee: | 2% of gross sales |
Quick ROI Calculator
Based on Caffé Aronne's actual financial data
Outlet Counts by Year
Historical outlet data extracted from FDD documents
Total US Locations:4
Scale relative to 1,000 locations
0
Corporate Units:4
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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.
19
High Risk
Critical items
58% of total
13
Medium Risk
Monitor closely
39% of total
1
Low Risk
Manageable items
3% of total
33
Total Items
Factors analyzed
10 categories
7.73
Overall Score
Low RiskHigh Risk
010
Franchisor Stability Risks
3 risks identified
2
1
Limited Operating History of Franchisor
High
Explanation:
- Caffé Aronne's franchisor, Dahan Hospitality Group LLC, was formed very recently in 2022 and only began offering franchises in April 2024. This limited history presents a significant risk as there's no established track record of successfully franchising the business model.
- The lack of experience in franchising can lead to inadequate support systems, underdeveloped training programs, and ineffective marketing strategies, all of which can negatively impact a franchisee's success.
Potential Mitigations:
- Thoroughly research the management team's experience in the food and beverage industry, even if it's not specifically in franchising. Look for evidence of successful business ventures and relevant expertise.
- Seek legal counsel to review the Franchise Agreement and ensure adequate protections are in place regarding franchisor support, training, and marketing.
- Speak with existing franchisees (if any) to gauge their satisfaction with the franchisor's support and the overall performance of their businesses.
FDD Citations:
- Item 1: "We were formed as a limited liability company in the State of Florida on January 26, 2022."
- Item 1: "We began offering franchises in April 2024."
No Franchised Units Operating
High
Explanation:
- Item 20 reveals that there are no currently operating franchised units. This absence of franchised locations raises concerns about the viability and profitability of the franchise model in a real-world setting.
- Without established franchised units, there's no performance data to assess the potential return on investment or the effectiveness of the franchisor's support system.
Potential Mitigations:
- Carefully analyze the financial projections provided by the franchisor and compare them to industry benchmarks. Consult with a financial advisor to assess the realism of the projected returns.
- Inquire about the franchisor's plans for supporting the initial franchisees and building a successful franchise network. Request specific details on training, marketing, and ongoing operational support.
- Consider delaying your investment until the franchisor has established a few successful franchised units and can demonstrate a proven track record.
FDD Citations:
- Item 20, Table 1, 2, and 3: All tables show zero franchised units across 2021-2023.
Reliance on Affiliated Suppliers
Medium
Explanation:
- The franchisor requires franchisees to purchase key supplies, including the Piaggio Ape and coffee beans, from its affiliate, Aronne Franchise Supply LLC. This mandatory relationship creates a potential conflict of interest and limits franchisees' ability to negotiate pricing or explore alternative suppliers.
Potential Mitigations:
- Carefully review the supply agreement with Aronne Franchise Supply LLC to understand the pricing structure, terms, and conditions. Compare the prices with market rates for similar products.
- Negotiate with the franchisor for greater flexibility in sourcing supplies, especially if you can find comparable products at lower prices.
- Consult with a franchise lawyer to assess the legality and fairness of the mandatory supply relationship.
FDD Citations:
- Item 1: "Our affiliate, Aronne Franchise Supply LLC... is your authorized supplier of the custom designed and branded Piaggio Ape and coffee beans."
Disclosure & Representation Risks
6 risks identified
2
3
1
Unproven Business Model and Limited Operating History
High
Explanation:
- Caffé Aronne was founded in 2022, indicating a very limited operating history. This lack of experience raises concerns about the viability and sustainability of the business model, particularly in the competitive food and beverage industry.
- There's no established track record of success to evaluate the franchisor's ability to provide adequate support, adapt to market changes, or maintain profitability.
- The newness of the franchise increases the risk of unforeseen challenges and operational issues that could negatively impact franchisees.
Potential Mitigations:
- Thoroughly research the franchisor's management team and their experience in the food and beverage industry. Look for evidence of relevant expertise and a clear business plan.
- Request detailed financial projections and supporting documentation. Scrutinize these projections carefully and consult with a financial advisor to assess their realism.
- Speak with existing franchisees (if any) to gain insights into their experiences and the level of support provided by the franchisor.
FDD Citations:
- General FDD Review: The FDD does not provide information about the franchisor's history or performance.
Franchisor's Limited Financial Resources
High
Explanation:
- As a newly established company, Caffé Aronne may have limited financial resources. This could impact their ability to provide adequate support to franchisees, invest in marketing and advertising, or weather economic downturns.
- Insufficient financial resources could also hinder the franchisor's ability to fulfill its obligations under the franchise agreement, potentially leading to disputes or even the franchisor's insolvency.
Potential Mitigations:
- Carefully review the franchisor's financial statements (Item 21) to assess their financial stability and ability to meet their obligations.
- Inquire about the franchisor's plans for future funding and growth. Seek assurances that they have sufficient capital to support the franchise system's expansion.
- Consult with a financial advisor to evaluate the franchisor's financial health and the potential risks associated with their limited resources.
FDD Citations:
- Item 21 (if available): Review the franchisor's financial statements for indicators of financial stability.
Dependence on Franchimp.com for Legal Documents
Medium
Explanation:
- The repeated mention of franchimp.com and its disclaimers throughout the provided FDD excerpts raises concerns about the franchisor's reliance on a third-party website for disseminating legal documents.
- This reliance could lead to inconsistencies, inaccuracies, or outdated information in the FDD, potentially creating legal and operational risks for franchisees.
- The disclaimers on franchimp.com explicitly state that the website is not responsible for the accuracy or completeness of the information, shifting the risk entirely to the prospective franchisee.
Potential Mitigations:
- Verify the accuracy and completeness of the FDD information with the franchisor directly. Do not rely solely on the information presented on franchimp.com.
- Request official copies of the FDD and all related documents directly from the franchisor, ensuring they are properly executed and up-to-date.
- Consult with a franchise attorney to review the FDD and ensure its compliance with legal requirements.
FDD Citations:
- Item 23, Exhibit A, Exhibit B: Multiple instances of "This document was downloaded from franchimp.com…" and associated disclaimers.
Potential Issues with Franchise Agreement Structure
Medium
Explanation:
- The Table of Contents in Exhibit B references several crucial aspects of the franchise relationship, including territory, fees, franchisor obligations, franchisee obligations, intellectual property, transfers, defaults, and post-termination obligations.
- Without reviewing the full content of these sections, it's impossible to assess the specific risks associated with each. However, the complexity of these areas suggests potential for disputes or misunderstandings if not clearly defined and balanced in the agreement.
- The "Error! Bookmark not defined." message for Acknowledgments suggests potential errors or incompleteness in the Franchise Agreement document itself, raising concerns about its overall quality and accuracy.
Potential Mitigations:
- Carefully review the entire Franchise Agreement, paying close attention to the sections listed in the Table of Contents. Seek clarification from the franchisor on any ambiguous or concerning clauses.
- Consult with a franchise attorney to review the Franchise Agreement and ensure it protects your interests adequately.
- Specifically address the "Error! Bookmark not defined." issue with the franchisor and request a corrected and complete copy of the Franchise Agreement.
FDD Citations:
- Exhibit B: Table of Contents and "Error! Bookmark not defined."
Incomplete Information on Fees
Medium
Explanation:
- The Table of Contents in Exhibit B lists "Fees" as Item 6. However, the provided excerpt doesn't detail the specific fees involved in the franchise.
- Lack of transparency regarding franchise fees, royalties, advertising fees, and other costs makes it difficult to assess the true financial commitment and potential profitability of the franchise.
Potential Mitigations:
- Request a complete breakdown of all fees associated with the franchise, including initial franchise fees, royalties, advertising fees, training fees, and any other recurring or one-time costs.
- Compare the fee structure to other franchises in the same industry to determine its competitiveness.
- Consult with a financial advisor to evaluate the overall financial implications of the franchise fees and their impact on your potential return on investment.
FDD Citations:
- Exhibit B: Table of Contents, Item 6: Fees.
Receipt Process Ambiguity
Low
Explanation:
- Item 23 mentions a receipt process but lacks clarity on its purpose and implications. While seemingly administrative, a poorly defined receipt process could lead to misunderstandings or disputes regarding the acceptance of the FDD and the commencement of the franchise relationship.
Potential Mitigations:
- Clarify with the franchisor the purpose of the receipt and its legal significance. Confirm the process for returning the signed receipt and any associated deadlines.
- Maintain a copy of the signed receipt for your records as proof of receipt and acceptance of the FDD.
FDD Citations:
- Item 23: Receipt.
Financial & Fee Risks
3 risks identified
2
1
Non-Refundable Initial Franchise Fee
High
Explanation:
- The $25,000 Initial Franchise Fee is non-refundable under any circumstances, even if the franchise relationship terminates prematurely or the franchisee is unable to open their business.
- This creates a significant financial risk for the franchisee, as they lose a substantial investment if the venture fails for reasons outside their control.
Potential Mitigations:
- Thoroughly research Caffé Aronne's business model, management team, and financial performance before signing the Franchise Agreement.
- Consult with a franchise attorney and financial advisor to assess the risks and potential rewards of the investment.
- Negotiate with the franchisor for a partial refund clause under specific circumstances, although this may be difficult given the FDD's explicit statement.
FDD Citations:
- Item 5: "The Initial Franchise Fee is $25,000. This payment is fully earned by us, and due in a lump sum payment when you sign the Franchise Agreement. The Initial Franchise Fee is not refundable under any circumstance."
High Initial Investment with Limited Flexibility
High
Explanation:
- The estimated initial investment ranges from $98,000 to $268,000, representing a substantial financial commitment.
- The Piaggio Ape, a significant portion of the investment ($50,000-$100,000), is purchased through an affiliate, potentially limiting flexibility and price negotiation.
Potential Mitigations:
- Secure financing from reputable lenders with favorable terms and interest rates.
- Develop a detailed business plan with realistic revenue projections and expense forecasts.
- Explore alternative financing options, such as SBA loans or crowdfunding, to reduce reliance on traditional bank loans.
- Inquire about the possibility of leasing the Piaggio Ape instead of purchasing it outright to reduce the initial capital outlay.
FDD Citations:
- Item 7: "TOTAL $125,750 to $267,500"
- Item 5: "You will pay our affiliate, Aronne Franchise Supply LLC between $50,000 and $100,000 for a custom designed and branded Piaggio Ape..."
High Royalty and Brand Fund Fees
Medium
Explanation:
- The combined royalty and brand fund fees (6% + 2% minimum, up to 3%) represent a significant ongoing expense that can impact profitability.
- The Brand Fund contribution has a minimum of $500 per month, regardless of revenue, adding a fixed cost burden, especially during slower periods.
Potential Mitigations:
- Carefully analyze the projected revenue and expenses to ensure that the business can remain profitable after paying royalties and brand fund fees.
- Negotiate with the franchisor for a lower fee structure, especially during the initial stages of operation.
- Implement cost-control measures to maximize profitability and offset the impact of fees.
FDD Citations:
- Item 6: "Royalty payments are 6% of Gross Revenue..."
- Item 6: "You must pay directly to our Brand Fund a Brand Fund Contribution of 2% of monthly Gross Revenue or $500, whichever is greater, subject to increases not to exceed 3% of monthly Gross Revenue..."
Legal & Contract Risks
3 risks identified
3
Renewal at Franchisor's Discretion
High
Explanation:
- The franchisor has sole discretion to refuse renewal even if the franchisee is in good standing. This creates significant uncertainty for the franchisee's long-term investment.
- The FDD states the franchisor may decline renewal if they decide to withdraw from the geographical area. This gives them broad power to terminate successful franchises.
Potential Mitigations:
- Negotiate for more objective renewal criteria in the franchise agreement.
- Request clarification on the franchisor's strategy for geographical areas and potential withdrawal scenarios.
- Seek legal counsel to review the renewal clause and advise on potential risks.
FDD Citations:
- Item 17, Renewal Summary: "If you are in good standing... you can sign a successor agreement... unless we have determined, in our sole discretion, to withdraw from the geographical area..."
Materially Different Renewal Terms
High
Explanation:
- The FDD states franchisees "may be asked to sign a new Franchise Agreement with materially different terms and conditions" upon renewal. This exposes franchisees to potentially unfavorable changes in fees, royalties, or other key provisions.
Potential Mitigations:
- Request examples of potential changes to the franchise agreement upon renewal.
- Negotiate for limitations on the extent to which terms can be changed.
- Consult with a franchise attorney to understand the implications of this clause.
FDD Citations:
- Item 17, Renewal Summary: "You may be asked to sign a new Franchise Agreement with materially different terms and conditions..."
Extensive List of Non-Curable Defaults
High
Explanation:
- The FDD lists numerous non-curable defaults, including insolvency, bankruptcy, and even "understating Gross Revenue two (2) or more times." This creates a high risk of termination for reasons beyond the franchisee's control or for unintentional errors.
Potential Mitigations:
- Carefully review the full list of non-curable defaults and understand their implications.
- Consult with legal counsel to assess the reasonableness of these provisions.
- Implement strong financial controls and reporting procedures to minimize the risk of unintentional violations.
FDD Citations:
- Item 17, "Cause" defined - non-curable defaults: Lists various non-curable defaults.
Territory & Competition Risks
3 risks identified
2
1
Intense Competition in the Food and Beverage Industry
High
Explanation:
- The FDD mentions "intense competition" in the restaurant business, particularly in the fast-casual sector, from established local cafes, coffee shops, bakeries, and regional/national chains.
- This high level of competition can significantly impact market share, profitability, and customer acquisition.
- Caffé Aronne is a relatively new franchise (founded 2022, franchising since 2024), making it more vulnerable to established competitors.
Potential Mitigations:
- Thorough market research to identify underserved niches and differentiate from competitors.
- Develop a strong local marketing strategy emphasizing unique selling propositions, such as the mobile café model or specific product offerings.
- Excellent customer service and loyalty programs to build a strong customer base.
- Operational efficiency and cost control to maintain competitive pricing.
FDD Citations:
- Item 1: "Competition in the restaurant business in general and the fast-casual food industry in particular is well-established and intense."
Restricted Product and Service Offerings
High
Explanation:
- The FDD states that franchisees can "only sell products and services in the manner we prescribe." Item 12 details these restrictions, which are not provided in this excerpt.
- Limited flexibility in product offerings can hinder a franchisee's ability to adapt to local market demands, seasonal trends, or changing consumer preferences.
- This can also limit opportunities for innovation and differentiation from competitors.
Potential Mitigations:
- Carefully review Item 12 of the FDD to fully understand all restrictions on product and service offerings.
- Negotiate with the franchisor for some flexibility in adapting the menu or introducing local specials.
- Focus on maximizing sales within the allowed product and service range through effective marketing and upselling techniques.
FDD Citations:
- Beginning of excerpt: "You may only sell products and services in the manner we prescribe. See Item 12 for restrictions on sales within and outside the Territory."
Territorial Restrictions and Encroachment
Medium
Explanation:
- The FDD mentions restrictions on sales "within and outside the Territory" (Item 12), suggesting potential limitations on the franchisee's operating area.
- Unclear territory definitions or potential encroachment from other franchisees or corporate-owned locations can lead to reduced market potential and increased competition.
Potential Mitigations:
- Thoroughly review Item 12 of the FDD to understand the precise territory definition, exclusivity provisions, and any potential for encroachment.
- Negotiate for a clearly defined and protected territory with sufficient market potential.
- Assess the density of existing and planned Caffé Aronne locations in the surrounding area.
FDD Citations:
- Beginning of excerpt: "See Item 12 for restrictions on sales within and outside the Territory."
Regulatory & Compliance Risks
3 risks identified
2
1
Early Stage Franchisor
High
Explanation:
- Caffé Aronne is a very young franchise, founded in 2022 and only beginning to offer franchises in 2024. This lack of experience in franchising presents significant risks, including untested operational systems, limited brand recognition, and potential financial instability.
- The franchisor's limited track record makes it difficult to assess the long-term viability and profitability of the franchise.
Potential Mitigations:
- Thoroughly research the franchisor's management team and their experience in the food and beverage industry.
- Request detailed financial projections and understand the franchisor's financial stability.
- Speak with existing franchisees (if any) to gauge their satisfaction and success.
- Negotiate favorable terms in the franchise agreement, such as lower initial fees or extended support periods.
FDD Citations:
- Item 1: "We began offering franchises in April 2024."
- Item 1: "We were formed as a limited liability company in the State of Florida on January 26, 2022."
Affiliate Supplier Dependence
High
Explanation:
- The franchisor's affiliate, Aronne Franchise Supply LLC, is the mandatory supplier for key components like the Piaggio Ape and coffee beans. This creates a potential conflict of interest and limits franchisees' ability to negotiate pricing or explore alternative suppliers.
- Dependence on a single supplier can also create supply chain vulnerabilities, potentially disrupting operations if the affiliate experiences difficulties.
Potential Mitigations:
- Carefully review the pricing and terms offered by the affiliate supplier. Compare with market rates to ensure fairness.
- Negotiate for greater flexibility in sourcing supplies in the long term.
- Inquire about the affiliate's production capacity and contingency plans for supply disruptions.
FDD Citations:
- Item 1: "Our affiliate, Aronne Franchise Supply LLC is... your authorized supplier of the custom designed and branded Piaggio Ape and coffee beans."
- Item 8: "We are not an approved supplier of any items that you must purchase or lease, but our affiliate is."
Limited Control over Product Sourcing
Medium
Explanation:
- Franchisees are required to purchase a significant portion (85%) of their supplies from franchisor-approved vendors. This restricts their ability to control costs and potentially limits access to local or more competitive suppliers.
- The franchisor's criteria for approving suppliers are not disclosed, creating a lack of transparency.
Potential Mitigations:
- Request a complete list of approved suppliers and their pricing.
- Negotiate for greater flexibility in sourcing supplies, especially for non-branded items.
- Clearly understand the process and costs associated with proposing new suppliers.
FDD Citations:
- Item 8: "We maintain written lists of approved items...and a list of designated suppliers..."
- Item 8: "approximately 85% of the purchases and leases required for ongoing operations."
- Item 8: "Our criteria for approving items and suppliers are not available to you."
Franchisor Support Risks
3 risks identified
3
Limited Pre-Opening Assistance
Medium
Explanation:
- While the franchisor provides some pre-opening support, it explicitly states it is "not required to provide you with assistance" beyond what is listed. This limited scope could leave franchisees feeling unsupported in critical areas not explicitly covered.
- The franchisor and its affiliates are not obligated to install equipment, signage, or other necessary items, placing the burden and cost solely on the franchisee.
Potential Mitigations:
- Carefully review the FDD to fully understand the extent of pre-opening support provided and identify any gaps.
- Develop a detailed pre-opening plan that addresses all aspects of setup, including sourcing and installation of equipment and signage.
- Negotiate with the franchisor for additional support or resources if needed.
- Connect with existing franchisees to understand their pre-opening experiences and learn best practices.
FDD Citations:
- Item 11: "Except as listed below, we are not required to provide you with assistance."
- Item 11, Section 1.c: "We and our affiliates are not obligated to install any of these items."
Franchisor's Sole Discretion in Training
Medium
Explanation:
- The franchisor has "sole discretion" in determining satisfactory completion of initial training. This subjectivity could lead to disputes or unfair assessments.
- The franchisor can change the training location or switch to virtual training, potentially disrupting franchisees' plans and increasing costs.
Potential Mitigations:
- Clarify the training evaluation criteria with the franchisor before signing the agreement.
- Inquire about the likelihood of training location or format changes and include provisions in the agreement to address potential disruptions.
- Obtain detailed information about the training content and schedule to ensure it meets your needs.
FDD Citations:
- Item 11, Section 1.d: "We will determine, in our sole discretion, whether you satisfactorily complete the initial training."
- Item 11, Section 1.d: "We reserve the right to designate an alternative location for the initial training or provide virtual training."
Limited Post-Opening Support
Medium
Explanation:
- Ongoing support is limited and subject to franchisor's discretion and personnel availability. This could result in delayed or inadequate assistance when needed.
- While the franchisor offers individualized assistance, it's "within reasonable limits," which is vague and could be interpreted narrowly by the franchisor.
Potential Mitigations:
- Seek clarification on what constitutes "reasonable limits" for ongoing support and document it in the franchise agreement.
- Connect with existing franchisees to gauge the level and responsiveness of post-opening support.
- Develop internal resources and capabilities to handle common operational challenges.
FDD Citations:
- Item 11, Section 3.c: "upon your request, provide individualized assistance to you within reasonable limits by telephone, electronic mail or postage service, subject at all times to availability of our personnel and in reasonable limits."
Exit & Transfer Risks
3 risks identified
2
1
Limited Transfer Rights
High
Explanation:
- The franchisor's consent is required for any transfer, creating a significant barrier to exit. While they state they won't unreasonably withhold consent, this is subjective and provides the franchisor significant control.
- The conditions for transfer approval, including potentially materially different terms in a new franchise agreement, create uncertainty and could diminish the value of the franchise.
Potential Mitigations:
- Carefully review the franchise agreement's transfer provisions, paying close attention to the definition of "reasonable" and the franchisor's discretion.
- Consult with a franchise attorney to understand the implications of the transfer restrictions and negotiate more favorable terms if possible.
- Seek clarification on the potential for materially different terms in a new agreement upon transfer.
FDD Citations:
- Item 17, Section l: "No transfer is allowed without our consent, which we will not unreasonably withhold."
- Item 17, Section m: "Conditions include: ... transferee signs our then-current form of Franchise Agreement, which may have materially different terms from your Franchise Agreement..."
Franchisor's Right of First Refusal
High
Explanation:
- The franchisor's right of first refusal (ROFR) can restrict the franchisee's ability to sell to a third party, potentially limiting the sale price or preventing a sale altogether.
- The franchisor's ability to substitute cash and other advantageous terms in their offer further complicates the process for the franchisee.
Potential Mitigations:
- Fully understand the terms and conditions of the ROFR clause in the franchise agreement.
- Consult with a franchise attorney to evaluate the potential impact of the ROFR on a future sale.
- Consider negotiating a shorter timeframe for the franchisor's ROFR decision.
FDD Citations:
- Item 17, Section n: "You must promptly notify us of a written offer to purchase your Franchise. We have 30 days to exercise our first right to buy it on the same terms and conditions..."
Franchisor's Purchase Option Upon Termination
Medium
Explanation:
- The franchisor's option to purchase assets at cost or fair market value, whichever is less, upon termination can result in a significant loss for the franchisee.
- This provision can discourage potential buyers and limit the franchisee's leverage in a sale.
Potential Mitigations:
- Negotiate for a more favorable purchase option, such as fair market value.
- Maintain accurate records of asset costs and depreciation to support a fair valuation.
- Consult with a franchise attorney to understand the implications of this provision.
FDD Citations:
- Item 17, Section o: "Upon termination of the Franchise Agreement, we have the option to purchase your equipment, furniture, fixtures... at your cost or fair market value, whichever is less."
Operational & Brand Risks
3 risks identified
2
1
Mandatory Sourcing Restrictions & Affiliate Supplier Conflict of Interest
High
Explanation:
- Franchisees are required to purchase a significant portion (85%) of their supplies from franchisor-approved sources, including an affiliate owned by the CEO. This creates a potential conflict of interest where the franchisor could prioritize its own profits over franchisee success by setting inflated prices or providing lower quality goods.
- The franchisor's criteria for approving suppliers are not disclosed, limiting franchisees' ability to understand and challenge sourcing decisions.
- The franchisor reserves the right to receive rebates and discounts from suppliers without sharing them with franchisees, further exacerbating the conflict of interest.
Potential Mitigations:
- Carefully review Item 8 and the Franchise Agreement to fully understand the sourcing restrictions and the franchisor's affiliate relationship.
- Compare prices from the mandated affiliate supplier with market prices for similar goods to assess potential price gouging.
- Consult with a franchise attorney to evaluate the fairness of the sourcing arrangements and potential legal recourse in case of disputes.
FDD Citations:
- Item 8: "Our affiliate, Aronne Franchise Supply LLC is the designated supplier...Our CEO, Aaron Dahan has an ownership interest in Aronne Franchise Supply LLC."
- Item 8: "We reserve the right to include a reasonable markup in the price of the products and service that we require you to purchase form or through us or an affiliate."
- Item 8: "We currently do not receive any revenue, rebates, discounts or other material consideration from any suppliers...however, we may do so in the future, and any rebates or discounts we receive may be kept by us in our sole discretion."
Limited Franchisor Support Beyond Opening
Medium
Explanation:
- The FDD states that the franchisor is not required to provide assistance beyond the pre-opening phase and initial training. This lack of ongoing support could hinder franchisees' ability to adapt to changing market conditions, implement new products/services, and address operational challenges.
Potential Mitigations:
- Clarify with the franchisor the extent of ongoing support offered beyond the initial phase, including marketing assistance, operational guidance, and technology updates.
- Network with existing franchisees to understand the level of support they receive in practice and any challenges they have faced.
- Negotiate for specific ongoing support provisions to be included in the Franchise Agreement.
FDD Citations:
- Item 11: "Except as listed below, we are not required to provide you with a assistance."
Dependence on Single/Limited Approved Suppliers
High
Explanation:
- Relying on a limited number of approved suppliers, especially for essential items like the Piaggio Ape and coffee beans, creates vulnerability to supply chain disruptions. Issues with the supplier's production, delivery, or quality could significantly impact franchisee operations.
Potential Mitigations:
- Inquire about the approved suppliers' track record of reliability and contingency plans in case of disruptions.
- Explore the possibility of identifying alternative suppliers in advance, even if they are not currently approved, to have backup options in case of emergencies.
- Negotiate for provisions in the Franchise Agreement that address supplier performance issues and potential remedies for franchisees.
FDD Citations:
- Item 8: "Our affiliate, Aronne Franchise Supply LLC is the designated supplier for the custom designed and branded Piaggio Ape and the coffee beans that you are required to purchase."
Performance & ROI Risks
3 risks identified
2
1
Limited Operating History
High
Explanation:
- Caffé Aronne is a young franchise founded in 2022 with limited operating history. This makes it difficult to project future performance and assess the long-term viability of the business model.
- The FDD shows fluctuating gross sales figures for the affiliate-owned locations, further highlighting the instability of a new business.
- The lack of franchised locations makes it impossible to evaluate the franchise system's success in supporting franchisees.
Potential Mitigations:
- Thoroughly research the franchisor's background and experience in the food and beverage industry.
- Consult with experienced franchise attorneys and financial advisors to assess the risks and potential rewards.
- Request detailed financial projections and understand the underlying assumptions.
- Consider the franchisor's plans for future growth and support for franchisees.
FDD Citations:
- Item 19: Financial Performance Representations (Limited data from 2019-2023)
- Item 20: Outlets and Franchisee Information (Zero franchised outlets)
No Franchised Outlet Performance Data
High
Explanation:
- The FDD relies solely on affiliate-owned outlet performance, which may not accurately reflect the potential performance of a franchised location.
- Affiliate-owned outlets don't pay royalties or advertising fees, which significantly impacts profitability for franchisees.
- The absence of franchised outlet data makes it impossible to assess the true earning potential and challenges faced by franchisees.
Potential Mitigations:
- Request detailed information on the differences between affiliate-owned and franchised operations, including all fees and expenses.
- Seek independent financial analysis to understand the potential impact of royalties and advertising fees on profitability.
- Network with existing franchisees of similar concepts to gain insights into real-world performance.
FDD Citations:
- Item 19: "The affiliate- owned outlets... do not pay any Royalty Fees or Brand Fund Contributions to us or expend any minimum amount on local advertising."
- Item 20: Tables showing zero franchised outlets.
Inconsistent Sales Data
Medium
Explanation:
- The provided sales data for affiliate-owned locations shows significant fluctuations year over year, indicating potential instability and making it difficult to predict future performance.
- The 2020 sales figures are drastically lower than other years, raising concerns about the business's resilience to external factors.
Potential Mitigations:
- Request an explanation for the sales fluctuations and the low 2020 figures.
- Analyze market trends and competition to understand the potential for consistent sales growth.
- Develop a conservative financial plan that accounts for potential sales variability.
FDD Citations:
- Item 19: Table 1 showing fluctuating sales figures for the Mobile Café and Catering Unit.
FDD Documents by Year
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FDD Year: 2024
Uploaded: 8/26/2025
FDD Documents
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