D.P. Dough
Food and Beverage
Founded 198758 locationsCompany Profile
Year Founded:1987
D.P. Dough Franchise Cost
| Franchise Fee: | $40,000Key Metric |
| Total Investment: | $121,000 - $360,000Key Metric |
| Liquid Capital: | $37,500 |
| Royalty Fee: | 5% of gross sales |
| Marketing Fee: | 1% of gross sales |
Quick ROI Calculator
Based on D.P. Dough's actual financial data
Outlet Counts by Year
Historical outlet data extracted from FDD documents
Total US Locations:58
Scale relative to 1,000 locations
Franchised Units:49
Corporate Units:9
Additional Information
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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.
9
High Risk
Critical items
24% of total
23
Medium Risk
Monitor closely
61% of total
6
Low Risk
Manageable items
16% of total
38
Total Items
Factors analyzed
10 categories
5.39
Overall Score
Low RiskHigh Risk
010
Franchisor Stability Risks
3 risks identified
1
2
Limited Operating History of Current Franchisor
Medium
Explanation:
- Calzone King, LLC, the current franchisor, was only formed in 2019. This limited operating history increases the risk of unforeseen challenges in managing and supporting a franchise system, potentially impacting franchisee success.
- While the brand itself has a longer history (since 1987), the current franchisor's inexperience in this specific role could lead to strategic missteps or inadequate support for franchisees.
Potential Mitigations:
- Thoroughly research the management team's experience and track record, particularly their experience with the D.P. Dough brand under previous franchisors.
- Speak with existing franchisees about their experiences with the current franchisor, focusing on support, training, and communication.
- Carefully review the FDD for any disclosures regarding the franchisor's financial stability and plans for future growth.
FDD Citations:
- Item 1: "Calzone King, LLC was formed as a New York limited liability company on January 28, 2019."
- Item 1: "The franchisor began offering franchises for sale on July 1, 2019."
Multiple Franchisor Predecessors
Medium
Explanation:
- D.P. Dough has had multiple franchisor predecessors (The Original Calzone Company and D.P. Dough Franchising, LLC). Frequent changes in ownership and management can create inconsistencies in brand standards, support systems, and overall strategy, potentially negatively impacting franchisees.
- These transitions can also lead to legal and operational complexities, which could disrupt the franchise system.
Potential Mitigations:
- Investigate the reasons for the previous franchisor changes and assess the current franchisor's long-term commitment to the brand.
- Review the FDD for any litigation or disputes related to previous franchisors.
- Inquire about the current franchisor's plans for maintaining brand consistency and supporting franchisees through future changes.
FDD Citations:
- Item 1: "There are two franchisor predecessors to Calzone King, LLC: The Original Calzone Company (1989-2011) and D.P. Dough Franchising, LLC (2012-2019)."
Net Decrease in Franchised Units
High
Explanation:
- Item 20, Table 1 shows a net decrease of 5 franchised units in 2024. This decline raises concerns about the brand's overall health and potential challenges franchisees may be facing.
- A shrinking franchise system can lead to reduced support, decreased brand recognition, and difficulties in attracting new customers.
Potential Mitigations:
- Carefully analyze the reasons for the decline in franchised units. Inquire about terminations, non-renewals, and closures.
- Speak with existing franchisees about their experiences and challenges.
- Assess the franchisor's plans for revitalizing the brand and attracting new franchisees.
FDD Citations:
- Item 20, Table 1: "Net Change in Franchised Outlets in 2024: -5"
Disclosure & Representation Risks
5 risks identified
1
3
1
Misleading or Omitted Information in FDD
High
Explanation:
- The FDD warns that false, misleading statements or material omissions within the document constitute a violation of federal and state law. This poses a significant risk to the franchisee as relying on incomplete or inaccurate information can lead to poor investment decisions and legal disputes.
- The reliance on the franchisor's representations is paramount, and any inaccuracies can severely impact the franchisee's business operations and profitability.
Potential Mitigations:
- Carefully review the entire FDD with an experienced franchise attorney and financial advisor. Pay close attention to all disclosures, particularly those related to financials, obligations, and restrictions.
- Compare the FDD with information from other sources, such as existing franchisees and industry reports. Conduct independent research to validate the franchisor's claims.
- Request clarification in writing from the franchisor on any ambiguous or concerning points in the FDD. Document all communications.
FDD Citations:
- Item 23: "If Calzone King, LLC does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred..."
Potential for Pending Litigation Against Franchisor or Affiliates
Medium
Explanation:
- The FDD mentions "routine litigation incidental to the business." This lacks specificity and raises concerns about the nature and potential impact of such litigation on the franchise system. It's unclear what constitutes "routine" and whether this could escalate and negatively affect franchisees.
Potential Mitigations:
- Request further clarification from the franchisor regarding the nature and extent of any "routine litigation." Ask for specific examples and assess the potential impact on the franchise system.
- Consult with a legal professional to understand the implications of any pending or past litigation.
FDD Citations:
- Item 3 Addendum, Section B: "No such party has pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations."
Risk of Past Legal Issues with Franchisor or Affiliates
Medium
Explanation:
- The FDD discloses potential past convictions or civil actions against the franchisor or affiliates. While the FDD states there are no current issues, past legal problems, even if resolved, could indicate a pattern of behavior or potential future issues.
Potential Mitigations:
- Thoroughly investigate any past legal issues mentioned in the FDD. Research the details of the cases and their outcomes.
- Consult with a legal professional to understand the implications of any past legal actions.
FDD Citations:
- Item 3 Addendum, Section C: "No such party has been convicted of a felony...or has been the subject of a civil action alleging [various violations]."
Risk of Injunctive or Restrictive Orders Against Franchisor or Affiliates
Medium
Explanation:
- The FDD addresses the absence of current injunctive or restrictive orders. However, the possibility of future orders, even if unlikely, represents a risk. Such orders could significantly restrict the franchisor's operations and impact franchisees.
Potential Mitigations:
- Research the franchisor's history and any past instances of regulatory scrutiny.
- Monitor industry news and legal updates for any potential actions against the franchisor.
FDD Citations:
- Item 3 Addendum, Section D: "No such party is subject to a currently effective injunctive or restrictive order..."
Receipt Process Confirmation
Low
Explanation:
- While the FDD outlines the receipt process, there's a minor risk associated with ensuring the franchisor acknowledges receipt. A failure to confirm receipt could lead to disputes regarding compliance with the 14-day disclosure period.
Potential Mitigations:
- Send the signed receipt via certified mail with return receipt requested to ensure documented proof of delivery.
- If submitting electronically, request a confirmation of receipt from the franchisor.
- Retain copies of all correspondence and documentation related to the FDD receipt.
FDD Citations:
- Item 23: "You should return one copy of the signed receipt..."
Financial & Fee Risks
3 risks identified
1
2
High Initial Franchise Fee
Medium
Explanation:
- A $40,000 initial franchise fee is a substantial upfront investment. This large sum reduces available capital for other crucial startup expenses like equipment, inventory, and marketing, potentially hindering initial operations and increasing the risk of early financial strain.
Potential Mitigations:
- Secure financing specifically designated for the franchise fee to avoid depleting operational funds.
- Negotiate a payment plan for the initial fee with the franchisor, if possible, to spread the cost over time.
- Develop a detailed financial projection that accounts for the franchise fee and ensures sufficient capital for all startup and ongoing expenses.
FDD Citations:
- Item 5: "The initial franchise fee for a D.P. Dough Restaurant is Forty Thousand Dollars ($40,000)."
Unspecified Equipment and Fixture Costs
Medium
Explanation:
- Item 6, Section C states that Franchisee must acquire equipment and fixtures specified by Calzone King, but the FDD doesn't detail these costs within this section. This lack of transparency makes it difficult to accurately project initial investment needs and could lead to unexpected expenses, impacting financial stability.
Potential Mitigations:
- Carefully review Item 7 (referenced in Section C) for a comprehensive list of required equipment and fixtures and their associated costs.
- Request a detailed breakdown of all anticipated equipment and fixture expenses from the franchisor before signing the agreement.
- Consult with existing franchisees to understand actual equipment and fixture costs and potential hidden expenses.
FDD Citations:
- Item 6, Section C: "Franchisee must acquire equipment and fixtures as specified by Calzone King. The cost of such acquisitions are solely the responsibility of Franchisee."
Sole Sourcing Requirements
High
Explanation:
- Mandated sourcing of ingredients, supplies, and uniforms from franchisor-approved vendors (Sections D, E, and F) restricts franchisees' ability to negotiate better prices or choose alternative suppliers. This can lead to higher operating costs and reduced profit margins, impacting long-term financial viability.
- The franchisor's potential to change approved vendors and product specifications (Section D) introduces uncertainty and potential cost fluctuations, making financial planning challenging.
Potential Mitigations:
- Thoroughly analyze the pricing and quality of goods offered by approved vendors and compare them to market rates.
- Negotiate with the franchisor for greater flexibility in sourcing, particularly if competitive alternatives exist.
- Build strong relationships with approved vendors to potentially negotiate better terms over time.
FDD Citations:
- Item 6, Section D: "Franchisee shall not purchase…any item or product that does not conform to the standards and specifications required by Calzone King…"
- Item 6, Section E: "Franchisee shall purchase all of its ingredients and supplies from a distributor approved by Calzone King…"
- Item 6, Section F: "Franchisee shall purchase uniforms from a vendor designated by Calzone King…"
Legal & Contract Risks
3 risks identified
2
1
Choice of Law/Forum - NY Override
Medium
Explanation:
- The FDD states that the choice of law/forum clauses do not waive rights under NY General Business Law Article 33. This creates uncertainty about the enforceability of the chosen law/forum if it conflicts with NY law, especially for franchisees outside NY.
Potential Mitigations:
- Consult with an attorney specializing in franchise law to understand the implications of Article 33 and how it might interact with the chosen law/forum.
- Negotiate with the franchisor to clarify the interplay between the chosen law/forum and Article 33, potentially seeking an amendment to limit the scope of the override.
FDD Citations:
- Item 17(v) and 17(w): "The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York."
Maryland-Specific Provisions - Deferred Payments Conditioned on Franchisor's Performance
Medium
Explanation:
- For Maryland franchisees, initial payments are deferred until Calzone King fulfills its initial obligations. This creates a risk for the franchisee if the franchisor delays or fails to meet these obligations, potentially impacting the franchise launch and operations.
Potential Mitigations:
- Clearly define the franchisor's "initial obligations" in the Franchise Agreement with specific timelines and deliverables.
- Include provisions for remedies if the franchisor fails to meet these obligations, such as termination rights or compensation for delays.
FDD Citations:
- Item 5: "With respect to Franchises governed by Maryland law: All franchise fees and other initial payments owed by franchisees and subfranchisors shall be deferred until Calzone King has completed its initial obligations under the Franchise Agreement."
Maryland-Specific Provisions - Restrictions on Releases and Waivers
Low
Explanation:
- The FDD outlines specific limitations on releases and waivers for Maryland franchisees concerning the Maryland Franchise Registration and Disclosure Law. This is generally protective of franchisees but requires careful review to understand its full scope.
Potential Mitigations:
- Review the Maryland Franchise Registration and Disclosure Law to understand the rights and protections afforded to franchisees.
- Consult with a Maryland franchise law attorney to ensure compliance and understand the implications of these limitations.
FDD Citations:
- Item 3: (a, b, c, d, e) - Specific provisions related to releases, waivers, and claims under Maryland law.
Territory & Competition Risks
3 risks identified
1
2
Franchisor Competition from Non-Traditional Locations and Retail Outlets
High
Explanation:
- The franchisor reserves the right to operate or license Non-Traditional Restaurants (stadiums, airports, etc.) which may offer a limited menu, potentially competing with traditional franchisees for customers, especially if located near their territories.
- The franchisor also retains the right to sell pre-packaged menu items to retail outlets (grocery stores, etc.) both inside and outside franchisee territories. This creates direct competition with franchisees, especially for customers seeking convenience.
Potential Mitigations:
- Carefully analyze the potential impact of Non-Traditional Restaurants and retail sales within and around your proposed territory. Request clarification from the franchisor on the planned density and proximity of these locations.
- Negotiate with the franchisor to limit the number of Non-Traditional Restaurants and retail outlets within a certain radius of your territory.
- Focus on building a strong local customer base through superior service, delivery options, and promotions to differentiate from pre-packaged products and Non-Traditional locations.
FDD Citations:
- Item 12: "We may grant franchises or operate a franchise for a Non-Traditional Restaurant…which may offer a limited menu to customers."
- Item 12: "We reserve the exclusive right to…sell and distribute…prepackaged menu items…in and outside of your Territory."
Limited Control Over Online Sales and Marketing
Medium
Explanation:
- While franchisees can use online channels for sales and marketing outside their territory, they cannot advertise within another franchisee's territory. This can limit the reach of online marketing efforts and create complexities in targeting specific customer segments.
- The FDD doesn't explicitly state the franchisor's online strategy, which could lead to potential conflicts or overlap in online presence and marketing efforts.
Potential Mitigations:
- Clarify with the franchisor their online marketing strategy and any restrictions on online advertising, including search engine optimization (SEO) and social media marketing.
- Develop a targeted local online marketing strategy focusing on your specific territory, utilizing permitted channels and focusing on local SEO and community engagement.
- Explore cooperative online marketing opportunities with neighboring franchisees to expand reach while respecting territorial boundaries.
FDD Citations:
- Item 12: "Franchisee may use other channels of distribution, such as the Internet…so long as Franchisee does not advertise in the protected Territory of another franchisee or affiliate of franchisor."
Territory Size Variation and Density Considerations
Medium
Explanation:
- The territory size is based on population density, meaning territories in densely populated areas will be smaller. This could limit market potential and create increased competition in urban areas.
- The FDD doesn't specify the exact methodology for determining territory size based on population density, making it difficult to assess the adequacy of the territory before signing the agreement.
Potential Mitigations:
- Request detailed information from the franchisor on how territory size is calculated based on population density for your specific area of interest.
- Conduct thorough market research to assess the customer potential within the proposed territory, considering population demographics, competition, and local market dynamics.
- Negotiate a larger territory or specific territorial protections if the initial proposed territory seems inadequate based on your market analysis.
FDD Citations:
- Item 12: "The size of your exclusive territory will be based upon the population density of the city…If your Restaurant is located in a geographic area that has a large population, your Territory will be smaller."
Regulatory & Compliance Risks
6 risks identified
1
3
2
Trademark and Intellectual Property Transfer Risk
Medium
Explanation:
- The FDD describes multiple transfers of trademarks and intellectual property between different entities related to the D.P. Dough brand. This complex history of ownership changes creates a risk of potential disputes or encumbrances on the intellectual property, which could impact the franchisee's ability to use the brand and operate their business.
- Specifically, the transfer of assets from D.P. Dough Franchising, LLC to Calzone King LLC involved an "exclusive trademark license agreement" rather than a direct ownership transfer. This could lead to complications if the licensing agreement is terminated or disputed.
Potential Mitigations:
- Carefully review all agreements related to the trademarks and intellectual property, including the licensing agreement between D.P. Dough Franchising, LLC and Calzone King LLC. Seek legal counsel to ensure the franchisee has clear and unencumbered rights to use the brand.
- Inquire about any past disputes or litigation related to the intellectual property and confirm that these have been resolved satisfactorily.
- Request documentation demonstrating the chain of ownership for all key intellectual property assets.
FDD Citations:
- Item 1: "D.P. Dough Franchising, LLC sold its franchise assets, including intellectual property, contracts, and an exclusive trademark license agreement to Calzone King LLC as of July 1, 2019."
- Item 1: References to The Original Calzone Company, Zones, Inc., and D.P. Dough Franchising, LLC and their roles in the history of the brand.
Limited Operating History Under Current Ownership
Medium
Explanation:
- Calzone King, LLC, the current franchisor, was formed relatively recently (January 28, 2019). This limited operating history under the current ownership structure increases the uncertainty about the franchisor's financial stability, management expertise, and ability to provide ongoing support to franchisees.
Potential Mitigations:
- Thoroughly review the franchisor's financial statements and assess their financial health. Inquire about their revenue projections and business plan.
- Speak with existing franchisees about their experiences with the franchisor and the level of support they have received.
- Research the background and experience of the franchisor's management team.
FDD Citations:
- Item 1: "Calzone King, LLC was formed as a New York limited liability company on January 28, 2019."
Required System Changes and Updates
Low
Explanation:
- The FDD states that the franchisor may periodically make changes to the systems, standards, signage, and equipment requirements. This could require franchisees to make additional investments in their businesses, potentially impacting their profitability.
Potential Mitigations:
- Request a clear schedule of planned system updates and associated costs.
- Negotiate a cap on the amount franchisees are required to invest in system changes within a given period.
- Inquire about financing options for required upgrades.
FDD Citations:
- Item 1: "We may periodically make changes to the systems, standards, signage, and equipment requirements. You may have to make additional investments in the franchised business periodically during the term of the franchise if those kinds of changes are made or if your Restaurant’s equipment or facilities wear out or become obsolete, or for other reasons (for example, as may be needed to comply with a change in the system standards or local, state, or federal law)."
Dependence on College/University Market
Medium
Explanation:
- The FDD mentions that D.P. Dough Restaurants are typically located in towns with a significant college or university population. This reliance on a specific demographic creates a vulnerability to fluctuations in student enrollment, academic calendars, and local economic conditions affecting the student population.
Potential Mitigations:
- Conduct thorough market research to assess the stability and growth potential of the target college/university market.
- Develop marketing strategies to attract a broader customer base beyond the student population.
- Consider locations that also have a strong non-student population to diversify the customer base.
FDD Citations:
- Item 1: "D.P. Dough Restaurants, which typically are located in towns with a significant college or university population..."
Reliance on Proprietary Products
Low
Explanation:
- The FDD emphasizes the use of proprietary ingredients and products, which can limit franchisees' flexibility in sourcing and potentially increase costs. This dependence on the franchisor for specific supplies can create a vulnerability to supply chain disruptions or price increases.
Potential Mitigations:
- Carefully review the supply agreements and pricing structures for proprietary products. Negotiate favorable terms and explore the possibility of using alternative suppliers if permitted.
- Inquire about the franchisor's contingency plans for supply chain disruptions.
FDD Citations:
- Item 1: "Food products are prepared according to specified recipes and procedures and use high quality ingredients, including specifically formulated and specially produced proprietary lines of calzone dough, meats, cheeses, vegetables, and other food products, beverages and non-food products that are branded, trademarked, and/or packaged exclusively for our system and franchise owners."
Potential Liabilities of Predecessor Companies
High
Explanation:
- The FDD mentions several predecessor companies and asset transfers. While it states that Calzone King, LLC did not assume any liabilities from D.P. Dough Franchising, LLC, there's a risk of unknown or undisclosed liabilities from previous entities resurfacing and impacting the current franchisor or its franchisees. The complex history with multiple entities increases this risk.
Potential Mitigations:
- Conduct thorough due diligence on all predecessor companies, including searching for any outstanding litigation, tax liens, or other legal issues.
- Seek legal counsel to review the asset purchase agreements and ensure that liabilities have been properly addressed.
- Obtain indemnification from the franchisor against any liabilities arising from predecessor companies.
FDD Citations:
- Item 1: Entire section detailing the history of predecessors, including "D.P. Dough Franchising, LLC acquired all trademarks, other intellectual property, contract assignments, certain choses in action, goodwill, and all other rights incident to the operation of the D.P. Dough franchise from Zones, Inc. and The Original Calzone Company, without assuming any liabilities."
Franchisor Support Risks
3 risks identified
2
1
Limited Post-Opening Support
Medium
Explanation:
- While initial training and pre-opening assistance are provided, ongoing support seems limited. The FDD states that post-opening visits are only upon request and at the franchisee's expense. The franchisor has no obligation for regular or proactive consultations.
- This lack of consistent support could be detrimental, especially for new franchisees facing operational challenges or needing guidance in adapting to changing market conditions.
Potential Mitigations:
- Negotiate a schedule for regular, even if brief, consultations with the franchisor, perhaps quarterly, for the first year or two of operation.
- Form a strong peer network with other franchisees for mutual support and best practice sharing.
- Clearly understand the limitations of post-opening support before signing the franchise agreement and budget accordingly for potential consulting or other external support needs.
FDD Citations:
- Item 11, Post-Opening Assistance: "If you request it, we will travel to your Restaurant... you must pay us the actual travel expenses... We do not have an obligation to meet or consult with you at any specific time, rate, or frequency."
Limited Site Selection Assistance
Medium
Explanation:
- The franchisor assists with site approval but doesn't actively help in finding or negotiating leases. This puts the onus on the franchisee, who may lack experience in real estate negotiations and site selection within the specific brand context.
- An unsuitable location can significantly impact business success.
Potential Mitigations:
- Engage an experienced real estate broker specializing in commercial properties suitable for restaurants.
- Thoroughly research the demographics and competition in the target area independently.
- Seek legal counsel to review lease agreements before signing.
FDD Citations:
- Item 11, Pre-Opening Assistance: "We do not own or lease the building... We will not assist you in negotiating your lease."
Strict Local Advertising Requirements with Potential Penalties
Low
Explanation:
- Franchisees are required to spend at least 2% of net sales on local advertising and obtain prior approval for all materials. Unapproved materials incur a $250 fee per occurrence.
- This can be burdensome for franchisees, especially those new to marketing, and the penalties could add up.
Potential Mitigations:
- Develop a clear local marketing plan in advance and get franchisor approval for a range of materials upfront.
- Maintain open communication with the franchisor's marketing team and seek clarification on any ambiguous guidelines.
- Document all approvals and communications regarding local advertising.
FDD Citations:
- Item 11, Advertising/Marketing: "You must spend at least two percent (2%) of your Net Sales on Local Advertising... All Local Advertising... shall be subject to our prior written approval... Brand Standards Fee of $250 per occurrence."
Exit & Transfer Risks
6 risks identified
2
3
1
Restrictive Choice of Law and Forum (General)
Medium
Explanation:
- The FDD states a choice of law and forum, potentially creating inconvenience and added cost for franchisees outside of the chosen jurisdiction. While acknowledging New York General Business Law Article 33 rights, the overall impact on disputes remains a concern.
Potential Mitigations:
- Consult with an attorney specializing in franchise law to understand the implications of the chosen law and forum and how Article 33 protections might apply in your specific situation.
- Negotiate with the franchisor to modify the choice of law and forum clauses, especially if you are located far from the specified jurisdiction. Success in this negotiation is unlikely, but worth exploring.
FDD Citations:
- Item 17(v) and 17(w): "The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York."
Restrictive Choice of Law and Forum (Ohio - Personal Guaranty)
High
Explanation:
- The Personal Guaranty mandates Ohio law and jurisdiction, regardless of the franchisee's location. This poses a significant burden and cost for franchisees outside Ohio, especially if legal action arises.
Potential Mitigations:
- Consult with an attorney specializing in franchise law to fully understand the implications of this clause and explore potential negotiation strategies.
- Negotiate with the franchisor to modify the choice of law and forum in the Guaranty. This is likely difficult, but the potential impact warrants the attempt.
FDD Citations:
- Attachment C, Section 9: "This Guaranty shall be deemed to have been entered into in the state of Ohio and shall be construed according to the laws of the state of Ohio. Any action involving this Guaranty... shall be commenced in the state of Ohio."
Shortened Statute of Limitations (Personal Guaranty)
High
Explanation:
- The Personal Guaranty includes a one-year statute of limitations for claims, significantly shorter than typical statutes. This restricts the time frame for legal action, potentially barring legitimate claims.
Potential Mitigations:
- Consult with an attorney to understand the implications of this clause and its enforceability in your jurisdiction.
- Negotiate with the franchisor to extend the limitations period to a more reasonable timeframe. This is likely difficult but crucial given the severity of the restriction.
FDD Citations:
- Attachment C, Section 10: "...any and all claims or actions...shall be commenced within one (1) year from the discovery of facts giving rise to any such claim or action, or such claim or action will be barred."
Release Requirements Restricted in Certain States
Low
Explanation:
- The FDD specifies that general release requirements for renewal, sale, or transfer do not apply in Maryland, and prospective franchisees cannot be required to waive liability under Maryland law. This suggests potential conflicts with the standard agreement and requires careful review for Maryland franchisees.
Potential Mitigations:
- If operating in Maryland, review the Franchise Agreement carefully with legal counsel to ensure compliance with these specific provisions and understand any remaining release requirements.
FDD Citations:
- Item 3: Specific subsections a, b, c, d, and e address Maryland law and release requirements.
Specific Restrictions for Virginia Franchisees
Medium
Explanation:
- Item 4 notes that Section 23 of the Franchise Agreement does not apply if prohibited by the Virginia Retail Franchising Act. Without knowing the content of Section 23, it's difficult to assess the full impact, but it indicates potential variations in the agreement based on location and requires careful review for Virginia franchisees.
Potential Mitigations:
- Carefully review Section 23 of the Franchise Agreement with legal counsel, paying close attention to how the Virginia Retail Franchising Act modifies its application.
FDD Citations:
- Item 4: "With respect to franchisees governed by Virginia law, Section 23 shall not apply to the extent the same is prohibited by the Virginia Retail Franchising Act."
Specific Restrictions and Protections for Minnesota Franchisees
Medium
Explanation:
- Item 5 outlines several Minnesota-specific regulations impacting litigation location, jury trials, liquidated damages, termination notice, non-renewal notice, transfer consent, and trademark protection. These variations require careful review for Minnesota franchisees.
Potential Mitigations:
- If operating in Minnesota, review the Franchise Agreement and these specific provisions with legal counsel to ensure compliance and understand your rights and obligations.
FDD Citations:
- Item 5: This entire section details Minnesota-specific regulations and requirements.
Operational & Brand Risks
3 risks identified
3
Limited Franchisor Assistance in Lease Negotiation
Medium
Explanation:
- The franchisor explicitly states they will not assist in lease negotiations, a critical aspect of restaurant setup and ongoing profitability.
- Franchisees are left to navigate complex lease terms and conditions without expert guidance, potentially leading to unfavorable agreements.
Potential Mitigations:
- Engage an experienced real estate attorney or lease negotiator specializing in commercial properties.
- Thoroughly research local market lease rates and terms to understand reasonable expectations.
- Negotiate key lease provisions like rent escalations, renewal options, and tenant improvements.
FDD Citations:
- Item 11: "We will not assist you in negotiating your lease."
Rigid Location Approval Process
Medium
Explanation:
- The franchisor's location approval criteria are extensive and specific, potentially limiting site options and delaying the opening process.
- Disagreements on location selection could lead to delays, added expenses, or even termination of the franchise agreement.
Potential Mitigations:
- Proactively engage with the franchisor early in the site selection process to understand their requirements and preferences.
- Conduct thorough due diligence on potential sites, considering factors like competition, demographics, and accessibility.
- Present multiple site options to the franchisor to increase the likelihood of approval.
FDD Citations:
- Item 11: "In evaluating the site for approval, we take into account local competition, parking..."
- Item 11: "In the event that Calzone King and Franchisee cannot agree on a Location..."
Limited Post-Opening Support and On-Site Assistance Fees
Medium
Explanation:
- While the franchisor offers post-opening assistance, it's contingent upon franchisee request and comes with associated travel expense fees.
- This could discourage franchisees from seeking necessary support, potentially impacting operational efficiency and profitability.
Potential Mitigations:
- Budget for potential post-opening support expenses.
- Clearly communicate expectations regarding support needs with the franchisor upfront.
- Utilize available resources like the operating manual and online intranet for self-help solutions.
FDD Citations:
- Item 11: "If you request our presence for any time after the grand opening, you must pay us the actual travel expenses that we incur."
Performance & ROI Risks
3 risks identified
2
1
Limited Financial Performance Data
High
Explanation:
- Item 19 only provides average net sales data for 37 out of 58 (64%) operating restaurants in 2024, labeled "Reporting Restaurants." This limited sample may not accurately represent the system's overall performance and could create a misleadingly positive impression.
- The exclusion criteria for the 22 non-reporting restaurants (being open less than 24 months, unauthorized closures, or system violations) raises concerns about potential broader system instability and franchisee challenges.
- No cost or profit information is provided, making it difficult to assess the true profitability potential of a D.P. Dough franchise.
Potential Mitigations:
- Request the written substantiation of the financial performance representation mentioned in Item 19 to gain a deeper understanding of the data and its limitations.
- Inquire about the performance of the 22 excluded restaurants to assess the reasons for their exclusion and the potential risks associated with new franchise locations.
- Develop a detailed financial model based on the available data and industry benchmarks, incorporating realistic cost assumptions to estimate potential profitability.
- Consult with existing franchisees outside the "Reporting Restaurants" group to gain a broader perspective on actual financial performance and operational challenges.
FDD Citations:
- Item 19: "This historic financial performance representation below relates only to a subset of the 58 D.P. Dough restaurants in operation during 2024."
- Item 19: "The 22 locations that were not included had not been open for a twenty four (24) month period as of the end of 2024, or were closed for business early, in violation of the System, or without approval from franchisor."
- Item 20: Tables 1, 2, and 3 provide context on unit growth, transfers, and closures, but lack financial details.
Net Unit Decline and Franchisee Turnover
High
Explanation:
- Item 20, Table 1 shows a net decline of 5 franchised units in 2024, indicating potential challenges within the system.
- Item 20, Table 3 reveals terminations, non-renewals, and re-acquisitions by the franchisor, further suggesting franchisee dissatisfaction or operational difficulties.
- The combination of unit decline and franchisee turnover raises serious concerns about the long-term viability and stability of the franchise system.
Potential Mitigations:
- Thoroughly investigate the reasons for the unit decline and franchisee turnover in 2024. Specifically, inquire about the circumstances surrounding the terminations, non-renewals, and re-acquisitions.
- Speak with current and former franchisees to understand their experiences and identify any recurring issues or challenges within the system.
- Assess the franchisor's support infrastructure and resources to determine their ability to assist franchisees in achieving long-term success.
FDD Citations:
- Item 20, Table 1: "Net Change -5" for franchised units in 2024.
- Item 20, Table 3: Details on terminations, non-renewals, and re-acquisitions by franchisor.
Variability in Sales Performance
Medium
Explanation:
- The wide range between minimum and maximum net sales within each quartile in Table 1 highlights significant variability in franchisee performance.
- This variability suggests that factors beyond the franchisor's control, such as local market conditions, management capabilities, and competition, can significantly impact sales.
Potential Mitigations:
- Conduct thorough market research to assess the local demand for D.P. Dough's products and services in your target area.
- Develop a strong business plan that accounts for potential variations in sales and includes strategies for managing expenses and maximizing revenue.
- Seek guidance from the franchisor on best practices for site selection, marketing, and operations to improve the likelihood of success.
FDD Citations:
- Item 19, Table 1: Minimum and Maximum Net Sales figures for each quartile.
FDD Documents by Year
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FDD Year: 2025
Uploaded: 8/8/2025
FDD Year: 2024
Uploaded: 8/25/2025
FDD Documents
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