Everline Coatings and Services

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Founded 201280 locations

Company Profile

Year Founded:2012

Everline Coatings and Services Franchise Cost

Franchise Fee:	$59,500Key Metric
Total Investment:	$185,000 - $320,000Key Metric
Liquid Capital:	$45,000
Royalty Fee:	6% of gross sales
Marketing Fee:	2% of gross sales

Quick ROI Calculator

Available Capital

Target Monthly Income

Experience Level

Based on Everline Coatings and Services's actual financial data

Outlet Counts by Year

Historical outlet data extracted from FDD documents

Total US Locations:80

Scale relative to 1,000 locations

Franchised Units:80

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.

High Risk

Critical items

31% of total

Medium Risk

Monitor closely

55% of total

Low Risk

Manageable items

14% of total

Total Items

Factors analyzed

10 categories

5.83

Overall Score

Low RiskHigh Risk

010

Franchisor Stability Risks

6 risks identified

Limited Operating History as Franchisor

High

Explanation:

Everline Coatings and Services began franchising in 2022, demonstrating a limited operating history as a franchisor. This short track record makes it difficult to assess the long-term viability and success of the franchise model, posing a significant risk to prospective franchisees.
The rapid growth from 0 to 80 franchised units in just three years could indicate aggressive expansion, which may strain the franchisor's resources and support infrastructure.

Potential Mitigations:

Thoroughly research the management team's experience and background in franchising. Seek out and speak with existing franchisees to gauge their satisfaction and assess the level of support provided by the franchisor.
Carefully analyze the financial statements (Item 21) to determine the franchisor's financial stability and ability to support its growth. Pay close attention to revenue streams, profitability, and cash flow.
Consult with a franchise attorney and financial advisor to evaluate the risks and opportunities associated with investing in a relatively new franchise system.

FDD Citations:

Item 20, Table 1: Shows franchise growth from 0 units in 2022 to 80 in 2024.

Rapid Franchise Expansion

Medium

Explanation:

The rapid growth from 20 to 55 units in 2023, and then to 80 units in 2024, suggests aggressive expansion. This rapid growth can strain the franchisor's resources, potentially leading to inadequate training and support for franchisees.
Rapid expansion can also lead to increased competition among franchisees, particularly if market saturation occurs.

Potential Mitigations:

Carefully evaluate the franchisor's training and support programs. Inquire about the staff dedicated to franchisee support and their experience.
Analyze the market demographics and competitive landscape in your target territory to assess the potential for market saturation and intra-brand competition.
Discuss the franchisor's expansion plans with them directly and assess their strategy for managing growth and supporting franchisees.

FDD Citations:

Item 20, Table 1: Illustrates the rapid increase in franchise units.

Lack of Historical Franchisee Performance Data

Medium

Explanation:

The FDD states there is no historical franchisee performance data available. This lack of information makes it difficult to assess the potential profitability and success of the franchise.

Potential Mitigations:

Request financial projections and understand the underlying assumptions. Consult with a financial advisor to evaluate the reasonableness of these projections.
Speak with existing franchisees to gain insights into their financial performance and experiences. However, be aware that individual results can vary significantly.
Conduct thorough market research to assess the demand for the services offered by the franchise in your target territory.

FDD Citations:

Item 20: Indicates no franchisee performance information is disclosed.

No Franchisee Organization

Low

Explanation:

The absence of a franchisee organization could limit franchisees' collective bargaining power and ability to influence the franchisor's decisions.

Potential Mitigations:

Discuss with existing franchisees the potential for forming a franchisee association in the future.
Carefully review the franchise agreement to understand your rights and obligations as a franchisee.

FDD Citations:

Item 20: "There are no trademark-specific franchisee organizations that require disclosure under this Item."

Concentrated Projected Growth in Specific States

Medium

Explanation:

The projected growth appears concentrated in a few states (California, Florida, New Jersey). This concentration could indicate market saturation risks in these areas and limited expansion opportunities in other regions.

Potential Mitigations:

If considering a franchise in one of these states, carefully analyze the market demographics and competition to assess the potential for market saturation.
Discuss the franchisor's plans for expansion into other territories and their rationale for focusing on specific regions.

FDD Citations:

Item 5, Table 5: Shows projected openings concentrated in a few states.

Potential for Disclosure of Contact Information Upon Leaving the System

High

Explanation:

The FDD mentions that contact information may be disclosed to other buyers upon leaving the franchise system. This raises privacy concerns and could potentially expose former franchisees to unwanted solicitations or competitive pressures.

Potential Mitigations:

Seek clarification from the franchisor regarding the specific circumstances under which contact information would be disclosed and to whom.
Consult with a legal professional to understand the implications of this disclosure policy and any potential legal recourse.
Negotiate with the franchisor to limit or restrict the disclosure of your contact information upon termination or exit from the system.

FDD Citations:

Item 20: "If you buy the franchise offered in this disclosure document, your contact information may be disclosed to other buyers when you leave the franchise system."

Disclosure & Representation Risks

6 risks identified

Misrepresentation of Franchisor Capabilities or System Success

High

Explanation:

The FDD mentions a "unique system" developed by the franchisor. There's a risk that the effectiveness, profitability, or uniqueness of this system is overstated or misrepresented.
The FDD's language about "specially designed products and services" could be misleading if these offerings aren't truly unique or advantageous compared to competitors.

Potential Mitigations:

Independently verify the franchisor's claims about the system's success. Speak with existing franchisees and compare their experiences to the franchisor's representations.
Research competing businesses in the pavement marking and maintenance industry. Determine if the franchisor's system offers genuine competitive advantages.
Consult with an experienced franchise attorney to review the FDD and the franchise agreement for any misleading or unsubstantiated claims.

FDD Citations:

Item 23, Exhibit B, Background Section A: "...developed and own a unique system (the “System”) ... using methods and procedures, specially designed products and services..."

Over-reliance on Franchisor's Marketing and Advertising

Medium

Explanation:

The FDD includes a section on advertising, suggesting the franchisor plays a significant role in marketing. This creates a risk of over-reliance on the franchisor's efforts and a potential lack of control over local marketing strategies.
The effectiveness of the franchisor's advertising programs may vary, and franchisees may be obligated to contribute to advertising funds even if they perceive them as ineffective.

Potential Mitigations:

Carefully review the advertising section of the franchise agreement to understand the franchisor's obligations and the franchisee's level of control over local marketing.
Inquire about the success of the franchisor's past advertising campaigns and the return on investment for franchisees.
Develop a local marketing plan to supplement the franchisor's efforts and target specific customer segments in your territory.

FDD Citations:

Item 23, Exhibit B, Section 9: Advertising

Restrictions on Transfer and Assignment

Medium

Explanation:

The FDD mentions a section on "Transfer and Assignment" in the franchise agreement. This indicates potential restrictions on the franchisee's ability to sell or transfer their franchise, which could limit their exit options.
The franchisor may have the right of first refusal or impose other conditions that make it difficult to sell the franchise at a desirable price.

Potential Mitigations:

Thoroughly review Section 13 of the franchise agreement to understand the specific restrictions on transfer and assignment.
Negotiate with the franchisor to obtain more favorable terms regarding transferability, if possible.
Consult with a franchise attorney to assess the potential impact of these restrictions on your long-term investment strategy.

FDD Citations:

Item 23, Exhibit B, Section 13: Transfer and Assignment

Potential for Disputes and Litigation

Medium

Explanation:

The inclusion of sections on "Enforcement" and "Governing Law and Dispute Resolution" highlights the potential for disagreements and legal disputes between the franchisor and franchisee.
The terms of these sections may favor the franchisor and limit the franchisee's legal recourse.

Potential Mitigations:

Carefully review the dispute resolution clauses in the franchise agreement, paying attention to provisions regarding arbitration, venue, and choice of law.
Consult with an attorney to understand your rights and obligations in case of a dispute.
Maintain open communication with the franchisor and attempt to resolve disagreements amicably before resorting to legal action.

FDD Citations:

Item 23, Exhibit B, Section 19: Enforcement
Item 23, Exhibit B, Section 21: Governing Law and Dispute Resolution

Lack of Financial Performance Representations

High

Explanation:

The provided FDD excerpt does not include Item 19, which typically contains financial performance representations (FPRs). The absence of FPRs makes it difficult to assess the potential profitability of the franchise and increases the risk of unrealistic financial expectations.
Without FPRs, it's harder to benchmark the franchisor's claims and compare the opportunity to other franchise investments.

Potential Mitigations:

Request the complete FDD, which should include Item 19. If Item 19 is absent, inquire about the reasons for its omission.
Conduct thorough independent research on the market for pavement marking and maintenance services in your target territory. Estimate potential revenue and expenses based on local market conditions.
Interview existing franchisees to gather information about their financial performance. Be aware that individual results can vary significantly.

FDD Citations:

Item 23 (General): Absence of Item 19 (Financial Performance Representations)

Receipt Process Ambiguity

Low

Explanation:

While seemingly minor, the instruction to return a signed receipt (Exhibit J) introduces a potential point of ambiguity. Failure to properly execute and return this receipt could lead to misunderstandings or delays in the franchising process.

Potential Mitigations:

Ensure you receive and review Exhibit J. Sign and return the receipt promptly according to the provided instructions.
Maintain a copy of the signed receipt for your records.
Confirm receipt with the franchisor to avoid any potential issues.

FDD Citations:

Item 23: "A receipt in duplicate is attached to this Disclosure Document as Exhibit J...return the other signed copy to us at..."

Financial & Fee Risks

5 risks identified

Deferred Initial Franchise Fee Payment Dependent on Training and Opening

Medium

Explanation:

While seemingly beneficial, deferring the initial franchise fee until after training and opening creates a risk. If unforeseen delays occur in training or the business opening, the franchisee may incur significant pre-opening expenses without having formally paid the franchise fee. This could lead to financial strain and potential disputes with the franchisor if the delays are perceived as the franchisor's fault.

Potential Mitigations:

Carefully review the franchise agreement for specific timelines and responsibilities regarding training and opening. Negotiate clear deadlines and remedies for delays outside the franchisee's control.
Develop a detailed pre-opening budget that accounts for potential delays and ensures sufficient capital to cover expenses during this period.
Communicate proactively with the franchisor throughout the pre-opening process to address any potential roadblocks and ensure timely completion of training and opening requirements.

FDD Citations:

Item 5: "...the Franchisor will not require or accept the payment of any initial franchise fees... until the franchisee has (a) received all pre-opening and initial training obligations... and (b) is open for business."
Item 18: Discusses initial investment and financing but doesn't explicitly address the timing of the franchise fee payment in relation to pre-opening expenses.

Lack of Franchisor Financing

Medium

Explanation:

The franchisor does not offer direct or indirect financing, placing the entire burden of securing funding on the franchisee. This can be challenging, especially for new businesses, and may limit access to capital, potentially impacting the franchisee's ability to launch and operate successfully.

Potential Mitigations:

Explore all available financing options, including traditional bank loans, SBA loans, and alternative lenders. Prepare a strong business plan and financial projections to present to potential lenders.
Consider personal savings, investments, or partnerships to secure the necessary capital.
Consult with a financial advisor to develop a comprehensive financing strategy and explore potential funding sources.

FDD Citations:

Item 18: "We do not offer direct or indirect financing to you for any items."

Reliance on Third-Party Financing Availability

Medium

Explanation:

The FDD mentions that financing availability through third-party lenders depends on various factors outside the franchisor's control, such as lending policies, collateral, creditworthiness, and general market conditions. This creates uncertainty and risk for potential franchisees, as they may not be able to secure financing even if they meet the franchisor's other requirements.

Potential Mitigations:

Check your credit score and address any negative items well in advance of applying for financing.
Research potential lenders and their lending criteria to identify suitable options.
Prepare a comprehensive loan application package with strong supporting documentation.
Consider securing pre-approval for financing to demonstrate your ability to obtain funding.

FDD Citations:

Item 18: "The availability of financing through third-party lenders... will depend on factors such as the lending policies of such financial institutions, the collateral you may have, your creditworthiness, and the general availability of financing."

Non-Refundable Initial Investment

High

Explanation:

The FDD states that all expenditures listed in Item 7 are non-refundable, except where noted. This poses a significant financial risk to the franchisee, as they could lose a substantial investment if the franchise relationship terminates prematurely or if the business is unsuccessful.

Potential Mitigations:

Thoroughly review the franchise agreement and all related documents to understand the terms and conditions under which the initial investment may be forfeited.
Conduct extensive due diligence on the franchise system, including speaking with current and former franchisees, to assess the risks and potential for success.
Consult with an attorney experienced in franchise law to review the agreement and advise on potential risks and protections.

FDD Citations:

Item 18: "Unless otherwise noted above, all of the expenditures listed in the Item 7 Chart above are non-refundable."

Variable Additional Territory Fees

Low

Explanation:

The Additional Territory Fees decrease with each additional territory purchased. While this incentivizes multi-territory development, it creates a slight risk of overextending financially by acquiring too many territories too quickly, especially given the lack of franchisor financing.

Potential Mitigations:

Develop a realistic expansion plan based on market analysis and financial projections. Don't overextend by acquiring more territories than you can effectively manage and finance.
Carefully evaluate the financial performance of existing territories before expanding into new ones.
Consult with a financial advisor to determine the optimal pace of expansion and ensure sufficient capital for each new territory.

FDD Citations:

Item 18, Chart 7(B): Details the decreasing Additional Territory Fees for the 2nd through 10th territories.
Item 18, Explanatory Notes: "The Additional Territory Fee is payable in the event you determine to acquire one (1) or more additional Designated Territory(ies)..."

Legal & Contract Risks

3 risks identified

Conflict with Washington Franchise Investment Protection Act

High

Explanation:

Several clauses mention potential conflicts between the franchise agreement and the Washington Franchise Investment Protection Act (WFIPA). This suggests the franchisor's standard agreement may contain provisions that are unenforceable or superseded by state law, creating potential legal disputes.
Specific areas of conflict include termination and renewal (Item 2), releases of claims (Item 4), statute of limitations and jury trial waivers (Item 5), termination rights (Item 7), limitations on damages (Item 10), and waivers related to the franchise relationship commencement (Item 16).

Potential Mitigations:

Carefully review the franchise agreement with legal counsel specializing in Washington franchise law to identify and address any conflicts with WFIPA.
Request written confirmation from the franchisor that the franchise agreement has been reviewed and revised to comply fully with WFIPA.
Negotiate amendments to any problematic clauses to ensure alignment with state law and protect your rights as a franchisee.

FDD Citations:

Item 2: "RCW 19.100.180 may supersede provisions in the franchise agreement...concerning your relationship with the franchisor, including in the areas of termination and renewal."
Item 4: "A release or waiver of rights...purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act...is void."
Item 5: "Provisions...that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act...may not be enforceable."
Item 7: "The franchisee may terminate the franchise agreement under any grounds permitted under state law."
Item 10: "RCW 19.100.190 permits franchisees to seek treble damages...Accordingly, provisions...requiring franchisees to waive exemplary, punitive, or similar damages are void."
Item 16: "No statement...shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement..."

Restrictive Contract Provisions

Medium

Explanation:

Clauses related to franchisor's business judgment (Item 11), indemnification (Item 12), and attorney's fees (Item 13) could be interpreted in ways that disadvantage the franchisee.
The franchisor's "reasonable business judgment" may not align with the franchisee's interests and could limit the franchisee's operational flexibility.
Broad indemnification clauses could expose the franchisee to significant liability for issues outside their control.
Attorney's fees provisions could create a financial disincentive for franchisees to pursue legitimate claims.

Potential Mitigations:

Negotiate clearer definitions and limitations on the franchisor's "reasonable business judgment" clause to ensure fairness and prevent arbitrary decisions.
Seek to narrow the scope of the indemnification clause to exclude liability for the franchisor's negligence or misconduct.
Ensure the attorney's fees provision is reciprocal, applying to both parties equally.

FDD Citations:

Item 11: "Provisions...stating that the franchisor may exercise its discretion on the basis of its reasonable business judgment may be limited or superseded by RCW 19.100.180(1)..."
Item 12: "Any provision...requiring the franchisee to indemnify...the franchisor...is hereby modified such that the franchisee has no obligation to indemnify...for losses...caused by the indemnified party’s negligence..."
Item 13: "If the franchise agreement...require[s] a franchisee to reimburse the franchisor for...attorneys’ fees, such provision applies only if the franchisor is the prevailing party..."

Unenforceable Non-Compete and Non-Solicitation Provisions

Medium

Explanation:

The FDD acknowledges that certain non-compete and non-solicitation provisions in the franchise agreement may be void and unenforceable under Washington law (RCW 49.62.020, 49.62.030, and 49.62.060).
This creates uncertainty about the actual restrictions that will apply to the franchisee after termination or expiration of the agreement, potentially impacting their ability to continue working in the industry.

Potential Mitigations:

Review the specific non-compete and non-solicitation clauses in the franchise agreement with legal counsel to determine their enforceability under Washington law.
Negotiate narrower and more reasonable restrictions that comply with state law and protect the franchisor's legitimate business interests without unduly hindering the franchisee's future opportunities.

FDD Citations:

Item 14: "Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee...unless the employee’s earnings...exceed $100,000 per year..."
Item 15: "RCW 49.62.060 prohibits a franchisor from restricting...a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor."

Territory & Competition Risks

3 risks identified

Non-Exclusive Territory

High

Explanation:

The FDD explicitly states "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." This lack of exclusivity significantly increases competition and can impact revenue potential.
Competition can come from various sources, including other Everline franchisees, company-owned outlets, and other distribution channels controlled by the franchisor. This creates a complex competitive landscape that can be difficult to navigate.

Potential Mitigations:

Thoroughly analyze the competitive landscape in your proposed Designated Territory. Identify existing competitors, their market share, and their strengths and weaknesses. Develop a competitive strategy to differentiate your business.
Focus on building strong customer relationships and providing exceptional service to build customer loyalty and generate positive word-of-mouth referrals.
Engage with the franchisor to understand their plans for company-owned outlets and other distribution channels in your area. Negotiate for clearer boundaries or protections if possible.

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."

Reserved Accounts

High

Explanation:

The franchisor reserves the right to service "Reserved Accounts," which are clients with locations in multiple territories. This means the franchisor or its designee can operate within your Designated Territory, directly competing with you for these clients.
The FDD states that franchisees must abide by the franchisor's terms, including pricing and payment terms, when servicing Reserved Accounts. This limits your flexibility and control over your business operations.
Different pricing and payment terms for Reserved Accounts could impact profitability and create administrative complexities.

Potential Mitigations:

Clarify with the franchisor the specific criteria for designating a Reserved Account and the process for allocating these accounts.
Negotiate for greater transparency regarding Reserved Account activity in your Designated Territory, including the volume and value of business generated.
Focus on building strong relationships with local clients who are less likely to be designated as Reserved Accounts.

FDD Citations:

Item 12: "Notwithstanding the above, under contracts with companies that have locations in more than one territory (each, a “Reserved Account”), we have the right… to offer, sell, and perform the Approved Services at Client Properties under such Reserved Accounts to Client Properties located both within and outside of your Designated Territory(ies)."
Item 12: "Any Approved Services that you perform for a Reserved Account are subject to different pricing, payment and other terms…"

Territory Size and Demographics

Medium

Explanation:

While the FDD mentions a target population of 350,000 for a typical Designated Territory, it also states that the franchisor can award territories with lower or higher populations based on demographics. This variability in territory size and demographics can impact revenue potential.
The FDD mentions the use of territory mapping software and publicly available data, but doesn't specify the exact methodology. This lack of transparency can make it difficult to assess the true potential of a Designated Territory.

Potential Mitigations:

Request detailed demographic information for your proposed Designated Territory, including population density, income levels, and housing types. Conduct independent research to validate the franchisor's data.
Inquire about the specific criteria used to determine territory boundaries and the rationale for any deviations from the target population size.
Consult with experienced business advisors or other franchisees to assess the market potential of the proposed territory.

FDD Citations:

Item 12: "As of the Issuance Date, our standard franchise offering assumes and expects that a typical Designated Territory will be comprised of a geographical area containing a population of approximately 350,000 people."
Item 12: "We may determine to award a Designated Territory that has a lower or higher population if we determine appropriate based on the demographics of the area/region at issue…"

Regulatory & Compliance Risks

7 risks identified

Limited Operating History

Medium

Explanation:

Everline Coatings and Services has a relatively limited operating history, having been founded in 2012. While they project 12 new franchise openings in the next fiscal year (Item 20, Table 5), their limited track record presents a risk regarding the proven profitability and sustainability of the franchise model, especially during economic downturns or changing market conditions.

Potential Mitigations:

Thoroughly research the franchisor's financial performance and understand the basis for their growth projections.
Speak with existing franchisees about their experiences, including challenges and successes, to gain a realistic perspective.
Consult with a financial advisor to assess the financial viability of the franchise opportunity and the franchisor's long-term prospects.

FDD Citations:

Item 20, Table 5: Projected openings data highlights the relatively small number of existing and planned franchises.

Restricted Product and Service Offerings

High

Explanation:

Franchisees are strictly limited to selling only approved products and services, and are required to offer all products and services specified by the franchisor (Item 8). This significantly restricts entrepreneurial freedom and flexibility to adapt to local market demands or customer preferences. The franchisor's ability to disapprove products and services at any time creates uncertainty and potential disruption to the franchisee's business.

Potential Mitigations:

Carefully review the list of approved products and services and assess their market appeal in your target area.
Clarify the process for proposing new products or services and the franchisor's criteria for approval.
Negotiate for greater flexibility in product and service offerings within the franchise agreement.

FDD Citations:

Item 8: Details the restrictions on product and service offerings and the franchisor's control over these aspects of the business.

Pricing Control by Franchisor

Medium

Explanation:

The franchisor has the right to specify and modify prices for products and services, including setting minimum and maximum prices (Item 8). This limits the franchisee's ability to compete on price and adapt to local market conditions. The franchisor's discretion in modifying prices can impact profitability and create uncertainty for the franchisee.

Potential Mitigations:

Analyze the franchisor's pricing strategy and its potential impact on profitability in your target market.
Understand the frequency and rationale for price modifications by the franchisor.
Negotiate for greater flexibility in pricing within the franchise agreement, particularly regarding local market adjustments.

FDD Citations:

Item 8: Specifies the franchisor's right to control pricing for products and services.

Licensing and Permitting Requirements

Medium

Explanation:

The FDD states that franchisees are responsible for ensuring that their personnel and subcontractors have the necessary licenses and permits for providing specific services (Item 8). This can be complex and vary by location, creating a regulatory compliance risk if not properly managed. Failure to comply with licensing requirements can lead to fines, penalties, and legal issues.

Potential Mitigations:

Thoroughly research the specific licensing and permitting requirements for the services offered in your target area.
Develop a system for verifying and tracking the licenses and permits of all personnel and subcontractors.
Consult with legal counsel specializing in regulatory compliance to ensure adherence to all applicable laws and regulations.

FDD Citations:

Item 8: Outlines the franchisee's responsibility for licensing and permitting compliance.

Mandatory Advertising and Promotion Policies

Low

Explanation:

Franchisees must comply with all advertising and promotion policies, including the use of coupons and incentive programs (Item 8). This can limit flexibility in marketing and potentially increase costs if the mandated programs are not effective in the local market.

Potential Mitigations:

Review the franchisor's advertising and promotion policies in detail and assess their potential effectiveness in your target market.
Clarify the costs associated with mandatory programs and their impact on the franchisee's marketing budget.
Negotiate for greater flexibility in local marketing initiatives within the framework of the franchise agreement.

FDD Citations:

Item 8: Specifies the franchisee's obligation to comply with advertising and promotion policies.

No Trademark-Specific Franchisee Organizations

Low

Explanation:

The absence of trademark-specific franchisee organizations (Item 11) may limit the franchisees' collective bargaining power and ability to influence the franchisor's decisions regarding brand management and system-wide policies.

Potential Mitigations:

Actively communicate with other franchisees to share best practices and address common concerns.
Explore the possibility of forming an independent franchisee association to represent the interests of franchisees collectively.

FDD Citations:

Item 11: Discloses the lack of trademark-specific franchisee organizations.

Potential for Increased Competition from Franchisor

High

Explanation:

While the FDD states that customers can patronize any franchise regardless of territory, the franchisor does not limit its own ability to compete with franchisees (Item 8). This creates a potential conflict of interest and could lead to increased competition within the same market, potentially impacting franchisee profitability.

Potential Mitigations:

Clarify the franchisor's policy regarding competition with franchisees, including any restrictions on their operations within or near franchise territories.
Negotiate for territorial protections within the franchise agreement to mitigate the risk of direct competition from the franchisor.

FDD Citations:

Item 8: Indicates that the franchisor does not restrict customers from patronizing any franchise location.

Franchisor Support Risks

3 risks identified

Limited IP Protection

Medium

Explanation:

The FDD states that the franchisor claims copyrights on certain materials but has no registered copyrights or pending patent applications material to the franchise (page 49). This limited IP protection could leave the franchisee vulnerable to competition from similar businesses using similar methods or materials.
While the franchisor claims copyright on some materials, the lack of formal registration weakens their legal standing in case of infringement.

Potential Mitigations:

Carefully review Item 11 of the FDD to fully understand the scope of the franchisor's claimed copyrights and the limitations on their use.
Inquire about the franchisor's plans for registering their copyrights and patents in the future.
Consult with an intellectual property attorney to assess the strength of the franchisor's IP protection and potential risks.

FDD Citations:

Page 49: "We have no registered copyrights, nor are there any pending patent applications that are material to the franchise."
Page 49: "However, we claim copyrights on certain forms, advertisements, promotional materials, software source code and other Confidential Information."

Mandatory System Revisions and Costs

Medium

Explanation:

The franchisor reserves the right to revise its system and copyrighted materials at its discretion and require franchisees to cease using outdated materials (page 49). This could lead to unexpected costs for franchisees, who are responsible for printing revised materials.
Frequent or significant revisions could disrupt operations and require substantial reinvestment.

Potential Mitigations:

Request a clear schedule or estimated frequency of system revisions and associated costs.
Negotiate a cap on the frequency or cost of mandatory revisions in the franchise agreement.
Inquire about financial assistance programs for implementing system updates.

FDD Citations:

Page 49: "We may revise our System and any of our copyrighted materials in our discretion and may require that you cease using any outdated copyrighted material."
Page 49: "You will be responsible for printing any revised or new advertising, marketing or other business materials."

Broad Confidentiality Obligations and Perpetual Assignment of Franchisee Innovations

High

Explanation:

The FDD requires franchisees to maintain the confidentiality of a broadly defined "Confidential Information" both during and after the franchise agreement term (page 49-50). This could restrict franchisees' ability to use their knowledge and experience in the industry after leaving the franchise.
Franchisees are required to disclose all ideas and techniques they develop, granting the franchisor perpetual rights to use them without compensation (page 50). This could stifle innovation and discourage franchisees from developing new processes or improvements.

Potential Mitigations:

Carefully review the definition of "Confidential Information" in the franchise agreement and seek clarification on any ambiguous terms.
Negotiate limitations on the scope and duration of confidentiality obligations, especially post-termination.
Seek legal advice regarding the implications of assigning intellectual property rights to the franchisor.

FDD Citations:

Page 49-50: "Both during and after the term of your Franchise Agreement, you must… maintain the confidentiality of the Confidential Information…"
Page 50: "We have the right to use and authorize others to use all ideas, techniques, methods and processes relating to the Franchised Business that you or your employees/personnel conceive or develop."

Exit & Transfer Risks

3 risks identified

Restrictive Transfer Provisions Conflicting with State Law

Medium

Explanation:

Item 2 mentions that state law (RCW 19.100.180) may supersede franchise agreement provisions regarding termination and renewal, potentially impacting transfer rights.
Item 4 states that waivers of rights related to the Washington Franchise Investment Protection Act are void in certain circumstances, including transfers, unless specific conditions are met. This could limit the franchisor's ability to enforce certain transfer restrictions.
Item 6 specifies that transfer fees must reflect reasonable costs. Unreasonable or unclear fee structures could complicate the transfer process and deter potential buyers.

Potential Mitigations:

Carefully review the franchise agreement to ensure transfer provisions align with RCW 19.100.180 and other applicable state laws.
Seek legal counsel specializing in franchise law to clarify transfer rights and obligations.
Negotiate clear and reasonable transfer fee terms upfront.

FDD Citations:

Item 2: "RCW 19.100.180 may supersede provisions in the franchise agreement... concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise."
Item 4: "In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2)."
Item 6: "Transfer fees are collectable only to the extent that they reflect the franchisor’s reasonable estimated or actual costs in effecting a transfer."

Limited Termination Rights Beyond State Law

Low

Explanation:

Item 7 states the franchisee may terminate under any grounds permitted under state law, but doesn't explicitly address termination rights beyond those provided by law. This lack of clarity could create uncertainty if the franchisee needs to exit for reasons not covered by state law.

Potential Mitigations:

Consult with a franchise attorney to understand termination rights under state law and explore options for negotiating additional termination clauses in the franchise agreement.
Clearly understand the conditions under which the franchise agreement can be terminated and the associated financial implications.

FDD Citations:

Item 7: "The franchisee may terminate the franchise agreement under any grounds permitted under state law."

Potential Conflict with Franchisor's Buy-Back Provisions

Medium

Explanation:

Item 8 highlights that certain buy-back provisions allowing the franchisor to repurchase the business without the franchisee's consent are unlawful, except for terminations for good cause. This could create conflict if the franchisor attempts to repurchase the franchise under circumstances not considered "good cause" by state law.

Potential Mitigations:

Carefully review the franchise agreement's buy-back provisions to ensure they comply with RCW 19.100.180(2)(j).
Seek legal counsel to understand what constitutes "good cause" for termination under Washington law.
Negotiate clear buy-back terms that protect the franchisee's interests.

FDD Citations:

Item 8: "Provisions in franchise agreements... that permit the franchisor to repurchase the franchisee’s business for any reason during the term of the franchise agreement without the franchisee’s consent are unlawful... unless the franchise is terminated for good cause."

Operational & Brand Risks

3 risks identified

Limited Product and Service Flexibility

Medium

Explanation:

Franchisor dictates all products, services, and pricing, limiting franchisee adaptability to market changes and customer preferences.
Forced offering of all specified products/services may lead to unwanted inventory or unsought services.
Inability to deviate from standards without consent restricts innovation and responsiveness to local market needs.

Potential Mitigations:

Carefully review the franchisor's product/service catalog and pricing strategy during due diligence.
Assess the local market demand for the mandated offerings.
Discuss with existing franchisees the franchisor's flexibility in adapting to market changes.

FDD Citations:

Item 8: "You must (1) sell or offer for sale only those products...as we have expressly approved... (2) sell or offer for sale all types of products...we specify, (3) refrain from any deviation from our standards...without our prior written consent..."
Item 8: "We have the right to specify the prices for the products and services you offer...and to establish minimum and maximum prices..."

Mandatory Product/Service Purchase Requirements

Medium

Explanation:

Requirement to purchase all specified products/services from the franchisor can limit cost savings through independent sourcing.
Potential for franchisor to prioritize their profits over franchisee profitability through product/service pricing.

Potential Mitigations:

Thoroughly analyze the franchisor's cost structure for products and services.
Compare pricing with alternative suppliers to assess potential cost disparities.
Negotiate with the franchisor for flexibility in sourcing, if possible.

FDD Citations:

Item 8: "You must (1) sell or offer for sale only those products, merchandise, and services as we have expressly approved for sale in writing, (2) sell or offer for sale all types of products, merchandise, and services we specify..."

Licensing and Permitting Compliance Burden

Medium

Explanation:

Franchisee is responsible for ensuring all personnel and subcontractors possess required licenses and permits, creating administrative burden and potential legal liabilities.
Variations in state and local licensing requirements can complicate compliance and increase costs.

Potential Mitigations:

Research licensing and permitting requirements in the target operating area.
Develop a system for verifying and tracking licenses and permits for all personnel and subcontractors.
Consult with legal counsel specializing in franchise law and relevant regulations.

FDD Citations:

Item 8: "Any painting and striping services...that requires any kind of contractor’s license...must be provided by your personnel that have such appropriate licensing..."

Performance & ROI Risks

3 risks identified

Negative Revenue Growth in Bottom Quarter US Businesses

High

Explanation:

Section III shows that the bottom quarter of US businesses experienced an average revenue growth rate of -1% between 2023 and 2024. This indicates a potential decline in business performance for a significant portion of the franchise network.
The lowest growth rate in this segment was -49%, highlighting the substantial variability and downside risk.

Potential Mitigations:

Thoroughly investigate the reasons behind the negative growth in the bottom quartile. Understand the specific challenges these businesses faced and whether they are replicable in a new franchise.
Inquire about the franchisor's support systems and strategies for underperforming franchises. Assess the effectiveness of their training, marketing, and operational guidance.
Develop a conservative financial projection that accounts for the possibility of negative or slow growth in the initial years of operation.

FDD Citations:

Item 19, Section III: "Average Revenue Growth Rate Reported in Subset: -1%"
Item 19, Section III: "Lowest Revenue Growth Rate Reported in Subset: -49%"

High Variability in Client Count and Revenue Growth

High

Explanation:

Across all performance quartiles, there's significant variation in client count and revenue growth. This suggests inconsistent performance within the franchise system and implies that achieving the average results is not guaranteed.
For example, in Section III, the top quarter shows a highest revenue growth rate of 318% while the lowest is 144%. This wide range indicates unpredictable market conditions or inconsistent application of the business model.

Potential Mitigations:

Analyze the factors contributing to the performance disparities. Understand the characteristics of high-performing franchises and identify best practices.
Develop a robust business plan that considers various performance scenarios, including the possibility of lower-than-average client acquisition and revenue.
Engage with existing franchisees across different performance levels to gain insights into their experiences and challenges.

FDD Citations:

Item 19, Section III: Revenue Growth Rate ranges within each quartile.
Item 19, Section IV: Client Count ranges within each quartile.

Limited Number of Disclosed Businesses in Section III

Medium

Explanation:

The revenue growth data in Section III is based on only 11 US businesses. This small sample size limits the reliability and representativeness of the presented figures.
The performance metrics may be skewed by outliers and may not accurately reflect the typical experience of a new franchisee.

Potential Mitigations:

Request additional performance data from the franchisor, including data from previous years or a larger sample of franchisees.
Consult with existing franchisees outside the disclosed group to gather a broader perspective on revenue growth potential.
Conduct independent market research to validate the growth projections and assess the demand for the services in your target area.

FDD Citations:

Item 19, Section III: "All 11 of the 2023-2024 Disclosed US Businesses"

FDD Documents by Year

Download and view official Franchise Disclosure Documents

FDD Year: 2025

Uploaded: 8/9/2025

FDD Documents

Access and download Franchise Disclosure Documents by year

Complete Franchise Analysis for Everline Coatings and Services

Due Diligence Analysis

Comprehensive due diligence analysis and risk assessment for Everline Coatings and Services franchise opportunities.

Professional due diligence assessment covering 10 critical evaluation categories including financial performance analysis, market risk assessment, operational due diligence, legal compliance review, and franchise system evaluation.

Investment Requirements and Financial Analysis

Franchise Fee: $59,500

Total Investment Range: $185,000 to $320,000

Liquid Capital Required: $45,000

Ongoing Royalty Fee: 6% of gross sales revenue

Marketing Fund Contribution: 2% of gross sales

Market Trends and Search Volume Analysis

Comprehensive market analysis and search trend data for Everline Coatings and Services franchise opportunities. This includes Google search volume trends, market interest indicators, seasonal patterns, and year-over-year growth analysis powered by authentic DataForSEO market research data.

Franchise System Overview

Total US Locations: 80 franchise and company-owned units

Company Founded: 2012 - Established franchise system with proven business model

Industry Sector: Home Services franchise opportunities