Golf Envy
Fitness
Founded 20232 locationsCompany Profile
Year Founded:2023
Golf Envy Franchise Cost
| Franchise Fee: | $45,000Key Metric |
| Total Investment: | $237,000 - $637,000Key Metric |
| Liquid Capital: | $67,500 |
| Royalty Fee: | 7% of gross sales |
| Marketing Fee: | Not specified |
Quick ROI Calculator
Based on Golf Envy's actual financial data
Outlet Counts by Year
Historical outlet data extracted from FDD documents
Total US Locations:2
Scale relative to 1,000 locations
0
Corporate Units:2
Additional Information
Processing Franchise Details
Our AI is extracting detailed information from franchise documents.
Company history, executive team profiles, and legal disclosures will appear here once document processing is complete.
Search Interests & Trends
Search Volume Data and Trend Analysis
Search Interest & Trends
No Trends Data Available
Trend analysis data for Golf Envy is being collected. Check back soon for insights.
AI-Powered Due Diligence Analysis
Our advanced AI analyzes Franchise Disclosure Documents (FDDs) to identify potential risks and opportunities across 10 critical categories.
16
High Risk
Critical items
40% of total
17
Medium Risk
Monitor closely
43% of total
7
Low Risk
Manageable items
18% of total
40
Total Items
Factors analyzed
10 categories
6.13
Overall Score
Low RiskHigh Risk
010
Franchisor Stability Risks
3 risks identified
2
1
Limited Operating History
High
Explanation:
- Golf Envy Franchising, LLC was formed very recently (May 7, 2024). This limited operating history increases the risk of unforeseen challenges and business model failures.
- The franchisor has no prior experience operating a similar business model, increasing the uncertainty of its success.
- The parent company, Zeze Holdings, LLC, is also newly formed (November 2024) and lacks franchising experience.
Potential Mitigations:
- Carefully review the franchisor's business plan and projections, scrutinizing their assumptions and feasibility.
- Seek independent financial and legal advice to assess the risks associated with a new franchisor.
- Contact existing franchisees (although limited) to understand their experiences and challenges.
FDD Citations:
- Item 1: "We were formed as a limited liability company... on May 7, 2024."
- Item 1: "We do not currently operate, nor have we in the past operated, a Club similar to those offered to our franchisees..."
- Item 20: Tables demonstrating limited franchise sales and company-owned locations.
- Item 21: "We have not offered franchises for three (3) or more years..."
Lack of Franchisee Track Record
High
Explanation:
- There are no established franchisees to provide insights into the franchise system's performance and profitability.
- The lack of historical data makes it difficult to assess the franchisor's support, training, and marketing effectiveness.
- Without a proven track record, it's harder to predict the likelihood of franchisee success.
Potential Mitigations:
- Thoroughly research the franchisor's management team and their experience in the fitness industry.
- Request detailed information on the franchisor's support programs and training curriculum.
- Seek legal advice to understand the terms of the franchise agreement and protect your interests.
FDD Citations:
- Item 20: Tables 1, 2, and 3 showing zero franchisees in prior years.
- Item 20: "During the last three fiscal years, no franchisees have signed confidentiality agreements..."
Dependence on Affiliate-Owned Locations
Medium
Explanation:
- The current operating units are primarily affiliate-owned, which may not accurately reflect the potential performance of independently owned franchises.
- The franchisor's focus and resources may be diverted towards its affiliate-owned locations, potentially impacting support for franchisees.
Potential Mitigations:
- Inquire about the franchisor's plans for supporting franchisees and ensuring equitable resource allocation.
- Compare the performance of affiliate-owned locations with projections for franchised units.
FDD Citations:
- Item 20: Table 1 showing company-owned outlets.
- Item 20: Table 4 detailing the status of company-owned outlets.
- Item 20: "*This outlet is owned and operated by our affiliate."
Disclosure & Representation Risks
3 risks identified
3
Unregistered Franchise Sales
High
Explanation:
- Exhibit A states "We may not yet be registered to sell franchises in any or all of these states." Selling franchises in states where registration is required but not completed is illegal and can lead to penalties, franchise rescission, and reputational damage.
Potential Mitigations:
- Verify Golf Envy's registration status in your state with the relevant regulatory agency listed in Exhibit A.
- Do not sign the franchise agreement until registration is confirmed in your operating state.
- Consult with a franchise attorney to understand the implications of unregistered sales.
FDD Citations:
- Exhibit A: "We may not yet be registered to sell franchises in any or all of these states."
New Franchisor with Limited Operating History
High
Explanation:
- Golf Envy was founded in 2023, indicating a very limited operating history. This lack of experience increases the risk of unforeseen challenges, untested business models, and potential management issues.
Potential Mitigations:
- Thoroughly research the management team's background and experience in franchising and the fitness industry.
- Scrutinize the financial projections and understand the underlying assumptions.
- Speak with existing franchisees (if any) to gauge their experiences and satisfaction.
FDD Citations:
- General FDD Context: "Founded: 2023"
Limited Financial Resources of a New Franchisor
High
Explanation:
- Being a new franchisor, Golf Envy may have limited financial resources. This can impact their ability to provide adequate support, marketing, and ongoing development of the franchise system.
Potential Mitigations:
- Carefully review Item 21 (Financial Statements) to assess the franchisor's financial stability.
- Inquire about the franchisor's plans for future growth and investment in the franchise system.
- Consider the franchisor's ability to weather economic downturns or unexpected challenges.
FDD Citations:
- General FDD Context: "Founded: 2023"
Financial & Fee Risks
7 risks identified
2
3
2
Unclear Use of Initial Franchise Fee
Medium
Explanation:
- The FDD states the initial franchise fee becomes part of the franchisor's general operating funds and will be used at their discretion. This lacks transparency and raises concerns about how the funds are actually utilized. There's no guarantee the funds will be used to support franchisees.
Potential Mitigations:
- Request clarification from the franchisor on how initial franchise fees are typically allocated. Ask for specific examples of how these funds have been used in the past to support franchise development and ongoing operations.
- Consult with a franchise attorney to review the franchise agreement and assess the implications of this clause.
FDD Citations:
- Item 5: "The initial franchise fee constitutes part of our general operating funds and will be used as such in our discretion."
Reliance on "Imputed" Data for Financial Performance Representations
High
Explanation:
- The FDD uses "imputed" figures for royalty fees, marketing fund contributions, and local marketing expenditures based on what affiliate-owned clubs *would* have paid. This is not actual performance data and may not accurately reflect the potential financial results of a franchised location.
- Affiliate-owned locations may operate under different conditions and incentives than franchised locations, making the comparison unreliable.
Potential Mitigations:
- Request detailed information on the operating costs and revenues of affiliate-owned locations. Compare these figures to the imputed amounts to understand the discrepancies.
- Seek financial projections from experienced franchise consultants and compare them to the information provided in the FDD.
- Recognize that the imputed data is hypothetical and may not be a reliable indicator of future performance.
FDD Citations:
- Item 19: Definitions of "Imputed Royalty," "Imputed Marketing Fund," and "Imputed Local Marketing Requirement."
Limited Franchisor Support During Operations
Medium
Explanation:
- The listed ongoing support from the franchisor seems limited, primarily focusing on email accounts, periodic training, and advice on specifications and vendors. This may not be sufficient for a new franchisee to successfully operate their business, especially in a competitive industry like fitness.
Potential Mitigations:
- Inquire about the frequency and content of the "periodic" training and advisory services. Request specific examples of the support provided to existing franchisees.
- Negotiate for additional support in the franchise agreement, if necessary.
- Research alternative sources of support, such as industry associations or independent consultants.
FDD Citations:
- Item 11: "Our Obligations During the Operation of Your Business."
Risk of Delayed Opening and Potential Termination
Medium
Explanation:
- The FDD states that the typical opening timeframe is 9-12 months, but various factors can cause delays. The franchise agreement allows for termination if the business doesn't open within 365 days, putting the franchisee at risk of losing their investment.
Potential Mitigations:
- Develop a detailed project plan with realistic timelines for each stage of the opening process.
- Secure financing and lease agreements early in the process to avoid delays.
- Communicate proactively with the franchisor and local authorities to address potential roadblocks.
- Negotiate a longer timeframe for opening in the franchise agreement, if possible.
FDD Citations:
- Item 11: "The typical time from the signing of the Franchise Agreement to the opening of a Club is nine to twelve months."
- Item 11: "We may terminate your Franchise Agreement if you fail to commence operating your Business within 365 days after you sign the Franchise Agreement."
Exclusion of Tax Liabilities in Item 19
Low
Explanation:
- Item 19 explicitly excludes tax liabilities from the presented information. This can lead to an incomplete understanding of the true costs of operating the franchise.
Potential Mitigations:
- Consult with a tax professional to estimate potential tax liabilities associated with the franchise business.
- Factor in estimated tax liabilities when developing financial projections and evaluating the investment opportunity.
FDD Citations:
- Item 19: "The information presented in this Item 19 excludes tax liabilities."
Limited Information on Paid Lead Generation
High
Explanation:
- The FDD mentions that affiliate-owned clubs began paid lead generation in June 2024 but provides no details about the costs, effectiveness, or whether franchisees will be required to participate in similar programs. This lack of information makes it difficult to assess the potential marketing expenses and lead generation strategies for franchisees.
Potential Mitigations:
- Request detailed information from the franchisor about the paid lead generation program, including costs, conversion rates, and any mandatory participation requirements for franchisees.
- Research alternative lead generation strategies and estimate their associated costs.
- Consult with marketing professionals experienced in the fitness industry to develop a comprehensive lead generation plan.
FDD Citations:
- Item 19: "Our Affiliate Owned Clubs began paid lead generation in June of 2024."
Vague Definition of "Gross Sales"
Low
Explanation:
- While the FDD defines "Gross Sales," it only refers to the revenue reported by affiliate-owned clubs. It doesn't specify how "reported revenues and receipts" are calculated, which could lead to inconsistencies and make comparisons difficult.
Potential Mitigations:
- Request clarification from the franchisor on the precise definition of "reported revenues and receipts." Ask for examples of what is included and excluded from this calculation.
- Consult with an accountant familiar with franchise accounting practices to understand the potential implications of this vague definition.
FDD Citations:
- Item 19: "'Gross Sales' means the total reported revenues and receipts from the sale of all products and services sold through the Affiliate-Owned Clubs during the Measurement Period, as reported to us by the Affiliate-Owned Clubs."
Legal & Contract Risks
3 risks identified
1
2
Unenforceable Non-Compete in North Dakota
Medium
Explanation:
- The FDD states that non-compete covenants are generally unenforceable in North Dakota. This limits the franchisor's ability to protect its brand and trade secrets in that state after the franchise agreement terminates.
Potential Mitigations:
- Carefully review the specific non-compete language in the franchise agreement to understand its limitations in North Dakota.
- Consider alternative protective measures, such as strong confidentiality agreements and trade secret protection strategies, to mitigate the risk of former franchisees competing unfairly.
- Consult with legal counsel specializing in North Dakota franchise law to explore options for maximizing protection within the legal framework.
FDD Citations:
- Item 17(r) Summary: "Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota."
Arbitration Venue in North Dakota
Low
Explanation:
- The FDD indicates that arbitration venue in North Dakota will be determined by mutual agreement, subject to North Dakota Franchise Investment Law and the Federal Arbitration Act. This could lead to disputes over the location of arbitration proceedings.
Potential Mitigations:
- Negotiate a pre-determined arbitration venue in the franchise agreement to avoid future disagreements.
- Clearly define the process for selecting an arbitrator in the agreement.
FDD Citations:
- Item 17(u) Summary: "To the extent required by North Dakota Franchise Investment Law (unless such requirement is preempted by the Federal Arbitration Act), arbitration will be at a site to which we and you mutually agree."
Choice of Forum in North Dakota
Low
Explanation:
- The FDD allows franchisees to commence legal action in any court of competent jurisdiction, including North Dakota courts, to the extent allowed by North Dakota Franchise Investment Law. This could expose the franchisor to lawsuits in potentially unfavorable jurisdictions.
Potential Mitigations:
- Review the North Dakota Franchise Investment Law to understand the limitations on choice of forum clauses.
- Consult with legal counsel to assess the potential risks of litigation in North Dakota courts.
FDD Citations:
- Item 17(v) Summary: "However, to the extent allowed by North Dakota Franchise Investment Law, you may commence any cause of action against us in any court of competent jurisdiction, including the state or federal courts of North Dakota."
Territory & Competition Risks
3 risks identified
2
1
Non-Exclusive Territory
High
Explanation:
- The FDD explicitly states that the franchisee will NOT receive an exclusive territory. This means other Golf Envy franchises could be located nearby, potentially creating direct competition and cannibalizing sales.
- The FDD states "While we will not open, locate, or license any third party the right to open or locate a Club at a permanent physical Premises in your Designated Territory, your Site Selection Area and Designated Territory may overlap with the Site Selection Area or Designated Territory of another franchisee." This overlap creates ambiguity and potential for conflict during the site selection process.
Potential Mitigations:
- Carefully review the FDD and the proposed Designated Territory map to understand the proximity of existing or planned franchise locations. Negotiate for the largest possible Designated Territory.
- Discuss with the franchisor their development plans for surrounding areas to assess the potential for future encroachment.
- Conduct thorough market research to identify local competitors and assess the market's capacity to support multiple Golf Envy locations.
FDD Citations:
- Item 12: "You will not receive an exclusive territory. You may face competition from other franchisees..."
- Item 12: "While we will not open...your Site Selection Area and Designated Territory may overlap with the Site Selection Area or Designated Territory of another franchisee."
Competition from Other Channels
High
Explanation:
- The franchisor reserves the right to operate or license other businesses, including those offering similar services, even within the franchisee's territory, under different trademarks. This poses a direct competitive threat.
- The franchisor also retains the right to sell products and services through other channels like online sales, potentially undermining the franchisee's local business.
Potential Mitigations:
- Clarify with the franchisor the types of businesses they operate or intend to operate in the future and their potential impact on the franchisee's business.
- Negotiate for restrictions on the franchisor's ability to compete directly within the Designated Territory, particularly with similar concepts.
- Understand the franchisor's e-commerce strategy and any potential impact on in-store sales.
FDD Citations:
- Item 12: "We and our affiliates also have the right to operate, and grant franchises or licenses to others to locate, golf simulator businesses and other businesses offering similar services in your Territory under trademarks other than the Proprietary Marks."
- Item 12: "...use and authorize others to use the Marks and the Franchise System anywhere in the world (other than to locate a physical Club in your Designated Territory), including in connection with the sale of products and services... including through other channels of distribution such as... the internet (e-commerce)..."
Franchisor's Right to Deny Relocation
Medium
Explanation:
- The franchisor has the absolute right to refuse a franchisee's request to relocate their business, even if the current location proves unprofitable.
Potential Mitigations:
- Carefully evaluate the proposed location's long-term viability before signing the Franchise Agreement.
- Negotiate for clearly defined criteria under which relocation might be approved.
FDD Citations:
- Item 12: "You must operate your Business only at the approved location and may not relocate your Business without first obtaining our written consent, which we may withhold for any reason."
Regulatory & Compliance Risks
5 risks identified
1
3
1
Lack of Franchisor Operating Experience
High
Explanation:
- The franchisor, Golf Envy Franchising, LLC, is a new company founded in 2024 and has no prior experience operating a fitness club or any other business. This lack of experience poses a significant risk to franchisees as the franchisor may not have the necessary expertise to provide adequate support and guidance.
- The parent company, Zeze Holdings, LLC, is also new (formed in November 2024) and lacks franchising experience. This further compounds the risk as there is limited proven success to rely on.
- The FDD explicitly states "We do not currently operate, nor have we in the past operated, a Club similar to those offered to our franchisees, or any other type of business."
Potential Mitigations:
- Thoroughly research the management team's backgrounds and experience in related fields. Look for evidence of transferable skills and a strong understanding of the fitness industry.
- Seek legal counsel to review the Franchise Agreement and ensure adequate protections are in place in case the franchisor fails to meet its obligations.
- Connect with existing franchisees (if any) to gather their feedback on the franchisor's support and performance.
- Carefully evaluate the franchisor's business plan and financial projections to assess the viability of the concept and the franchisor's ability to provide ongoing support.
FDD Citations:
- Item 1: "We do not currently operate, nor have we in the past operated, a Club similar to those offered to our franchisees, or any other type of business."
- Item 1: "We were formed as a limited liability company in the State of California on May 7, 2024."
- Item 1: "Our parent company is Zeze Holdings, LLC, a California limited liability company formed in November 2024… Zeze Holdings, LLC has not offered franchises in this or in any line of business."
Limited Financial History and Stability
Medium
Explanation:
- The franchisor is a new company with limited financial history. This makes it difficult to assess its financial stability and ability to fulfill its obligations to franchisees.
- While Item 3 clarifies bankruptcy history, it doesn't provide insight into current financial health or ability to withstand economic downturns.
Potential Mitigations:
- Request audited financial statements from the franchisor and carefully review them with a financial advisor.
- Inquire about the franchisor's funding sources and financial projections.
- Negotiate stronger financial guarantees or performance benchmarks within the Franchise Agreement.
FDD Citations:
- Item 3: "Neither the franchisor... during the 10-year period immediately before the date of the offering circular: (a) filed as debtor..." (Implies limited history)
- Item 1: "We were formed as a limited liability company... on May 7, 2024."
Unclear Regulatory Compliance Burden
Medium
Explanation:
- Item 8 lists various requirements (maintenance, insurance, advertising, etc.) but lacks detail on specific regulations and compliance procedures. This makes it difficult for potential franchisees to understand the full scope of their regulatory obligations and associated costs.
Potential Mitigations:
- Request detailed information from the franchisor regarding all applicable federal, state, and local regulations.
- Consult with legal counsel specializing in franchise law and regulatory compliance to assess the potential risks and costs.
- Develop a comprehensive compliance plan and budget to ensure adherence to all regulations.
FDD Citations:
- Item 8: General listing of requirements without specific regulatory details.
Potential for Disputes Over Franchise Agreement Terms
Medium
Explanation:
- Item 8 references various sections of the Franchise and Area Development Agreements related to operational requirements. Without seeing the full agreements, there's a risk that certain clauses could be overly restrictive or ambiguous, leading to potential disputes between the franchisor and franchisees.
Potential Mitigations:
- Carefully review the full Franchise Agreement and Area Development Agreement with legal counsel before signing.
- Seek clarification on any ambiguous or concerning clauses.
- Negotiate changes to the agreement if necessary to protect your interests.
FDD Citations:
- Item 8: References to specific sections within the Franchise and Area Development Agreements without providing the full text.
Trademark Infringement Risk
Low
Explanation:
- The FDD mentions the franchisor uses the name "Golf Envy." There's a risk that this name could infringe on existing trademarks, leading to legal challenges and potentially requiring a name change, which could impact branding and marketing efforts.
Potential Mitigations:
- Conduct a thorough trademark search to ensure the name "Golf Envy" is not already registered or in use by another company in a similar industry.
- Consult with a trademark attorney to assess the risk of infringement and secure necessary trademark protections.
FDD Citations:
- Item 1: "We do business under our corporate name and as 'Golf Envy'."
Franchisor Support Risks
3 risks identified
2
1
Lack of Marketing Fund Transparency and Control
High
Explanation:
- The franchisor has complete control over the Marketing Fund and its expenditures, with no obligation to provide a detailed accounting of how funds are used. This lack of transparency creates a risk of mismanagement or misallocation of funds, potentially impacting the effectiveness of marketing efforts.
- While unaudited financial statements are available upon request, this is less comprehensive than regular audited statements and may not provide sufficient oversight.
- The franchisor can reimburse itself and its affiliates for salaries, benefits, and overhead from the Marketing Fund, raising concerns about potential conflicts of interest and the prioritization of franchisor expenses over franchisee marketing needs.
Potential Mitigations:
- Request and carefully review the Marketing Fund's unaudited financial statements. Compare year-over-year spending and look for any irregularities or excessive administrative costs.
- Communicate with other franchisees to understand their experiences with the Marketing Fund and whether they feel it is being effectively managed.
- Negotiate for greater transparency and input into Marketing Fund decisions, potentially through a franchisee advisory council.
FDD Citations:
- Item 11: "We will provide unaudited financial statements of the Marketing Fund upon reasonable request. We are not obligated to provide periodic accounting of how fees are spent."
- Item 11: "We may reimburse ourselves or pay our affiliates or other designees from the Marketing Fund for the reasonable salaries and benefits of personnel..."
- Item 7: "We will review and approve any advertising and marketing materials and programs that you develop or desire to implement..."
Mandatory Local Advertising Spending Requirement
Medium
Explanation:
- The required minimum monthly local advertising spend of $3,000 could be a significant burden, especially for new franchisees or those in smaller markets. This fixed cost may not be flexible enough to adapt to local market conditions or individual franchise performance.
- While the franchisor provides guidelines, the ultimate responsibility for planning and executing local advertising falls on the franchisee, adding to their workload and requiring marketing expertise.
Potential Mitigations:
- Develop a detailed local marketing plan and budget before opening to ensure the $3,000 minimum is spent effectively. Explore cost-effective advertising options like social media and local partnerships.
- Negotiate with the franchisor for flexibility in the local advertising requirement, particularly during the initial startup phase.
- Seek guidance from the franchisor or experienced franchisees on successful local marketing strategies.
FDD Citations:
- Item 11: "You must meet the minimum monthly spending requirement we impose (currently, $3,000 per month) to advertise and promote your Business..."
Limited Post-Opening Support for Area Developers
High
Explanation:
- The franchisor explicitly states they are not obligated to provide any assistance to area developers once operational. This lack of ongoing support could be detrimental to the success of multi-unit franchisees, especially when facing challenges in managing multiple locations.
- Area developers invest significantly more capital and take on greater risk, and the absence of continued support could leave them vulnerable.
Potential Mitigations:
- Negotiate for specific post-opening support provisions in the Area Development Agreement, outlining the type and duration of assistance to be provided.
- Develop strong internal management and operational systems to minimize reliance on franchisor support.
- Network with other area developers to share best practices and provide mutual support.
FDD Citations:
- Item 11: "We are not obligated to provide any assistance to your Business once operational under the Area Development Agreement."
Exit & Transfer Risks
7 risks identified
2
3
2
Financial Instability of Franchisor
High
Explanation:
- The South Dakota addendum reveals that the franchisor's financial condition is deemed inadequate by the South Dakota Securities Regulation Office to fulfill its obligations to franchisees. This raises serious concerns about the franchisor's overall financial stability and its ability to provide ongoing support and resources to franchisees.
- Deferring initial franchise fees until after the business opens suggests a cash flow problem and potential inability to meet initial development obligations.
Potential Mitigations:
- Request audited financial statements from the franchisor and carefully review them with a financial professional. Assess their current financial health, debt levels, and cash flow.
- Inquire about the reasons for the South Dakota requirement and seek clarification on how the franchisor plans to improve its financial standing.
- Consider negotiating stronger guarantees or protections in the franchise agreement regarding franchisor support and resource allocation.
FDD Citations:
- South Dakota Addendum: "The South Dakota Securities Regulation Office has determined that the franchisor’s financial condition is not adequate to fulfill its obligations to franchisees at this time."
Unenforceable Non-Compete in North Dakota
Medium
Explanation:
- The FDD states that non-compete covenants are generally unenforceable in North Dakota. This poses a risk for franchisees in that state, as it limits the franchisor's ability to protect its brand and prevent former franchisees from directly competing with existing ones.
Potential Mitigations:
- If operating in North Dakota, understand the implications of the unenforceable non-compete clause and consider alternative strategies for protecting your market share, such as strong brand building and customer loyalty programs.
- Discuss with the franchisor what alternative protections, if any, are in place in North Dakota.
FDD Citations:
- Item 17(r): "Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota."
Choice of Law Conflicts
Medium
Explanation:
- The Rhode Island addendum highlights a conflict between the Franchise Agreement's choice of California law and Rhode Island Franchise Investment Law. Rhode Island law may void provisions restricting jurisdiction or venue to a forum outside Rhode Island or requiring application of another state's laws.
- This creates uncertainty about which state's laws will govern the franchise relationship and could lead to legal disputes.
Potential Mitigations:
- Consult with legal counsel specializing in franchise law in both California and Rhode Island to understand the potential implications of this conflict.
- If operating in Rhode Island, be prepared for potential litigation in Rhode Island courts and under Rhode Island law.
FDD Citations:
- Rhode Island Addendum: "Even though our Franchise Agreement and Development Agreement provide that the laws of California apply, the Rhode Island Franchise Investment Law may supersede these agreements…"
Pending Registrations
Medium
Explanation:
- Exhibit J indicates several states have "Pending" registrations for the FDD. Operating in a state with a pending registration creates uncertainty about the legal status of the franchise offering and could expose the franchisee to risks.
Potential Mitigations:
- Do not sign a franchise agreement or invest until the FDD is registered in your state.
- Inquire about the timeline for registration in the relevant states and the reasons for any delays.
FDD Citations:
- Exhibit J: "State Effective Dates" table showing "Pending" status for multiple states.
Limited Operating History
High
Explanation:
- Golf Envy was founded in 2023, indicating a very limited operating history. This lack of experience increases the risk of unforeseen challenges, operational inefficiencies, and potentially flawed business models.
- The newness of the franchise system makes it difficult to assess the long-term viability and profitability of the franchise.
Potential Mitigations:
- Thoroughly research the management team's experience and background in the fitness industry.
- Request detailed information on the franchisor's business plan, marketing strategy, and financial projections.
- Speak with existing franchisees (if any) to gain insights into their experiences and the challenges they have faced.
FDD Citations:
- Franchise Context: "Founded: 2023"
NASAA SOP Acknowledgement Impact
Low
Explanation:
- The Rider to State Addendum acknowledges the NASAA Statement of Policy (SOP) regarding franchise questionnaires and acknowledgments. This SOP aims to prevent franchisors from using these documents to waive franchisee rights under state law.
- While this is generally positive for franchisees, it also highlights the potential for conflicts between the franchise agreement and state laws.
Potential Mitigations:
- Review the specific language added to the franchise agreement in response to the NASAA SOP and ensure it adequately protects your rights under applicable state franchise laws.
- Consult with legal counsel specializing in franchise law to understand the implications of the SOP in your state.
FDD Citations:
- Rider to State Addendum: "NASAA SOP Acknowledgment" section.
Wisconsin Fair Dealership Law Impact
Low
Explanation:
- The Wisconsin Addendum modifies the Franchise Agreement to comply with the Wisconsin Fair Dealership Law. This law provides certain protections to franchisees, which could impact the franchisor's ability to terminate or not renew the agreement.
Potential Mitigations:
- If operating in Wisconsin, carefully review the Wisconsin Fair Dealership Law and understand how it affects your rights and obligations under the franchise agreement.
- Consult with legal counsel specializing in Wisconsin franchise law.
FDD Citations:
- Wisconsin Addendum: Modifications to Sections 15 and 19 of the Franchise Agreement.
Operational & Brand Risks
3 risks identified
1
2
Mandatory Marketing Fund Contribution with Limited Franchisee Control
High
Explanation:
- Franchisees are required to contribute $300 monthly to the Marketing Fund, which can be increased up to 2% of gross sales at the franchisor's discretion (Item 19).
- The franchisor has sole control over the fund's usage, with no guarantee of proportional benefit to individual franchisees. This lack of control can lead to ineffective marketing campaigns or allocation of resources to areas that don't benefit the franchisee.
- The franchisor can reimburse itself for administrative costs, salaries, and other expenses from the fund, potentially reducing the amount spent on actual marketing activities.
Potential Mitigations:
- Carefully review Item 11 and Item 19, including the franchisor's historical Marketing Fund spending and results. Request a detailed breakdown of past expenditures and their impact on franchisee sales.
- Negotiate for greater transparency and input into the Marketing Fund's strategy and budget allocation. Seek representation on a marketing advisory board.
- Consult with a franchise attorney to understand your rights and obligations regarding the Marketing Fund.
FDD Citations:
- Item 11: Description of the Marketing Fund
- Item 19: Marketing Fund contribution details and franchisor control
Mandatory Local Advertising Spend with Limited Control
Medium
Explanation:
- Franchisees are required to spend a minimum of $3,000 per month on local advertising, which may not be effective in all markets or for all franchisees (Item 19).
- While the franchisor provides guidelines, the franchisee bears the financial burden of local advertising, with no guarantee of return on investment.
Potential Mitigations:
- Negotiate for flexibility in the local advertising requirements, based on market conditions and franchisee input.
- Request detailed local marketing plans and success metrics from existing franchisees in similar markets.
- Explore co-op advertising opportunities with other franchisees to reduce costs and leverage shared resources.
FDD Citations:
- Item 19: Local advertising requirements and spending minimums
Potential for Unproven Marketing Strategies
Medium
Explanation:
- Golf Envy is a new franchise concept (founded in 2023), and its marketing strategies may not be proven or effective (Item 19).
- The FDD states no Marketing Fund contributions have been collected or expended as of December 31, 2024, indicating a lack of historical data to assess marketing effectiveness.
Potential Mitigations:
- Request a detailed marketing plan from the franchisor, including target demographics, marketing channels, and projected results.
- Seek independent marketing expertise to evaluate the franchisor's plan and identify potential weaknesses.
- Connect with existing franchisees (if any) to discuss their marketing experiences and results.
FDD Citations:
- Item 19: Description of marketing programs and fund management
- Item 3: Start-up date of the franchisor
Performance & ROI Risks
3 risks identified
1
2
Lack of Franchisee Operating History and Performance Data
High
Explanation:
- Item 20 reveals no franchised units have operated in the past three years. This lack of historical data makes it impossible to assess the potential profitability and sustainability of the franchise model.
- Projections in Table 5 are speculative without supporting evidence from actual franchisee performance.
- The absence of franchisee testimonials or financial benchmarks creates significant uncertainty about the realism of achieving projected returns.
Potential Mitigations:
- Thoroughly research the franchisor's affiliate-owned location's performance. Request detailed financial statements and operational data to understand the business model's viability.
- Consult with experienced franchise attorneys and financial advisors to evaluate the investment opportunity and assess the risks associated with a new franchise concept.
- Seek independent market research on the demand for indoor golf and entertainment in your target market. Validate the franchisor's market analysis and projections.
FDD Citations:
- Item 20, Tables 1-5: Show zero franchised units and limited company-owned history.
- Item 20, Exhibit H: Likely empty due to lack of franchisees.
Limited Franchisor Support During Pre-Opening Phase
Medium
Explanation:
- While Item 11 mentions Pop-Up Locations, it explicitly states that the franchisor's site selection criteria and guidelines do not apply to these temporary setups. This lack of support during a crucial pre-opening phase could negatively impact initial member acquisition and brand building.
- Franchisees are responsible for securing their own temporary locations and managing the logistics of setting up and operating the Pop-Up, potentially increasing the risk of operational challenges and delays.
Potential Mitigations:
- Negotiate with the franchisor for more comprehensive support during the Pop-Up phase, including assistance with site selection, marketing, and operational guidance.
- Develop a detailed Pop-Up business plan that addresses potential challenges and outlines strategies for maximizing member acquisition and brand visibility.
- Consult with other franchisees (if any exist in the future) or industry experts to gain insights into best practices for operating temporary locations and generating early revenue.
FDD Citations:
- Item 11: Discusses Pop-Up Locations and the franchisor's limited involvement.
Dependence on Franchisor's Affiliate-Owned Location Performance
Medium
Explanation:
- Item 19 defines "Gross Sales" based on the performance of affiliate-owned clubs. This creates a dependence on the franchisor's own operations, which may not be representative of future franchisee performance.
- The franchisor has an incentive to present the affiliate-owned location in the best possible light, potentially inflating revenue figures or downplaying operational challenges.
Potential Mitigations:
- Request detailed financial statements and operational data for the affiliate-owned location(s). Analyze these documents critically to assess the business model's viability and identify potential red flags.
- Consult with independent financial advisors and industry experts to evaluate the franchisor's financial representations and assess the risks associated with relying on affiliate-owned performance data.
FDD Citations:
- Item 19, Section B(1): Definition of "Gross Sales".
FDD Documents by Year
Download and view official Franchise Disclosure Documents
FDD Year: 2025
Uploaded: 8/8/2025
FDD Documents
Access and download Franchise Disclosure Documents by year