Franchisel.com — FDD Diligence Memo
EXECUTIVE RESIDENCY BY BEST WESTERN, VIB, GLO, AIDEN, SADIE; BEST WESTERN, BEST WESTERN PLUS, BEST WESTERN PREMIER, @HOME BY BEST WESTERN
Generated 2026-04-06 · 2026 FDD · Government-filed source
EXECUTIVE RESIDENCY BY BEST WESTERN, VIB, GLO, AIDEN, SADIE; BEST WESTERN, BEST WESTERN PLUS, BEST WESTERN PREMIER, @HOME BY BEST WESTERN
2026 FDD Diligence Memo
Score of 42/10 driven by: low financial transparency.
Sys Health
4
Fin Strength
5
Contract
7
Red Flags & Key Signals
More than 1 in 5 units closed or transferred. Industry benchmark is typically 5–10%. Request Item 20 detail for prior years.
Double-digit active lawsuits is unusual. Review whether franchisee-initiated cases dominate (signals system dissatisfaction) vs regulatory actions.
Franchisor chose not to include a Financial Performance Representation. Item 19 is voluntary per FTC rules. This is not automatically a negative signal — it means economics cannot be scored from the disclosure.
Franchisor is not obligated to protect your market area. Encroachment from company-owned units or other franchisees is possible.
Franchisor financial statements are audited by Ernst & Young with no going concern warning.
Investment Overview
Items 5, 6, 7Total investment range: Not disclosed. Initial fee: $0. Royalty: —. Marketing fund: —.
Item 19 — Revenue
Item 19 — not included in filed FDD (voluntary per FTC Franchise Rule)Economics not rated — Item 19 not available.
Not DisclosedThis franchisor chose not to include a Financial Performance Representation. Item 19 is voluntary per FTC rules. This does not indicate bad economics — it means revenue projections cannot be sourced from the disclosure document.
Item 20 — System Health
Item 20 — 2026 FDDModest growth — net +1 units.
→ StableSystem is expanding slowly. Closure/transfer rate of 625% is high — industry benchmark is typically 5–10%. This warrants investigation into why franchisees are exiting.
Total Units
0
Net Growth
+1
Turnover
625%
Year-over-Year Trends
2026 FDDOpened
+5
Closed
-15
Net
+1
Turnover rate: 625% — high (industry avg 5–10%)
Prior-year Item 19 revenue data not available. Unit data above covers the reporting period in the 2026 FDD.
Key Contract Terms
Item 17Item 19 Data Quality Flags
Item 19No Item 19
This franchisor did not include a Financial Performance Representation in their FDD. Item 19 is voluntary per FTC rules — absence does not indicate poor economics.
Franchisee Interview Questions
Item 20 contactsUse Item 20 to get current franchisee contact info. Call at least 3-5. Ask these questions:
15 units closed in the most recent FDD period (6 were forced terminations). Ask franchisees: what actually drove those closures — was it market conditions, operations, or franchisor decisions?
Look for: Franchisees who left voluntarily vs. those terminated. Any pattern by region, years in system, or franchisee profile.
Turnover rate is 625% — above industry average. Ask existing franchisees: do they plan to renew? Would they buy this franchise again?
Look for: Unprompted enthusiasm vs. measured or reluctant responses. Ask about year-2 and year-3 revenue vs. projections.
How responsive is your franchisor rep — do they actually help when you have a problem, or are they just checking boxes?
Look for: Specific stories (not just vague positives). Ask about a time they needed help urgently — response time matters.
If you decided to sell your franchise tomorrow, how easy would that be? Has the franchisor ever blocked or delayed a transfer you wanted?
Look for: Transfer fee surprises, right-of-first-refusal complications, or franchisor demanding upgrades before approving a sale.
What did your revenue look like in year 1 vs. year 2 vs. now? When did you reach breakeven?
Look for: Year 1 revenue is typically well below Item 19 averages (which often exclude ramp-up units). Expect 12-24 months to reach average.
What did the training actually cover vs. what you needed on day 1? What do you wish you'd learned before opening?
Look for: Gap between training content and operational reality. New franchisees often report the training covered theory but not real-world situations.
Territory — Item 12
NO exclusive territory — encroachment risk exists; franchisor reserves online/ecommerce sales.
Item 12 · 2026 FDD
Data sources: 2026 Franchise Disclosure Document filed with a state franchise regulator (government record). Source: Extracted from 2026 FDD filed with MN CARDS (file #9265). Source: 9265-2026.pdf. · Payback estimates and margin assumptions are editorial — not from the FDD. This memo does not constitute legal or financial advice. Consult a franchise attorney and accountant before signing. Generated 2026-04-06 by Franchisel.com.