Franchisel.com — FDD Diligence Memo
Stemtree
Generated 2026-04-06 · 2025 FDD · Government-filed source
Stemtree
2025 FDD Diligence Memo
Composite score based on six FDD-derived dimensions.
Fin Strength
7
Contract
3
Red Flags & Key Signals
After leaving the franchise, you cannot operate a competing business in this radius. Evaluate the real-world impact on your exit options.
Avg $89,747 from government-filed FDD. Transparent disclosure is a positive signal.
Franchisor financial statements are audited by ey 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 — 2025 FDD (government-filed)Item 19 discloses avg revenue of $89,747 (Annual).
Sample: WeakThe FDD does not specify how many units were included in this figure. Average ($89,747) and median ($90,234) are close — the distribution appears relatively even.
Item 20 — System Health
Item 20 — 2025 FDDSystem flat — net 0 units in reporting period.
→ StableUnit count essentially unchanged.
Total Units
0
Net Growth
+0
Turnover
0%
Key Contract Terms
Item 17Item 19 Data Quality Flags
Item 19Gross sales
Figure represents gross sales — standard basis for cross-brand comparison.
Profit not disclosed
Item 19 reports revenue only. No expense breakdown is provided. Profit cannot be determined from this disclosure alone.
Subset of units reported
Item 19 samples may be limited to defined subsets (geographic subset), which affects comparability.
Sample size not specified
The FDD does not state how many units contributed to this figure.
Data is 4 years old
Revenue figures cover 2022 operations — may not reflect current market conditions.
Average and median close
Average ($89,747) and median ($90,234) are within 15% — reasonably even distribution.
Franchisee Interview Questions
Item 20 contactsUse Item 20 to get current franchisee contact info. Call at least 3-5. Ask these questions:
The agreement includes a 2-year, 25-mile post-termination non-compete. Ask franchisees: did you fully understand this when you signed — and do you feel it's fair?
Look for: Whether franchisees feel trapped. High non-compete terms reduce exit flexibility.
Cure period is only 5 days. Ask: have you ever received a default notice? How did the franchisor handle it — were they reasonable?
Look for: A short cure period combined with aggressive enforcement is a serious risk. Look for franchisees who feel supported vs. managed by threat.
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.
Data sources: 2025 Franchise Disclosure Document filed with a state franchise regulator (government record). Source: Extracted from 2025 FDD filed with WI DFI (file #638560). Source: 638560-2025-Stemtree.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.