How to Read Strategic Franchising Systems' 2024 FDDs

Deciding to own a franchise involves a crucial assessment and a deep understanding of the franchise details provided in their respective Franchise Disclosure Documents (FDDs). These documents are vital resources, providing future franchisees with detailed information about what to expect. However, with hundreds of pages of critical data, diving into the FDDs can seem daunting.

To assist potential franchise owners in navigating this process, we've broken down the key sections of the FDDs for the five Strategic Franchising Systems brands: The Growth Coach, Fresh Coat Painters, TruBlue Home Service Ally, Caring Transitions and Pet Wants.

Understanding the FDD: A Section-by-Section Guide

Item 1: The Franchisor, Its Predecessors, and Affiliates

This section provides a background on the franchisor, detailing the company’s history, structure, and business model. It helps candidates understand the depth and breadth of the franchisor's industry experience.

• The Growth Coach offers business and sales coaching, executive coaching, business management and consulting services to business owners, managers and executives.
• Fresh Coat Painters specializes in residential and commercial painting services.
• TruBlue Home Service Ally provides residential maintenance and repair services.
• Caring Transitions focuses on senior relocation, estate sales and downsizing services.
• Pet Wants sells fresh, high-quality pet food and supplies through retail locations and home delivery.

Item 2: Business Experience

Detailed bios of key leadership team members are provided in this section. Understanding the experience and stability of the franchise’s leadership is crucial for assessing the franchise's direction and support structure.

• The Growth Coach
  • President, Director: Chris Seman
    • Seman has been president of The Growth Coach since August 2021. He has been a member of the Board of Directors of affiliates Fresh Coat and TruBlue since February 2019. He served as president of Caring Transitions from February 2012 through February 2019 and has been president of strategic franchising in Cincinnati, Ohio, since March 2019.
  • Chief Operating Officer: Brad Schneider
    • Schneider has been chief operating officer of The Growth Coach since January 2023. He has owned and operated a Growth Coach franchise in Columbus, Ohio, since May 2015.
  • Vice President of Brand Development: Peter Eberly
    • Eberly has been vice president of The Growth Coach and its affiliates Caring Transitions, TruBlue, Fresh Coat and Pet Wants since August 2023. He previously served as senior director of marketing for Aeroseal in Miamisburg, Ohio, from April 2021 through May 2023.
• Fresh Coat Painters
  • Brand President: Lisa Hudson
    • Hudson has been brand president of Fresh Coat since March 2024, having previously served as executive vice president starting in October 2023. From August 2021 through November 2023, she was president of Lyssé New York in Indianapolis, Indiana. Hudson was president and a member of the Board of Directors of The Growth Coach from February 2019 through October 2021. She owned and operated a Growth Coach franchise in Noblesville, Indiana, from November 2015 through May 2019.
  • Vice President of Sales: Leo Haley
    • Haley has been vice president of sales for Fresh Coat since January 2022. From October 2014 through December 2021, he was with the Blue Book Building & Construction Network in Columbus, Ohio, serving as area general manager, regional director and regional business development manager.
  • Senior Vice President of National Accounts, Commercial Division: Greg Platz
    • Platz has been vice president of national accounts for Fresh Coat since November 2019. From September 2008 through December 2015, he served as Fresh Coat’s operations manager, director of operations and vice president of operations. Platz served as president of TruBlue from February 2016 through November 2019.
• TruBlue Home Service Ally
  • President, Director: Sean Fitzgerald
    • Fitzgerald has been president of TruBlue since November 2019. He previously served as chief development officer for FYZICAL Therapy & Balance Centers in Sarasota, Florida, from May 2019 to November 2019. From September 2014 to May 2019, he was chief development strategist for No Limit Agency and 1851 Franchise Magazine in Chicago, Illinois.
  • Director of Operations: Greg Haskett
    • Haskett has been director of operations for TruBlue since January 2021. He previously served as deputy director at the American Red Cross from July 2019 to January 2021. Haskett held numerous positions with HomeTeam Inspection Service and House Doctors Handyman Service from 1994 through 2018.
  • Senior Director of Franchise Development: Melissa Young
    • Young has been senior executive director of franchise development for TruBlue since September 2019. She was a new homes sales consultant for Maronda Homes from October 2018 through September 2019.
• Caring Transitions
  • President, Director: Ray Fabik
    • Fabik has been president and a member of the Board of Directors of Caring Transitions since February 2019. Fabik was president of The Growth Coach from August 2015 through February 2019 and served as its chief operating officer from July through August 2015.
  • Vice President of Operations: Joe Lewandowski
    • Lewandowski has been vice president of operations for Caring Transitions since February 2022 and was its director of operations from July 2017 through January 2022.
  • Vice President of Franchise Development: James Stapleton
    • Stapleton has been vice president of development for Caring Transitions since June 2019. He joined Regus in December 2012, where he served as general manager, Cincinnati area manager and Dayton/Cincinnati area sales team lead until June 2019.
• Pet Wants
  • President: DeNita Carani
    • Carani has been president of Pet Wants since October 2022. She was senior director of franchise operations for Jovie (formerly known as College Nannies & Sitters) from March 2020 through October 2022 and owned a College Nannies & Sitters franchised business in Atlanta, Georgia, from January 2010 through March 2020.
  • Vice President of Operations: Jessica Riedy
    • Riedy has been vice president of operations for Pet Wants since January 2024. She was area manager of Partners Personnel from December 2021 through January 2024 and director of operations for Evolution Process Service in Indianapolis, Indiana, from August 2021 through December 2021.
  • Vice President of Franchise Development: Walter Lacey
    • Lacey has been vice president of franchise development for Pet Wants since March 2023. He was franchise development manager with Self Esteem Brands from February 2019 to March 2023 and franchise business consultant from November 2016 through February 2019.

Item 3: Litigation

This section discloses any legal issues involving the franchisor. A clean or minimal litigation history can be indicative of a well-managed company.

• All five Strategic Franchising Systems brands report minimal litigation, emphasizing their commitment to ethical and legal compliance.

Item 4: Bankruptcy

This item discloses any bankruptcy history of the franchisor or its management. A history of bankruptcy could indicate financial instability.

• None of the brands under Strategic Franchising Systems report any history of bankruptcy, reflecting their financial stability and robust business models.

Item 5: Initial Fees

This section outlines the upfront costs associated with purchasing the franchise, crucial for financial planning.

• The Growth Coach: Initial franchise fee starts at $39,900.
• Fresh Coat Painters: Initial franchise fee of $44,900.
• TruBlue Home Service Ally: Initial franchise fee of $44,900.
• Caring Transitions: Initial franchise fee of $48,900.
• Pet Wants: Initial franchise fee of $38,500.

Item 6: Other Fees

Ongoing fees, including royalties and marketing contributions, are detailed here, providing clarity on the long-term financial commitments involved.

• The Growth Coach
  • Royalty Fee: The greater of 10% of gross revenues or a minimum of $750 per month for the first 12 months, increasing to $1,000 per month thereafter.
  • National Branding Fund: 2% of gross revenues.
  • Technology/Software License Fee: $125 per month.
• Fresh Coat Painters
  • Royalty Fee: 6% of gross revenues for the first $1,000,000 of annual gross revenues, decreasing to 5% for revenues between $1,000,000 and $2,000,000, and 4% for revenues over $2,000,000. The minimum monthly royalty is $500 for the first 12 months, then $1,000 thereafter.
  • National Branding Fund: 2% of gross revenues with a $350 monthly minimum.
  • Technology/Software License Fee: $499 per month.
• TruBlue Home Service Ally
  • Royalty Fee: 6% of gross revenues with a minimum of $500 per month for the first 12 months, increasing to $1,000 per month thereafter.
  • National Branding Fee: 2% of gross revenues with a $500 monthly minimum.
  • Technology Fee: $195 per month.
• Caring Transitions
  • Royalty Fee: 6% of gross receipts with a minimum of $300 per month for the first 12 months, increasing to $500 per month thereafter.
  • National Branding Fund: 2% of gross receipts with a $350 monthly minimum.
  • Technology/Software License Fee: $250 per month.
• Pet Wants
  • Royalty Fee: 7% of gross revenues with a minimum of $350 per month for the first 12 months, increasing to $1,000 per month thereafter.
  • National Branding Contribution: 2% of gross revenues with a $250 monthly minimum for the first 12 months, increasing to $350 per month thereafter.
  • Technology Fee: Varies based on services provided.

Item 7: Estimated Initial Investment

This crucial section helps prospective owners understand the total financial requirement to start a franchise, including detailed breakdowns of potential costs.

• The Growth Coach: Total initial investment ranges from $54,000 to $75,900.
• Fresh Coat Painters: Total initial investment ranges from $71,150 to $101,250.
• TruBlue Home Service Ally: Total initial investment ranges from $70,050 to $96,400.
• Caring Transitions: Total initial investment ranges from $63,562 to $108,612.
• Pet Wants: Total initial investment ranges from $137,850 to $219,000.

Item 8: Restrictions on Sources of Products and Services

This section details supplier restrictions and product sourcing, which are vital for operational planning. 

• Each brand specifies approved suppliers and mandates certain standards to maintain consistency and quality across the franchise network.

Item 9: Franchisee’s Obligations

This section outlines the operational responsibilities of the franchisee under the franchise agreement, ensuring candidates are aware of their commitments. 

• All brands emphasize adherence to operational standards, active participation in training and compliance with branding guidelines.

Item 10: Financing

Information about any financing provided by the franchisor is crucial for financial planning.

• None of the brands under Strategic Franchising Systems offer direct or indirect financing, meaning franchisees need to secure their own funding.

Item 11: Franchisor's Assistance, Advertising, Computer Systems and Training

This item details the support provided by the franchisor, which is critical for running the franchise successfully.

• Comprehensive training programs, ongoing support and access to marketing materials are common across all brands.

Item 12: Territory

Franchisees must understand the territorial rights granted, which can affect market potential.

• Each brand ensures defined and protected territories, allowing franchisees to operate without internal competition in their designated areas.

Item 13: Trademarks

Understanding the rights to use the franchisor’s trademarks is crucial for marketing and branding.

• All brands provide extensive rights to use their trademarks and branding materials, ensuring consistency and brand recognition across the franchise network.

Item 14: Patents, Copyrights and Proprietary Information

This section discloses any patents, copyrights or proprietary information owned by the franchisor. This can be another indicator of the unique value and competitive advantage of the franchise.

Item 15: Obligation To Participate in the Actual Operation of the Franchise Business

This item, which details the franchisee's role in day-to-day operations, is crucial for setting expectations.

• All Strategic Franchising Systems brands require active participation in daily operations to ensure quality control and operational consistency.

Item 16: Restrictions on What the Franchisee May Sell

This section details any restrictions on the goods or services the franchise owner can offer. Franchise owners should ensure these restrictions align with their business goals.

Item 17: Renewal, Termination, Transfer and Dispute Resolution

This item outlines the terms for renewal or termination of the franchise agreement, transfer of the franchise and dispute resolution procedures. It's vital to understand these terms up front as a franchise agreement is a long-term commitment and one that should be taken very seriously.

All brands provide detailed conditions under which the franchise agreement may be renewed or terminated, offering legal insight for potential and current franchisees.

Item 18: Public Figures

This section discloses any public figures used in promoting the franchise. Knowing this can help franchise owners understand the marketing strategies of the franchisor.

Item 19: Financial Performance Representations

This section provides insights into the financial performance of existing franchises, which is vital for setting realistic expectations. Below are key financial performance representations for each brand under Strategic Franchising Systems:

• The Growth Coach:
  • Average Gross Revenue for the top third of franchisees: $208,710
  • Highest Gross Revenue: $283,145
  • Average Gross Revenue (Cumulative): $97,847 for 2023
• Fresh Coat Painters:
  • Average Gross Revenue: $632,895
  • Highest Gross Revenue: $1,748,903
  • Average Gross Profit Percentage: 43.19%
• TruBlue Home Service Ally:
  • Average Gross Revenue for the top quartile of franchisees: $646,011
  • Highest Gross Revenue: $1,081,967
  • Cumulative Average Gross Revenue: $319,810?
• Caring Transitions:
  • Average Gross Receipts: $299,400
  • Highest Gross Receipts: $2,454,270
  • Average Gross Profit Percentage: 63%
• Pet Wants:
  • Average Gross Revenue for the top quartile of store franchises: $1,111,268
  • Highest Gross Revenue: $1,720,511
  • Average Gross Revenue (Cumulative): $1,111,268 for 2023?

Item 20: Outlets and Franchisee Information

Data on the number of franchised and company-owned outlets provides insight into the health and expansion of the franchise network.

• The Growth Coach
  • 2021: 53 outlets at the start of the year, 45 at the end of the year (-8 net change).
  • 2022: 45 outlets at the start of the year, 46 at the end of the year (+1 net change).
  • 2023: 46 outlets at the start of the year, 36 at the end of the year (-10 net change).
• Fresh Coat Painters
  • 2020: 154 outlets at the start of the year, 165 at the end of the year (+11 net change).
  • 2021: 165 outlets at the start of the year, 174 at the end of the year (+9 net change).
  • 2022: 174 outlets at the start of the year, 166 at the end of the year (-8 net change).
• TruBlue Home Service Ally
  • 2021: 46 outlets at the start of the year, 71 at the end of the year (+25 net change).
  • 2022: 71 outlets at the start of the year, 84 at the end of the year (+13 net change).
  • 2023: 84 outlets at the start of the year, 94 at the end of the year (+10 net change).
• Caring Transitions
  • 2021: 219 outlets at the start of the year, 240 at the end of the year (+21 net change).
  • 2022: 240 outlets at the start of the year, 272 at the end of the year (+32 net change).
  • 2023: 272 outlets at the start of the year, 314 at the end of the year (+42 net change).
• Pet Wants
  • 2021: 102 outlets at the start of the year, 138 at the end of the year (+36 net change).
  • 2022: 138 outlets at the start of the year, 138 at the end of the year (0 net change).
  • 2023: 138 outlets at the start of the year, 146 at the end of the year (+8 net change)?.

Item 21: Financial Statements

Franchisors must provide their financial statements, which can be reviewed with an advisor to assess the franchisor's financial health.

Item 22: Contracts

This section includes copies of contracts the franchisee will be required to sign, emphasizing the importance of legal review.

Item 23: Receipt

This acknowledges the receipt of the FDD by the prospective franchisee, ensuring compliance with regulatory requirements.

Reviewing the FDD Thoroughly

Overall, the FDD is a critical document filled with essential information for prospective franchise owners. It’s important to read and understand each section fully, seek legal advice where necessary and ensure you are well-informed about this significant business decision. By understanding each section of the FDDs for The Growth Coach, Fresh Coat Painters, TruBlue Home Service Ally, Caring Transitions and Pet Wants, prospective franchisees can make well-informed decisions that align with their business goals and financial capabilities.

For more information about franchise opportunities with Strategic Franchising Systems, visit https://strategicfranchising.com/.