ACFN Franchised Inc. Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$37,838 - $59,921
Franchise Fee
$24,000
Total US Locations
233
Business Summary
ACFN operates a network of automated teller machines (ATMs) and provides related financial transaction processing services to businesses and individuals. ACFN franchisees market these ATM services to hotels, retail locations, and other entertainment and travel-based businesses. Franchisees install ATMs at these host locations and are responsible for all services and maintenance required for the ATMs.
Corporate History
ACFN Franchised Inc. was formed as a California corporation in December 2002. The ACFN franchise system is modeled after an ATM business previously operated by their former affiliate, A.F.F.A. Inc. (AFFA), which operated company-owned ATMs from 1996 to 2011. ACFN Franchised Inc. began offering ACFN franchises for sale in February 2003. In December 2019, ACFN Franchised Inc. acquired all rights to the ACFN trademark and other associated marks from AFFA, which was dissolving. ACFN Franchised Inc. primarily acts as the franchisor and does not operate ACFN businesses itself, though it or its affiliates may acquire and operate existing ATMs and locations for potential sale to franchisees.
Financial Overview
Investment Range
$37,838 - $59,921
Franchise Fee (Low)
$24,000
Franchise Fee (High)
$25,000
Royalty %
1%
Marketing %
1%
Equipment Costs (Low)
$4,889
Equipment Costs (High)
$14,472
Working Capital
$1,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The FDD's Special Risks section highlights that ACFN Franchised Inc.'s financial condition, as shown in its financial statements, raises questions about its ability to provide services and support to franchisees. The balance sheets consistently show that ACFN Franchised Inc.'s total liabilities and current liabilities significantly exceed its total assets and current assets, respectively, resulting in a substantial stockholders' deficit across all reported periods. For example, as of September 30, 2024, ACFN Franchised Inc. reported total liabilities of over $3 million against total assets of approximately $1.8 million, with a stockholders' deficit of over $1.1 million. The auditors, while providing an unqualified opinion, are required to conclude on whether there are conditions that raise substantial doubt about the Company's ability to continue as a going concern, though this specific qualification is not stated in their opinion. Additionally, ACFN Franchised Inc. noted adverse impacts on its business due to the COVID-19 pandemic during 2021 and the nine months ended September 30, 2022.
Financing Details
ACFN Franchised Inc. may offer financing for a portion of the initial franchise fee. This financing is provided through a promissory note, allowing franchisees to finance up to $10,000 of the $25,000 initial franchise fee. The financed amount is payable over a 3-year term in equal monthly installments with an annual interest rate of 9.9%. If the franchisee's business is a legal entity, the promissory note must be individually guaranteed by all partners or shareholders. The note is secured by a security interest in the Franchise Agreement. In case of late payments, a penalty of 18% per annum may be charged, and ACFN Franchised Inc. can deduct overdue installments directly from ATM transaction surcharge revenue. If a default occurs, all unpaid amounts may become immediately due, and ACFN Franchised Inc. can terminate the franchise and collect attorneys' fees and collection costs.
Performance Metrics
Total US Locations
233
Franchised Units
233
Corporate Units
0
Franchising Since
2003
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
ACFN Franchised Inc. has no litigation to report. The FDD explicitly states that no litigation is required to be disclosed in Item 3.
Bankruptcy History
ACFN Franchised Inc. has no bankruptcy history. The FDD explicitly states that no bankruptcies are required to be disclosed in Item 4.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise, ACFN franchisees must substantially comply with their existing Franchise Agreement throughout its term. They must also agree to acquire a successor franchise under ACFN Franchised Inc.'s then-current franchise agreement, which may have different terms and conditions. As part of this, franchisees are required to add or replace equipment and modify their business to meet current ACFN standards and specifications. A successor franchise fee of $10,000 is also required. Franchisees must provide written notice of their intent to renew between six and twelve months before their current agreement expires. They will also need to sign a general release of claims against ACFN Franchised Inc. and its affiliates.
Training & Support Program
Franchisor Assistance
ACFN Franchised Inc. provides franchisees with various forms of assistance. Before opening, ACFN Franchised Inc. grants the franchise, provides access to its Operations Manual and Methods of Operation, and delivers initial training, which includes guidance on standards, purchasing, marketing, employee training, and administrative procedures. ACFN Franchised Inc. also processes all ATM transactions and helps approve potential ATM locations. After opening, ACFN Franchised Inc. offers ongoing support through telephone consultations, buying advisory services, and continuous marketing programs. They may also provide newsletter services, host meetings, seminars, or conventions, and conduct research and development for operational improvements. Additional guidance and assistance are available upon request, which may incur per diem or hourly fees, including for special employee training.
Initial Training Hours
8.5
Training Location
Virtual
Ongoing Support
After opening, ACFN Franchised Inc. provides ongoing support through telephone consultations during specified hours, buying advisory services (lists of sources and approved suppliers), and ongoing marketing programs. ACFN Franchised Inc. may also, at its option, provide newsletter services to inform franchisees about program events, and host meetings, seminars, or conventions for business or social purposes. They also conduct research and development for operational methods. Franchisees can request additional guidance and assistance, which may incur fees, including per diem charges for franchisor personnel or hourly fees as mutually agreed.
Franchise Requirements
Ideal Candidate Profile
ACFN Franchised Inc. seeks franchisees who are capable of undertaking the investment and effort required to own and operate an ACFN business. The ideal candidate must appoint a 'Managing Owner' who is one of the business owners and has the authority to legally bind the franchisee and ensure compliance with the agreement. This Managing Owner is required to personally manage and operate the franchise, using their best efforts to promote and enhance the business, and may not delegate their management responsibility without prior written consent from ACFN Franchised Inc. The franchisee and its owners must agree to deal exclusively with ACFN Franchised Inc. and not have interests in any competitive businesses during the franchise term. Furthermore, franchisees must maintain high standards of quality and service, continuously exert their best efforts, and comply with all operational methods and legal requirements.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Home-Based
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Staffing Notes
ACFN Franchised Inc. requires the franchisee's 'Managing Owner' to personally manage and operate the franchise, using their best efforts and not delegating their authority without prior written consent. The business must always be under the direct management and supervision of the Managing Owner or a trained and approved manager. If a manager is hired, they must successfully complete ACFN Franchised Inc.'s initial training program and agree to confidentiality and non-compete provisions. While the FDD mentions maintaining 'a suitable organization and a sufficient number of trained personnel,' it does not specify a typical staff count. The Managing Owner receives training to install and service ATMs, suggesting a hands-on technical role for the owner.