La Diperie Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$71,700 - $483,525
Franchise Fee
$20,000
Min Cash Required
$20,000
Total US Locations
1
Business Summary
La Diperie operates traditional and non-traditional restaurants specializing in ice cream products with various dips and toppings, as well as other menu items related to the La Diperie concept. Traditional locations are typically free-standing buildings, inline retail shops, shopping malls, or street-front locations offering a full menu. Non-traditional locations are found in places like airports, amusement parks, sports venues, or college campuses, and generally offer a more limited menu.
Corporate History
MTY Franchising USA, Inc., the franchisor for La Diperie, was originally incorporated in Delaware in 2001 as The Extreme Pita Franchising USA, Inc., and later merged with a Tennessee corporation of the same name in 2019, with the Tennessee entity being the survivor. La Diperie began offering unit franchises in the United States in April 2019. The ultimate parent, MTY Food Group, Inc., is a public Canadian corporation whose subsidiary, MTY Franchising Inc. (MTY Canada), was incorporated in Canada in 1979. MTY Canada acquired the franchisor's stock in 2013. The MTY Food Group has grown significantly through a series of acquisitions since 2016, including Kahala Brands, Papa Murphy's Holdings, Inc., BBQ Holdings, Inc., and Wetzel's Pretzels, LLC, expanding its portfolio to include over 55 different restaurant concepts with thousands of units primarily in Canada and the United States.
Financial Overview
Investment Range
$71,700 - $483,525
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$25,000
Minimum Cash Required
$20,000
Royalty %
6%
Marketing %
2.5%
Equipment Costs (Low)
$11,000
Equipment Costs (High)
$342,000
Working Capital
$20,000
Audited Financials
Yes
Offers Financing
Yes
Financing Details
La Diperie does not directly offer financing or guarantee obligations, except in specific, discretionary situations. If a franchisee needs a lease guarantee for their location, the franchisor or an affiliate may, in their sole discretion, provide one. If approved, the franchisee must pay a non-refundable lease guarantee fee of 10% of the total guaranteed rental obligations, up to a maximum of $10,000, and the franchisee and their spouse or principals must personally guarantee the debt. Additionally, if a franchisee purchases a corporate-owned La Diperie restaurant 'as-is' from an affiliate, the franchisor's affiliate may finance up to 100% of the purchase price, also at their sole discretion. For these purchases, the interest rate can range from 0% to 12%, depending on factors like the franchisee's creditworthiness and the upfront payment. Repayment terms are between 12 and 60 months in equal monthly installments. This financing is secured by a first lien on all equipment and requires personal guarantees from the franchisee and their spouse or principals. Default on such financing can lead to accelerated payment, increased interest rates (18%), collection costs, franchise termination, and the affiliate's right to repossess the restaurant. Franchisees must also waive certain legal rights in a default scenario.
Performance Metrics
Total US Locations
1
Franchised Units
1
Corporate Units
0
Avg Square Footage
1,000
Franchising Since
2019
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
21
Litigation Summary
La Diperie's FDD discloses extensive litigation history involving its franchisor, MTY Franchising USA, Inc., and its affiliates, which operate many other restaurant brands. The disclosed cases cover various types of disputes, including alleged violations of franchise investment laws, misrepresentation, breach of contract, unjust enrichment, fraud, and bankruptcy proceedings. Many of these cases, such as those involving The Extreme Pita, Kahala Franchising, SweetFrog, Baja Fresh, Famous Dave's, VI BrandCo, Wetzel's Pretzels, and Papa Murphy's International, concluded with settlements or dismissals several years ago. For instance, a lawsuit against The Extreme Pita was settled for $20,000 in 2016, and a case involving Kahala Franchising was settled in 2017. A significant group of related actions against Papa Murphy's alleging misrepresentations were settled in June 2020. Several state administrative actions concerning registration and disclosure violations also occurred in past years, such as those with SweetFrog (2012) and Maui Wowi (2005, 2007). More recently, during the fiscal year ending November 30, 2024, Kahala Franchising, L.L.C. (an affiliate) initiated two lawsuits against franchisees: one for breach of contract in Illinois and another for forcible entry and detainer in Iowa. These two recent cases indicate ongoing legal activity within the broader MTY affiliate network.
Bankruptcy History
La Diperie has no bankruptcy history to report. The FDD explicitly states that no bankruptcy is required to be disclosed in Item 4.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their La Diperie franchise for a single additional term of 5 years, franchisees must meet several conditions. They must provide written notice of their intent to renew at least 120 days before the current agreement expires. The franchisee must be in complete compliance with their franchise agreement and all other agreements with the franchisor, including all financial obligations, and must not have received more than three notices of default during the term, or more than two in the five years immediately preceding the proposed renewal date. Franchisees must also maintain possession of an approved location or secure a suitable substitute. Additionally, they are required to sign the franchisor's then-current form of franchise agreement (which may have materially different terms and conditions, including higher fees), pay a renewal franchise fee equal to 50% of the then-current initial franchise fee, and agree to remodel or refurbish their location and upgrade their POS system to meet current brand standards if required. Finally, franchisees must sign a general release provided by the franchisor.
Training & Support Program
Franchisor Assistance
La Diperie provides pre-opening and post-opening assistance to its franchisees. Before opening, La Diperie may assist with site selection and approval, though the franchisee makes the final decision and is responsible for complying with local codes. They provide design drawings and specifications for the restaurant, identify approved suppliers for necessary equipment and supplies, and furnish a confidential Operations Manual. After opening, La Diperie offers a representative for up to two days during the grand opening to help with operations and marketing. The franchisor maintains an ongoing advisory relationship, consulting on marketing, merchandising, and general business operations. They provide updated operating standards and conduct periodic inspections and quality checks of the restaurant. La Diperie may also make franchisees aware of available software for administrative tasks and may require attendance at future mandatory refresher training programs, conferences, and seminars.
Initial Training Hours
80
Training Location
Online or KTEC (Kahala Training & Education Center) in Scottsdale, AZ
Ongoing Support
After opening, La Diperie franchisees receive ongoing advisory support, including consultations on marketing, merchandising, and general business operations to help improve and develop their business. La Diperie provides information on its operating and other standards, which may be modified over time. The franchisor conducts periodic inspections and quality service checks of the restaurant to maintain high and uniform standards across the system. La Diperie may also make franchisees aware of software available for administrative, bookkeeping, accounting, and inventory control. Franchisees are required to attend any future refresher or additional training programs, conferences, and seminars organized by the franchisor.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Hands-On
Territory Type
non-exclusive
Staffing Notes
La Diperie franchisees are solely responsible for all aspects of employee management, including hiring, firing, training, supervision, setting employment terms (like tasks and work schedules), and compensation. Franchisees are also responsible for maintaining employment records and ensuring employee safety. All employees who interact directly with customers must be able to speak and read English, as well as any other language necessary to serve the public effectively at the restaurant. Each La Diperie restaurant must employ at least one full-time, on-premises manager who meets the franchisor's criteria for a qualified restaurant operator. This manager must dedicate their full time during normal business hours to managing, operating, and developing the business. All personnel must uphold standards for sanitation, cleanliness, and demeanor, and wear approved uniforms. The franchisor notes that owner-operated restaurants generally perform better than those run by absentee owners with hired managers, implying a preference for active owner involvement.