Risk Score
Pending analysis
Investment Range
$504,900 - $1,118,000
Franchise Fee
$20,000
Min Cash Required
$25,000
Total US Locations
59
Business Summary
Swig™ operates drink shops that serve specialty drinks and sweets, offering customers a variety of unique beverage and dessert options.
Corporate History
Swig Franchising, LLC was established in Utah on August 24, 2022, and began offering Swig™ franchises in September 2022. The brand's operational history extends through its parent company, Savory Swig Stores, LLC, which was organized in Utah on October 7, 2016. Savory Swig Stores, LLC operates company-owned Swig™ drink shops, having grown to 45 locations across Utah, Arizona, Idaho, Oklahoma, and Texas by the end of 2022.
Financial Overview
Investment Range
$504,900 - $1,118,000
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$39,500
Minimum Cash Required
$25,000
Royalty %
7%
Marketing %
2%
Equipment Costs (Low)
$78,500
Equipment Costs (High)
$115,000
Working Capital
$37,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Swig Franchising, LLC's financial condition, as noted in the FDD's special risks section, raises questions about the company's ability to provide services and support to franchisees. For the year ended December 26, 2023, the company reported a net loss of $845,794 and had a negative member's interests (equity) of $635,794. While the auditor's report provided an unqualified opinion, the franchisor's own disclosure highlights financial stability concerns for potential franchisees.
Financing Details
Swig Franchising, LLC does not offer any direct or indirect financing to its franchisees. Additionally, the company does not guarantee any notes, leases, or other financial obligations for franchisees.
Performance Metrics
Total US Locations
59
Franchised Units
2
Corporate Units
57
Avg Square Footage
1,300
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Swig Franchising, LLC states that no litigation is required to be disclosed under Item 3 of the FDD. However, the company is involved in a trademark dispute. Prime Ventures has filed cancellation actions against Swig Franchising, LLC's "SWIG" and "SWIG N' SWEETS" word marks with the Trademark Trial and Appeal Board. These actions were filed on February 16, 2024, and discovery is scheduled to begin on May 1, 2024. Swig Franchising, LLC is actively defending these proceedings and considering further actions against Prime Ventures. The company also has several trademark applications that have been suspended due to prior applications, and one has been abandoned. Swig Franchising, LLC has entered into mutual use agreements with two other companies using the "Swig" name (a service station and an online tumbler company) based on their prior use, so these are not considered active disputes.
Bankruptcy History
Swig Franchising, LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Swig™ franchise agreement, franchisees must be in good standing, meaning they are not in default and have consistently met the material terms and conditions throughout the initial term, including operational and quality standards. They must also have paid all financial obligations to Swig Franchising, LLC on time. Franchisees are required to give Swig Franchising, LLC written notice of their intent to renew between 6 and 12 months before the current agreement expires. As part of the renewal, they must pay a successor franchise fee, modernize their business to meet current brand standards, sign the then-current successor franchise agreement, and execute a general release of claims against Swig Franchising, LLC, all subject to applicable state law.
Training & Support Program
Franchisor Assistance
Swig Franchising, LLC provides extensive support to its franchisees both before and after opening. Prior to opening, Swig Franchising, LLC helps by designating a search area for the location and offers optional assistance with real estate selection, site planning, construction drawing reviews, and final lease reviews for a $35,000 fee. Swig Franchising, LLC must approve the chosen site. Franchisees receive general guidance on site standards, lists of approved suppliers, and preliminary design plans for their shop. Swig Franchising, LLC loans or provides electronic access to confidential operations manuals and sends two representatives for seven days of mandatory grand opening assistance, with Swig Franchising, LLC covering the travel, food, and lodging costs for their representatives, all for a $10,000 fee. Additionally, Swig Franchising, LLC manages a $10,000 grand opening social media ad campaign in the franchisee's territory. After opening, Swig Franchising, LLC provides ongoing support through updates to the operations manuals and offers remote or in-person assistance for a fee of $300 per day per person, plus travel expenses for attendees or representatives. Swig Franchising, LLC maintains a brand website that includes each franchisee's business information and phone number. Swig Franchising, LLC conducts periodic inspections of the business, which can be in person or via remote video. The franchisor may also hold conferences, which are mandatory for the franchisee's operating principal and incur registration fees ($250 to $1,000 per person) plus travel and living expenses. Additional seminars may also be offered. Swig Franchising, LLC replaces defective products purchased directly from them. They may require franchisees to remodel or refurbish their premises every five years (or sooner for trademark/health-related changes), and they continuously refine the products and services offered. Franchisees are provided with a dedicated email address and must comply with Swig Franchising, LLC's pricing suggestions or specifications.
Initial Training Hours
163
Training Location
Utah
Ongoing Support
After opening, Swig Franchising, LLC provides ongoing support by regularly updating its operations manuals, which may necessitate additional capital investment from franchisees. Swig Franchising, LLC also offers assistance either remotely or in-person; however, in-person support incurs a fee of $300 per day per person, plus associated travel, food, and lodging costs. Swig Franchising, LLC maintains a brand website that includes each franchisee's business information and phone number. The franchisor may conduct periodic inspections of the franchise business, which can be done in person or remotely via video. Swig Franchising, LLC may hold conferences, which are mandatory for the franchisee's operating principal and require payment of registration fees (currently $250 to $1,000 per person) plus all travel, lodging, and food expenses for each attendee. Optional additional seminars may also be offered.
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
Supervisory
Territory Type
Limited
Territory Size Requirements
Swig Franchising, LLC defines its franchise territories based on factors such as population density and the existing business base, typically within a 2-driving-mile radius from the approved location. The precise written boundaries for each franchisee's territory will be detailed in their individual franchise agreement.
Staffing Notes
Swig Franchising, LLC does not directly assist franchisees with employee-related decisions such as hiring, firing, scheduling, or compensation, emphasizing that franchisees are solely responsible for managing their own employees and ensuring compliance with all federal and state employment laws. While Swig Franchising, LLC may provide a sample employee guide, franchisees must adapt it to their specific needs and legal requirements. Each Swig™ business is required to have at least one trained shift lead present on-site during all regular business hours. The operating principal is expected to supervise managers and ensure adequate personnel are employed for maximum operational efficiency, as well as handle all accounting, reporting, financial components, and personnel decisions.