Risk Score
Pending analysis
Investment Range
$82,950 - $404,850
Franchise Fee
$39,000
Total US Locations
9
Business Summary
Valhallan operates an esports tournament and training business, offering esports curriculum, training, software, tournaments, and education to communities. The business can operate as a Valhallan Arena, which is a fixed retail location, or as a Valhallan Studio, which can be set up in secondary use spaces, existing businesses, or co-branded environments.
Corporate History
Valhallan, LLC was formed on December 6, 2021, as a Texas limited liability company. It began offering Valhallan Arenas and Studios, which are esports tournament and training businesses, to franchisees on March 22, 2022. Valhallan operates one corporate-owned location in Pearland, Texas, which opened in March 2023. The company is primarily engaged in selling franchises and has not operated other lines of business. Valhallan is owned by Valhallan Holdings, LLC, which is further owned by FranchiCzar Holdings, LLC, and ultimately by Graham Ventures, Inc. Valhallan has several affiliates, including Valhallan Esports League, LLC, FranchiCzar, LLC, Fundio, LLC, and FranPerform LLC, which provide various services and support to the franchise system.
Financial Overview
Investment Range
$82,950 - $404,850
Franchise Fee (Low)
$39,000
Franchise Fee (High)
$39,000
Royalty %
7%
Equipment Costs (Low)
$23,250
Equipment Costs (High)
$214,450
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Going concern qualification
Financial Health Notes
Valhallan's auditors have raised substantial doubt about the company's ability to continue as a going concern. This is due to recurring losses from operations, negative cash flows from operations, and an accumulated deficit. For the year ended December 31, 2023, Valhallan incurred losses of $148,819 and negative cash flows from operations of $134,800, with an accumulated deficit of $344,741. Management has outlined plans to address these issues, but the financial statements do not include adjustments that might result from the outcome of this uncertainty. Prospective franchisees should note that the company's financial condition may impact its ability to provide services and support.
Financing Details
Valhallan does not offer any direct or indirect financing to franchisees. However, it has relationships with third-party lenders, Guidant Financial Group, Inc. and Benetrends, Inc., who may provide financing options. These options can include using retirement funds for business start-ups (ROBS), SBA loans, unsecured financing, equipment leasing, and portfolio loans. For Guidant, a personal guarantee is required, and Guidant charges various fees for its services, such as $4,995 for ROBS setup and $2,500 for SBA loan assistance. For Benetrends, a personal guarantee is also required, and their Rainmaker Program for retirement funds costs $4,995, with a $155 monthly administration fee. Benetrends also assists with SBA loans for a consulting fee of $2,500 to $6,950. Valhallan receives a $1,000 referral fee from both Guidant and Benetrends for each client who engages in their retirement rollover programs, but does not guarantee their services.
Performance Metrics
Total US Locations
9
Franchised Units
8
Corporate Units
1
Avg Square Footage
1,200
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Valhallan has no litigation history to report. There are no pending material litigation cases or adverse determinations by regulatory bodies involving Valhallan, its parent, or affiliates.
Bankruptcy History
Valhallan has no bankruptcy history to report for itself, its parent, affiliates, or any person named in Item 2 of the FDD.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Valhallan franchise, franchisees must provide written notice of their election to renew at least 6 months, but not more than 12 months, before the agreement ends. They must also have satisfied all monetary and other outstanding obligations to Valhallan and its affiliates, comply with all terms of their franchise agreement, sign a mutual general release of claims against Valhallan, and execute a new franchise agreement on Valhallan's then-current form (which may have different terms and higher fees). Additionally, franchisees must meet current qualification and training requirements, renovate their location to current brand standards, provide proof of continued premises possession, and satisfy Valhallan's financial responsibility standards at the time of renewal. A renewal fee of $2,000 is also required.
Training & Support Program
Franchisor Assistance
Valhallan provides comprehensive assistance to its franchisees, starting with pre-opening support including site approval (or denial for studios), initial training for up to three people (covering operations, systems, marketing), provision of standard specifications for Valhallan Arena construction and interior design elements, a confidential operations manual, assistance with a grand opening advertising program, and a list of approved suppliers. For Valhallan Arenas, this includes design services and assistance with architectural plans. Ongoing support includes periodic inspections of the location, evaluations of proposed suppliers, additional training programs as deemed appropriate, and continuous advisory assistance on marketing, management, and operations. Valhallan may also make additional training programs available.
Initial Training Hours
104
Training Location
Valhallan headquarters in Pearland, Texas
Ongoing Support
After opening, Valhallan provides continuous advisory assistance on marketing, management, and operations. This includes conducting periodic inspections of the franchise location, evaluating proposed suppliers, and making additional training programs available as needed. Franchisees must participate in annual conventions, for which Valhallan bills a registration fee for one attendee, though additional attendees may join for an extra fee. Valhallan also provides ongoing access to its electronic support systems, operating software, email, website management, and security/access control systems through a monthly Electronic Systems Fee. Franchisees are required to comply with Valhallan's standards for social media use and participate in customer surveys and satisfaction audits. Valhallan also offers ongoing access to an online operating system and payment processing services through its affiliates. Refresher courses and supplemental training may be required or offered, with per diem charges and reimbursement for expenses.
Franchise Requirements
Ideal Candidate Profile
Valhallan seeks franchisees who are individuals, or if an entity, have a Designated Principal with at least a 10% ownership interest in the franchisee entity. This Designated Principal must be reasonably acceptable to Valhallan and responsible for the general oversight and management of the franchise. Additionally, either the Designated Principal or a Valhallan-approved Manager must assume full-time responsibility for the daily supervision and operation of the franchise. All key personnel, including the franchisee (or Designated Principal) and Manager, must successfully complete Valhallan's initial training program. Franchisees and all staff must pass a background check free of sexual/violent offenses, moral turpitude, or other crimes likely to harm the brand. Franchisees must also meet Valhallan's financial responsibility standards and demonstrate sufficient financial resources to operate the business, as well as agree to personal guarantees, which extend to their spouses.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
Valhallan territories are defined based on various factors such as whether the approved location is in an urban or suburban area, the number of residents and primary/secondary school students in the area, and local demographics. For Valhallan Arenas, the territory typically ranges from a half-mile to a three-mile radius around the approved location. For Valhallan Studios, the territory generally ranges from a half-mile to a four-mile radius around the franchised location. In some cases, if a Valhallan Studio is located within an existing business that is a franchise of a different system, Valhallan may align the territory with that of the existing business.
Staffing Notes
Each Valhallan location requires a competent, conscientious staff. The Designated Principal (who must hold at least a 10% ownership interest if the franchisee is an entity) or a Manager is required to be involved in the general oversight and management, and a Designated Principal or a Manager must assume full-time responsibility for daily supervision and operation. Valhallan staff members must preserve good customer relations, render competent, prompt, courteous, and knowledgeable service, and comply with uniforms and/or a dress code prescribed by Valhallan. All Valhallan staff members, including the Manager, must pass a background check free of sexual, violent, or moral turpitude offenses, or any other crime likely to adversely affect the Valhallan System or marks. Valhallan Studios require space to comfortably seat a minimum of 2 staff members. Franchisees are solely responsible for employment decisions, including hiring, firing, wage and hour requirements, recordkeeping, supervision, and discipline, as well as compliance with all applicable federal, state, and local employment laws.