Risk Score
Pending analysis
Investment Range
$82,650 - $392,000
Franchise Fee
$23,000
Min Cash Required
$5,000
Total US Locations
43
Business Summary
XP League operates a business that provides Esports league coaching, competitions, coach-led athletics, resources, camps, and special events. These services are modeled after traditional youth sports leagues and utilize the Esports ecosystem, targeting elementary and middle school-aged children. XP League offers different operational formats, including mobile divisions, dedicated centers, or affiliated divisions located within other youth-focused franchise premises.
Corporate History
XP League Franchise, LLC was formed as a Delaware limited liability company on March 23, 2022. It is the successor to XP League, LLC, which was a Texas limited liability company formed on June 30, 2020, and began offering XP League franchises in September 2020. In April 2022, Unleashed Brands, LLC, the direct parent company, formed XP League Franchise, LLC to acquire the assets of the original XP League, LLC. The new entity, XP League Franchise, LLC, started offering franchises on July 15, 2022. By December 2022, the original XP League, LLC assigned its remaining franchise agreements to XP League Franchise, LLC, making the new entity the sole franchisor for all XP League locations. XP League Franchise, LLC also organizes the annual North American Finals esports tournament.
Financial Overview
Investment Range
$82,650 - $392,000
Franchise Fee (Low)
$23,000
Franchise Fee (High)
$35,000
Minimum Cash Required
$5,000
Royalty %
8%
Marketing %
6%
Equipment Costs (Low)
$29,400
Equipment Costs (High)
$70,000
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Unleashed Brands, LLC, the parent company of XP League Franchise, LLC, appears financially healthy. Its audited consolidated financial statements for the year ended December 31, 2023, show a net income of $36,110 (in thousands) and positive working capital of over $10 million (current assets of $64,679,000 against current liabilities of $54,476,000). The independent auditor issued an unqualified opinion, indicating the financial statements present fairly the company's financial position. The auditors did not identify any conditions or events that raise substantial doubt about Unleashed Brands, LLC's ability to continue as a going concern. Unaudited financial statements for the first quarter of 2024 also show positive net income and equity, supporting a stable financial position for the parent company.
Financing Details
XP League Franchise, LLC does not offer any direct or indirect financing options to its franchisees. The franchisor also explicitly states that it does not guarantee any franchisee's notes, leases, or other financial obligations.
Performance Metrics
Total US Locations
43
Franchised Units
41
Corporate Units
2
Avg Square Footage
1,000
Franchising Since
2020
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
4
Litigation Summary
XP League Franchise, LLC and its affiliates have disclosed four litigation cases. One case involving Snapology, an affiliate, concerned violations of Maryland's franchise registration and disclosure laws, resulting in a consent order in 2016. Another case involved UATP Management, LLC, an affiliate, being sued by a distributor for breach of contract, which was settled confidentially in 2018 with a $5 million payment. More recently, in November 2021, Premier Franchising Group, LLC, another affiliate, entered into a consent order with California regulators for offering and selling franchises without proper registration and omitting material facts, leading to a $10,000 penalty and required registration updates. Additionally, a lawsuit was filed in September 2023 against Unleashed Services, LLC (parent company of XP League Franchise, LLC) by a former executive alleging breach of an employment agreement and fraud, which is currently pending.
Bankruptcy History
XP League Franchise, LLC has no bankruptcy history to report for itself, its parent company, its predecessors, or its affiliates. Item 4 of the FDD states that no bankruptcy is required to be disclosed for XP League Franchise, LLC or related entities.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their XP League franchise, franchisees must notify the franchisor in writing 6 to 12 months before the current term expires. They must be in good standing, meaning they have no outstanding monetary or other defaults with XP League Franchise, LLC or its affiliates, or any suppliers or lessors. Franchisees operating a Center or Affiliated Division must renovate and modernize their premises to match current brand standards. All franchisees and their employees must comply with current training requirements. They must also have a legal right to occupy their business premises or have secured a new approved location. All guarantors must sign a general release of claims. Franchisees must also demonstrate their financial ability to operate the business for the renewal term and must not have a pattern of failed quality assurance evaluations. Finally, they will need to sign the then-current franchise agreement, which may have different royalty and advertising obligations.
Training & Support Program
Franchisor Assistance
XP League Franchise, LLC provides various forms of assistance to its franchisees. Before opening, XP League helps with granting the right to operate within a protected area and offers site selection guidelines. They provide initial training for up to two individuals, including the Designated Manager, at no additional charge, covering various aspects of operations. Franchisees also receive access to the confidential Operations Manual, a list of designated suppliers, marketing standards, and a section on the XP League website for their business. For the first Center or Affiliated Division, on-site opening assistance may be provided for one to two days upon request. On an ongoing basis, XP League offers periodic advice and consultation on business operations. They coordinate an annual conference for franchisees and provide training for additional or replacement managers, along with refresher training as needed. Franchisees receive updates and revisions to the Operations Manual and communications regarding system improvements and modifications to operating procedures, products, and services. XP League also makes good faith efforts to approve proposed promotional materials within 10 business days. They establish and administer membership, gift card, loyalty, and master insurance programs. XP League also provides computer system requirements, including point-of-sale systems, hardware, and proprietary software, and maintains the right to remotely access franchisee data. They manage advertising initiatives, including a mandatory Grand Opening Advertising program, and may implement a National Advertising Fund (currently 0% of gross sales, but can increase) and local marketing expenditures (6% of gross sales or $500/month, which the franchisor may collect and spend). An Advertising Cooperative may also be formed for regional marketing. Additionally, XP League requires all coaches to obtain an XP League Coaching Certification for a fee of $110 per coach.
Initial Training Hours
34
Training Location
Online, Bedford, Texas, or at our designated locations
Ongoing Support
After opening, XP League Franchise, LLC provides continuous support to its franchisees through various channels. The franchisor offers periodic advice and consultation on business operations as deemed appropriate. It coordinates an annual conference for franchisees and provides training for additional or replacement managers, as well as refresher training courses. Franchisees receive access to updates and revised plans for the Operations Manual and are kept informed about new operating procedures, system improvements, and modifications. XP League also provides ongoing support by reviewing and approving promotional and marketing materials within 10 business days. Furthermore, the franchisor establishes and administers membership programs, gift card programs, loyalty programs, and a master insurance program for its franchisees.
Franchise Requirements
Ideal Candidate Profile
XP League Franchise, LLC seeks franchisees who meet specific educational, managerial, and business standards. Ideal candidates should possess a good moral character, a strong business reputation, a solid credit rating, and demonstrate the aptitude and ability to successfully operate the XP League business. Franchisees must have sufficient equity capital. The franchisor highly recommends that the Designated Manager (who must be full-time and dedicate their best efforts to supervising the business daily) also holds an equity interest in the franchisee entity, though this is not strictly required. XP League also targets existing franchisees of its Affiliated Brands or individuals approved to enter an Affiliated Brand's franchise system, indicating a preference for candidates with existing business or franchise experience.
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
XP League Franchise, LLC defines its protected areas for franchisees on a case-by-case basis, generally containing a minimum of 8,000 children between the ages of five and 15. The exact size and scope of each protected area are determined during the site application process, considering factors such as whether the approved location is in an urban or suburban area, the overall number of residents, and the specific count of elementary and middle school-aged children. Mobile Divisions operate services within their protected area from approved third-party sites while maintaining administrative functions from a home office if permitted. XP League Centers and Affiliated Divisions operate from an approved fixed location within their protected area but may also offer services at third-party sites within that same protected area.
Staffing Notes
XP League Franchise, LLC requires franchisees to employ a sufficient number of qualified and competent personnel to meet the demand for services. Franchisees are solely responsible for hiring, promoting, compensating, disciplining, and discharging their employees, as well as managing work schedules and conditions. The franchisor explicitly states it does not dictate or control labor or employment matters for franchisees. However, franchisees must ensure their staff complies with brand standards, including those for customer service and engagement, and wears required uniforms. Each coach must obtain an XP League Coaching Certification through a mandatory proprietary program. The business must be supervised at all times by a Designated Manager, who may be an owner or a general manager, and must devote full-time, in-person attention to daily supervision and operations. This Designated Manager, along with other key management personnel, must successfully complete the initial training program and any other training XP League requires.