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Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
6
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$4.9M
Avg loan size
$819K
Participating lenders
4
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
New York
State whose law governs disputes — relevant if you're not based there
What drove the 63/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 5.7% YoY (51 units total) indicates shrinking franchise system with potential viability concerns
- 02MINORNo Item 19 financial disclosure (average revenue/net income not provided) prevents accurate ROI assessment and suggests weak performance data
- 03HIGHHistory of material litigation: 2016 class-action settlement for $425,000 over misrepresentations regarding fruit bouquets program signals product/service delivery issues and franchisor credibility problems
- 04MINORNo protected territory creates direct competition risk among franchisees and enables brand cannibalization
- 05MINORHigh investment range ($258,500-$932,500) with declining unit count suggests poor unit economics and franchisee struggles to recoup capital
- 06MINOR6% royalty on 'Adjusted Gross Sales' (language suggests deductions) combined with no revenue disclosure creates transparency and earnings potential concerns
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.