Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Louisiana
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01HIGHActive litigation alleging fraudulent inducement and breach of contract in North Carolina — suggests potential misrepresentation during franchise sales process
- 02MEDFinancial performance metrics (avg revenue and net income) completely undisclosed — prevents proper ROI analysis and suggests franchisor may not want scrutiny of actual franchisee earnings
- 03MEDNo protected territory — franchisees compete directly with other 1 Percent Lists agents in same geographic area, compressing commissions and creating cannibalization risk
- 04MEDRapid unit growth (23.7% YoY) without disclosed profitability metrics raises questions about whether growth is sustainable or driven by recruiting rather than franchisee success
- 05MED5% royalty on gross commissions is relatively high for real estate agent model where individual agent performance varies dramatically and franchisor provides limited support leverage
- 06HIGHGoing Concern status is 'False' — unclear if this means going concern exists (negative) or doesn't exist (positive), but lack of clarity itself is concerning
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.