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D73/100FDD 2026

1st Class Real Estate — Litigation & Risk

Real Estate · FDD Items 3, 4 & 5

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
73 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 73/100 rating

Risk Score Breakdown

  1. 01MEDSevere unit decline of 21.7% YoY (23 units) suggests system contraction and franchisee struggles
  2. 02MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and hides performance reality
  3. 03MINORUnprotected territory creates direct competition risk between franchisees and cannibalization concerns
  4. 04MINORHigh royalty variability (10-50% of ongoing fees) with unclear fee structure creates unpredictable cost burden
  5. 05HIGHGoing Concern status = FALSE indicates franchisor may lack financial stability or viability assurances
  6. 06MINORWide investment range ($23.5K-$63.5K) suggests inconsistent startup costs and unclear value proposition
  7. 07MINOR10-year term locks franchisee into declining system with no exit flexibility

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.