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D76/100FDD 2023

55 Fitness — Litigation & Risk

Health & Fitness · 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
76 / 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
West Virginia
State whose law governs disputes — relevant if you're not based there

What drove the 76/100 rating

Risk Score Breakdown

  1. 01MINOROnly 1 unit in system indicates either brand-new franchise or failed expansion — extreme concentration risk and inability to validate model
  2. 02HIGHGoing Concern status is False, suggesting franchisor financial instability or operational distress
  3. 03MINORNo Item 19 disclosure (Avg Revenue/Net Income) prevents ROI validation — cannot assess if $116k-$442k investment generates positive returns
  4. 04MINORWide investment range ($325k spread) with single unit makes cost projections unreliable and suggests unpredictable buildout expenses
  5. 05MED6% royalty on undisclosed revenue base is difficult to evaluate; could be unsustainable if margins are thin in fitness sector
  6. 06MINOR10-year term locks franchisee into relationship with unproven, single-location franchisor with no growth track record

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.