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Elevated Risk
29 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
29
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
34 / 100
FranchiseVerdict composite
Rating
STRONG
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
2
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
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
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 34/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-0.2% YoY) signals system contraction despite massive franchise base
- 02MINORNo average net income disclosure prevents ROI validation; only $1.79M avg revenue provided without profitability context
- 03HIGHSignificant litigation history involving wrongful termination, breach of contract, fraudulent inducement, and FTC actions suggests systemic franchisor-franchisee relationship issues
- 04MINORUnprotected territory creates direct competition risk; franchisees may cannibalize each other's sales in overlapping areas
- 05MEDVariable royalty structure tied to Gross Profit (not Net) is opaque and difficult to forecast; actual percentage rates not disclosed
- 06MEDHigh initial investment ceiling ($1.6M+) combined with undisclosed profitability creates severe ROI uncertainty
- 07MINOR15-year term is lengthy with no clear exit strategy articulated, locking franchisees into declining system
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.