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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
84 / 100
FranchiseVerdict composite
Rating
AVOID
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
111
Government-backed loans issued
Default rate
26.4%
vs <3% typical · system-wide
5-yr default rate
25.0%
Defaults
24 loans
Loans charged off or defaulted
Total loan volume
$10.7M
Avg loan size
$97K
Participating lenders
44
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
1.5 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
South Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 84/100 rating
Risk Score Breakdown
- 01MED27.6% unit decline YoY indicates rapidly shrinking franchise system and potential market saturation or operational failure
- 02MINORNo average revenue or net income disclosure (Item 19) prevents accurate ROI assessment and suggests franchisor may be hiding weak unit economics
- 03MINORHigh royalty floor of $600/month ($7,200 annually) creates significant fixed cost burden even for underperforming locations
- 04MINORInvestment range of $149K–$416K is broad and lacks transparency; unclear what drives cost variance
- 05MED200-unit system is relatively small; continued decline below 150 units would indicate critical mass loss
- 06HIGHNo disclosed going concern issues, but steep unit decline raises questions about franchisor financial stability
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.