Elevated Risk
20 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
20
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
6
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.2M
Avg loan size
$527K
Participating lenders
4
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
Georgia
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01MEDStagnant unit growth (1.8% YoY) indicates mature/declining system with limited expansion support
- 02MEDNo disclosed average revenue or net income prevents ROI validation and suggests Item 19 absence in FDD
- 03HIGHExtensive litigation history including FTC consent orders, data security breaches, customer privacy violations, and ongoing securities class action creates legal/reputational risk
- 04MEDHigh initial investment ($307k-$838k) combined with 6% royalty and undisclosed profitability creates payback period uncertainty
- 05MINORMultiple FTC investigations and consent orders signal regulatory scrutiny over business practices (reciprocal purchase agreements, data security)
- 06MINORGoing-private transaction class action indicates shareholder disputes and potential corporate instability affecting franchisee support
- 07MINORCustomer privacy violations ('PC Rental Agent' software) and data security issues create operational liability risk for franchisees
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.