B67/100FDD 2024
abc Seamless — Litigation & Risk
Home Services - Other · FDD Items 3, 4 & 5
Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
67 / 100
FranchiseVerdict composite
Rating
MODERATE
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
25
Government-backed loans issued
Default rate
18.2%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
4 loans
Loans charged off or defaulted
Total loan volume
$3.9M
Avg loan size
$157K
Participating lenders
18
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Nebraska
State whose law governs disputes — relevant if you're not based there
What drove the 67/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 4.2% YoY (72 units), indicating system contraction and potential market saturation or franchisee dissatisfaction
- 02MINORNo average revenue or net income disclosure in FDD Item 19, making ROI impossible to validate and suggesting weak unit economics
- 03HIGHRecent litigation initiated by franchisor (2024) against franchisee for breach of contract, indicating enforcement disputes and operational friction
- 04MINOREscalating minimum royalties ($1K-$4K annually) combined with 3% gross receipts creates dual fee burden that may pressure low-margin food businesses
- 05MINORDeclining unit base reduces franchisor's support infrastructure and collective bargaining power with vendors, increasing franchisee operational costs
- 06HIGHNo 'Going Concern' statement suggests financial stability questions about franchisor's long-term viability to support 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.