FranchiseVerdict
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B66/100FDD 2026

Acfn — Litigation & Risk

Retail · 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
66 / 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
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
Total loan volume
$71K
Avg loan size
$35K
Participating lenders
1

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
State in which the Area of Operation is located
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01MINORSystem shrinking rapidly: 210 units declining 9.9% year-over-year indicates deteriorating franchisee satisfaction and/or market demand
  2. 02MINORNo average revenue or net income disclosure: Absence of Item 19 financial performance data prevents ROI assessment and suggests franchisor may lack strong performer data
  3. 03HIGHGoing concern status is FALSE: Indicates the franchisor itself may have financial stability issues or internal operational challenges
  4. 04MINORUnprotected territory: Franchisees face direct competition from other franchisees in same area, increasing business risk and margin compression
  5. 05MINORLow royalty rate (1.25%) masks potential profitability concerns: May indicate franchisor cannot extract sustainable fees, suggesting unit economics are weak
  6. 06MINORModest franchise fee ($25,000) relative to total investment suggests low barriers to entry and potential oversaturation risk

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.