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D72/100FDD 2025

Afficient Academy — Litigation & Risk

Education - Tutoring & Test Prep · 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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Non-compete
1 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
California
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status indicates franchisor financial distress or viability questions
  2. 02MEDNo Item 19 (average revenue/earnings) disclosed — impossible to validate ROI on $46.6k-$141.5k investment
  3. 03MINORExtremely high 22% royalty on 'posted, recommended pricing' creates ambiguity and potential for disputes over what constitutes billable revenue
  4. 04MINORMinimal unit growth (12.5% YoY on only 10 units) suggests weak franchisee recruitment and system stagnation
  5. 05MINORUnprotected territory creates direct competition risk from other Afficient franchisees in same market
  6. 06MINORRoyalty structure tied to 'recommended pricing' rather than actual revenue is highly unusual and suggests franchisor controls pricing, limiting franchisee autonomy
  7. 07MINORVery low franchise fee ($1,000) relative to total investment may indicate franchisor desperate for cash flow rather than building sustainable 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.