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A53/100FDD 2026

Allegra — Litigation & Risk

Business Services - Printing & Signs · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
53 / 100
FranchiseVerdict composite
Rating
STRONG
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
30
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
$13.4M
Avg loan size
$448K
Participating lenders
23

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
Michigan
State whose law governs disputes — relevant if you're not based there

What drove the 53/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 5.1% YoY (167 units) signals system contraction and potential market saturation or performance issues
  2. 02MINORNo Item 19 financial performance representation limits transparency; average net income of $250,967 cannot be independently verified or benchmarked
  3. 03HIGHMultiple litigation cases including breach of contract, non-payment arbitration, and state consent order indicate franchisor-franchisee relationship strain and regulatory scrutiny
  4. 04MINORTiered royalty structure (6% → 4% → 1.5%) suggests franchisor heavily depends on volume; lower-performing units may struggle with 6% royalty rate on $1.08M average revenue
  5. 05MINORHigh investment range ceiling ($698,040) with 20-year term creates extended capital commitment in declining system
  6. 06MINORConsent order with Washington State regarding technology fees raises questions about franchisor practices and transparency

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.