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B64/100FDD 2025
Angus Valley Montessori — Litigation & Risk
Education - Children's Programs · FDD Items 3, 4 & 5
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
64 / 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
12
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
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
Illinois
State whose law governs disputes — relevant if you're not based there
What drove the 64/100 rating
Risk Score Breakdown
- 01MINORZero existing franchised units with unknown growth trajectory indicates unproven franchise model and potential startup franchisor
- 02MEDNo average revenue or net income disclosure (missing Item 19) prevents realistic ROI assessment for $1.89M-$3.03M investment
- 03HIGHGoing Concern status is FALSE, suggesting potential financial instability or structural issues with the franchisor
- 04MEDHigh initial investment ($1.89M-$3.03M) combined with 7-9% royalty rates creates significant break-even pressure without disclosed unit economics
- 05MINOREscalating royalty structure (7% → 8-9% after 5 years) increases long-term cost burden during critical profitability phase
- 06MINORFranchise fee ($80K) is modest relative to total investment, but signals potential under-capitalization of franchisor support infrastructure
- 07MINOR10-year term is restrictive; inability to verify franchisee success stories or performance data creates validation 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.