BAbove average56/100FDD 2026
Aqua-Tots Swim School: Litigation & Risk
Education · 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)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 56 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
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
- Arizona
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Washington Department of Financial Institutions issued a cease-and-desist order (Dec 2, 2025) finding the franchisor signed a franchise agreement with a Washington resident while not registered to offer/sell franchises in that state, violating RCW 19.100.020.
What drove the 56/100 verdict
Risk Score Breakdown
- 01MEDNo average unit volume (Item 19) disclosed—impossible to assess ROI or payback period on $1.6M–$2.9M investment
- 02MEDHigh initial investment ($1.6M–$2.9M) with 6% royalty on undisclosed revenue creates opaque financial picture
- 03MINOR11.0% YoY unit growth is modest for a swim school franchise in a growing category; slower than comparable brands
- 04MINORNo disclosure of average net income means franchisees cannot validate profitability claims or break-even timeline
- 05MEDModest unit count (132 locations) suggests limited scale and brand recognition vs. larger competitors
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.