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Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
58 / 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
28
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
$5.9M
Avg loan size
$211K
Participating lenders
14
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
Georgia
State whose law governs disputes — relevant if you're not based there
What drove the 58/100 rating
Risk Score Breakdown
- 01MEDSystem contraction: 10.1% unit decline YoY (128 units) signals franchisee failure or underperformance
- 02MINORNo Item 19 financial disclosure despite $154,694 average revenue claim — cannot independently verify profitability
- 03HIGHActive litigation on disclosure inadequacy and non-compete enforcement suggests franchisor-franchisee relationship deterioration
- 04MINORUnprotected territory creates direct competition risk; franchisees may cannibalize each other's revenue
- 05MINORLow average revenue ($154,694) against $165,700+ investment requires 2+ years to break even at 7% royalty burden
- 06HIGHGoing concern status FALSE is ambiguous — clarify if franchisor or franchisees at risk
- 07MINORHigh initial investment ($310,420 at top end) with no transparent path to stated $154,694 revenue
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.