AStrongest tier84/100FDD 2026
Bach to Rock: Litigation & Risk
Education · 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)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 84 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 18
- Government-backed loans issued
- Charge-off rate
- 0.0%
- vs 16% franchise average
- 5-yr charge-off rate
- 0.0%
- Defaults
- 0 loans
- Loans charged off or defaulted
- Total loan volume
- $6.2M
- Avg loan size
- $343K
- Participating lenders
- 4
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
- Maryland
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
No litigation is required to be disclosed in Item 3
What drove the 84/100 verdict
Risk Score Breakdown
- 01MEDNo Item 19 (Average Unit Volume) disclosed despite $579K average revenue claim — prevents accurate ROI validation
- 02MEDNet income not disclosed — unable to assess profitability or payback period on $254K-$544K investment
- 03MINORSlow unit growth of 6.7% YoY with only 59 locations suggests mature/saturated market or recruitment challenges
- 04MEDHigh initial investment ($254K-$544K) relative to disclosed revenue ($579K) creates thin margin for error
- 05MINORMusic education franchises face high operating costs (instructor salaries, instrument inventory, facility rent) with seasonal demand volatility
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.