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B63/100FDD 2025

Barmetrix — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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
63 / 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
2
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
Total loan volume
$135K
Avg loan size
$68K
Participating lenders
2

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
District of Columbia
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 disclosure (average revenue and net income not provided) — impossible to assess actual profitability or ROI on $60,950-$65,600 investment
  2. 02MINORUnprotected territory creates direct competition risk; franchisees may cannibalize each other's revenue in growth markets
  3. 03MEDModest unit growth (11.8% YoY on only 22 units) suggests limited brand traction and difficulty recruiting/retaining franchisees
  4. 04MINORTiered royalty structure (8%/7%/6%) incentivizes owners to stay below $83,333 revenue to avoid 6% rate, creating misaligned growth incentives
  5. 05MINOR5-year term is relatively short; franchisees may hesitate to invest heavily knowing renewal is uncertain
  6. 06HIGHGoing Concern status is False but unclear — lack of financial transparency raises questions about franchisor stability and support capabilities

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.