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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
Virginia
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MINOROnly 4 franchised units with unknown growth trajectory suggests minimal system traction and scalability concerns
- 02MEDNo Item 19 (Financial Performance Representations) disclosed — cannot verify if average revenue/net income figures are typical or outliers
- 03HIGHGoing Concern status is False, indicating potential financial instability at franchisor level that could affect support and survival
- 04MINORWide investment range ($450K-$1.56M) with vague cost breakdown suggests high variability and unclear unit economics
- 05MINOR7.5% royalty on adjusted gross sales creates revenue recognition disputes and unclear payment calculation methodology
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.