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A47/100FDD 2025

Bath Tune-Up — Litigation & Risk

Food & Beverage - Quick Service · FDD Items 3, 4 & 5

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Moderate — Review

4 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
47 / 100
FranchiseVerdict composite
Rating
STRONG
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
11
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
$2.0M
Avg loan size
$180K
Participating lenders
5

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
South Dakota
State whose law governs disputes — relevant if you're not based there

What drove the 47/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 (Average Net Income) disclosure — impossible to validate $109,930-$173,850 investment ROI claims
  2. 02MINORStagnant unit count at 48 with unknown growth trajectory suggests market saturation or retention issues
  3. 03HIGHMultiple litigation disclosures including franchisor breach of contract actions against franchisees, indicating collection or compliance disputes
  4. 04MINOR2006 regulatory consent order with affiliate (Aussie Pet Mobile) on franchise law compliance raises governance concerns
  5. 05HIGHBankruptcy adversary proceeding by franchisee guarantor indicates financial distress among franchisees
  6. 06MINORHigh royalty floor ($750-$1,500/month = $9,000-$18,000 annually) creates breakeven pressure on $303,701 average 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.