A49/100FDD 2024
BeBalanced — Litigation & Risk
Health & Wellness - Other · FDD Items 3, 4 & 5
Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
49 / 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
3
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
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
Pennsylvania
State whose law governs disputes — relevant if you're not based there
What drove the 49/100 rating
Risk Score Breakdown
- 01MINOROnly 25 units systemwide with unknown growth trajectory suggests stagnant or declining franchise system
- 02HIGHMulti-year litigation (2021-2024) involving fraud and breach of fiduciary duty allegations, even with settlement, raises governance and trust concerns
- 03MINORNo Item 19 financial performance representation provided — cannot verify if $367k avg revenue and $164k net income are typical or cherry-picked
- 04MINORSettlement resulted in plaintiff joining board/executive team, indicating potential past mismanagement or philosophical conflicts requiring structural remediation
- 05MINORHigh initial investment ($172-223k) relative to small unit count and unclear unit economics creates elevated risk if system doesn't grow
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.