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B59/100FDD 2025

Belocal — Litigation & Risk

Business Services - Other · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MINORStagnant unit growth (1.5% YoY) suggests market saturation or franchisee dissatisfaction
  2. 02MINORNo financial disclosure (Item 19) prevents assessment of actual franchisee profitability and ROI
  3. 03MINORTwo regulatory compliance violations in California and Washington indicate disclosure/registration failures to prospective franchisees
  4. 04MINORUnprotected territory creates direct competition risk from other franchisees in same market
  5. 05MINORHigh royalty rate (15% of advertising value) is contingent on subjective valuation and creates revenue uncertainty
  6. 06MINORVery low franchise fee ($735) may indicate weak brand support or insufficient franchisor resources

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.