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B61/100FDD 2025

Best In Class Education Center — Litigation & Risk

Education - Tutoring & Test Prep · 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
61 / 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
1
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
$60K
Avg loan size
$60K
Participating lenders
1

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

What drove the 61/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 18.2% YoY (37 units) indicating system contraction and potential franchisee dissatisfaction
  2. 02MINORComplex tiered royalty structure (12% + 12% + 6%) could exceed 30% of revenue in blended scenarios, severely impacting profitability
  3. 03MEDNo Item 19 financial performance representation disclosed despite $65,963 average net income claim — unverified and potentially misleading
  4. 04MINORHigh initial investment ($84,375–$142,500) relative to average net income ($65,963) creates 1.3–2.2 year payback pressure
  5. 05MINOR5-year term is relatively short; renewal risk and system stability unclear with declining unit count
  6. 06MINOREducation franchise sector experiencing secular headwinds from digital learning and economic sensitivity

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.