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D72/100FDD 2026

Blue Moon Estate Sales — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Elevated Risk

12 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
12
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
10
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
33.3%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.1M
Avg loan size
$112K
Participating lenders
3

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

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Net Income) disclosed — impossible to validate ROI claims or profitability; combined with $89.5K-$113.3K investment, actual earnings remain opaque
  2. 02HIGHActive litigation involving breach of contract, non-compete violations, and misappropriation of trade secrets suggests systemic franchisor-franchisee disputes and potential operational constraints
  3. 03HIGHGoing Concern = False indicates potential financial instability or viability concerns at corporate level, raising questions about long-term support and system sustainability
  4. 04MEDHigh initial investment ($57K franchise fee + $89.5K-$113.3K total) relative to undisclosed net income creates unfavorable risk-reward profile
  5. 05MINOROnly 10.6% YoY unit growth is modest for an established 136-unit system, suggesting market saturation, franchisee struggles, or recruitment challenges

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.