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A54/100FDD 2026

Blue Nose — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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
54 / 100
FranchiseVerdict composite
Rating
STRONG
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
Colorado
State whose law governs disputes — relevant if you're not based there

What drove the 54/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 financial disclosure (average revenue and net income not disclosed) — impossible to validate ROI claims
  2. 02HIGHActive litigation against franchisee for non-payment of fees suggests collection and/or profitability issues within the system
  3. 03MINOR50-unit system is relatively small; 25.6% YoY growth is healthy but base is thin, limiting data reliability and support infrastructure
  4. 04MINORWide investment range ($15,590–$56,250) with no clarification on what drives cost variance raises transparency concerns
  5. 05MINOR4% royalty appears low, potentially indicating franchisor underfunding support, training, and marketing 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.