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B56/100FDD 2025

BoxDrop — Litigation & Risk

Retail · 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
56 / 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
2
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
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
Ohio
State whose law governs disputes — relevant if you're not based there

What drove the 56/100 rating

Risk Score Breakdown

  1. 01MINORNo financial disclosure (avg revenue/net income not available) — inability to assess unit profitability or ROI
  2. 02MINORSlow unit growth (5.8% YoY) suggests market saturation or franchisee satisfaction concerns
  3. 03HIGHActive litigation involving parent company (Retail Service Systems, Inc.) in discovery phase — legal fees exposure unclear
  4. 04MEDNo royalty model disclosed — unusual structure raises questions about franchisor incentive alignment and ongoing support funding
  5. 05MINORFranchise fee ($15,000) appears low relative to investment range ($67k-$202k) — suggests significant CapEx with unclear franchisor ROI commitment
  6. 06HIGHGoing Concern = False (unclear if this means 'not applicable' or negative assessment) — requires clarification on financial stability

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.