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D75/100FDD 2024

Boxhaus® — Litigation & Risk

Health & Fitness · 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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MINOROnly 1 existing unit with unknown/no growth trajectory indicates minimal system validation and high execution risk
  2. 02HIGHGoing Concern = False suggests franchisor may have financial viability issues or undisclosed operational problems
  3. 03MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and suggests weak unit economics or poor performer
  4. 04MINORHigh investment range ($258,850–$581,300) with 7% royalty on unknown revenues creates uncertainty on actual profitability
  5. 05MINORSingle franchisee severely limits due diligence; cannot validate business model across multiple markets/operators
  6. 06MED10-year term locks franchisee into unproven concept with limited exit flexibility

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.