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A49/100FDD 2025

Breakaway BA — Litigation & Risk

Business Services - Tax & Financial · 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
49 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 49/100 rating

Risk Score Breakdown

  1. 01MEDNo average revenue or net income disclosed — impossible to validate ROI on $10.5k-$34.5k investment
  2. 02MINORExtremely high royalty burden (20-25%) leaves minimal margin for profitability on small revenue base
  3. 03MINORZero franchise fee suggests potential cash flow issues or aggressive unit acquisition strategy masking unit quality
  4. 04MINOR39 units showing 100% YoY growth is unsustainable and indicates either new system or aggressive recruiting over retention
  5. 05MINORNo protected territory creates direct competition risk between franchisees within same market
  6. 06MINOR10-year term is unusually long without performance milestones or exit clauses
  7. 07HIGHGoing Concern status with no financial disclosure creates uncertainty about franchisor 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.