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A46/100FDD 2025

Burn Boot Camp — Litigation & Risk

Health & Fitness · 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
46 / 100
FranchiseVerdict composite
Rating
STRONG
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
142
Government-backed loans issued
Default rate
2.2%
vs <3% typical · system-wide
5-yr default rate
2.9%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$43.1M
Avg loan size
$303K
Participating lenders
47

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

What drove the 46/100 rating

Risk Score Breakdown

  1. 01HIGH2016 litigation for unregistered franchise sales in Virginia shows regulatory compliance issues and raises questions about disclosure practices across other states
  2. 02MINORModest unit growth of 6.3% YoY is sluggish for fitness/wellness sector; suggests market saturation or brand maturation challenges
  3. 03MINORNo Item 19 (Financial Performance Representations) in FDD limits ability to validate the stated $114,287 average net income figure
  4. 04MINORHigh initial investment ($281K-$645K) against $114K average net income yields 2.5-5.6 year payback period with thin margins
  5. 05MINOR6% royalty on gross revenues (not net) creates cash flow pressure during slow months; combined with overhead-heavy fitness model, profitability is vulnerable

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.