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B55/100FDD 2025

C12 Group — Litigation & Risk

Business Services - 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
55 / 100
FranchiseVerdict composite
Rating
MODERATE
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
No
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 55/100 rating

Risk Score Breakdown

  1. 01MINORHigh royalty rate (17-30% of gross billings) significantly erodes profitability and creates breakeven risk
  2. 02MEDNet income not disclosed in FDD Item 19 — inability to validate profit claims or ROI timeline
  3. 03HIGHSEC/Maryland litigation (2012) for unregistered franchise sales and escrow violations indicates regulatory compliance history
  4. 04MINORMinimal system growth (3.1% YoY) suggests market saturation, franchisee recruitment challenges, or brand weakness
  5. 05MINORShort 1.5-year term creates renewal uncertainty and limits franchisee investment recovery window
  6. 06MEDOnly 67 units system-wide indicates limited scale, fewer peer networks, and higher operational overhead per franchisee

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.