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)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 56 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 14
- Government-backed loans issued
- Charge-off rate
- 18.2%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 2 loans
- Loans charged off or defaulted
- Total loan volume
- $6.5M
- Avg loan size
- $466K
- Participating lenders
- 10
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
- New York
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
No litigation is required to be disclosed in this Item.
What drove the 56/100 verdict
Risk Score Breakdown
- 01MINORUnit count declining 6.0% YoY (118 units) indicates system contraction and potential franchisee dissatisfaction
- 02MEDNet income not disclosed in Item 19 — cannot assess actual profitability or ROI despite $792k avg revenue
- 03MINORHigh initial investment ($330k-$527k) combined with declining unit growth raises recapture risk
- 04MINORRoyalty structure front-loads incentive (2.5% for 180 days) then jumps to 5% — suggests franchisor prioritizes short-term ramp-up over franchisee sustainability
- 05HIGHNo litigation disclosed is positive, but absence of financial performance data is critical gap in due diligence
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.