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Moderate — Review
5 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
10
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.9M
Avg loan size
$190K
Participating lenders
8
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
Ohio
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01HIGHRegulatory litigation from Virginia and California involving undisclosed officer bankruptcies and auditor registration failures, suggesting governance and transparency issues at corporate level
- 02MINORNo average net income disclosure (Item 19) despite $284,485 average revenue — unable to validate profitability or actual franchisee earnings
- 03MINORHigh franchise fee ($53,900) combined with 6% royalty on gross receipts with no net income data creates earnings opacity and risk of negative ROI
- 04HIGHFive disclosed litigations including regulatory actions indicate potential compliance culture problems and ongoing legal exposure for franchisees
- 05MINORStrong unit growth (18.5% YoY to 372 units) may reflect recruitment-heavy expansion rather than unit profitability or system health
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.