A41/100FDD 2024
Celebree School — Litigation & Risk
Education - Children's Programs · FDD Items 3, 4 & 5
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
41 / 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
40
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$75.3M
Avg loan size
$1.9M
Participating lenders
12
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 41/100 rating
Risk Score Breakdown
- 01MINORExplosive 53.8% YoY unit growth suggests rapid expansion that may outpace operational support infrastructure and quality control
- 02MEDWide investment range ($838k-$3.0M) with 258% spread indicates high variability in startup costs and potential hidden expenses not disclosed
- 03MINORNet income margin of 15.4% is modest for a childcare/education franchise requiring significant labor and facility costs
- 04MINORNo Item 19 financial performance representations (going_concern: False) limits ability to validate franchisor claims about profitability
- 05MEDRelatively small franchisee base (46 units) offers limited peer network for troubleshooting and reduces bargaining power with franchisor
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.