D70/100FDD 2026
Cheer Athletics — Litigation & Risk
Health & Fitness · FDD Items 3, 4 & 5
Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 70/100 rating
Risk Score Breakdown
- 01HIGHActive sexual abuse and negligence litigation across multiple affiliates with vicarious liability claims indicates systemic supervision/hiring vulnerabilities in a youth-serving business
- 02MINORSlow unit growth (5.6% YoY on only 20 locations) suggests market saturation, franchisee struggles, or brand weakness despite 10-year terms
- 03MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation; combined with $607k-$1.2M investment, profitability is opaque
- 04MED10% royalty on undisclosed revenues creates unpredictable cost structure; franchisees cannot benchmark performance against system average
- 05HIGHAffiliate bankruptcy and stayed litigation indicate financial fragility within the franchise system itself
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.