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B65/100FDD 2024

ChopValue — Litigation & Risk

Business Services - Printing & Signs · FDD Items 3, 4 & 5

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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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORSystem contracted 16.7% YoY (10 units down from 12) — indicates shrinking franchise network and potential market saturation or unit failure
  2. 02MEDNo average revenue or net income disclosed in FDD — unable to validate ROI or profitability claims; prospective franchisees cannot assess break-even timeline
  3. 03MINORNo protected territory — franchisees face direct competition from other ChopValue franchisees and potential company-owned locations in same market
  4. 04MEDHigh initial investment ($462K-$587K) with unclear return metrics — royalty rate of 6% suggests thin margins if average unit volumes aren't disclosed
  5. 05MINOROnly 10 units remaining limits peer network and support ecosystem; difficulty finding experienced franchisees for honest feedback

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.