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F79/100FDD 2026

City Publications — Litigation & Risk

Business Services - Shipping & Postal · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
79 / 100
FranchiseVerdict composite
Rating
AVOID
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
28.6%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$2.1M
Avg loan size
$207K
Participating lenders
6

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

What drove the 79/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 12.5% YoY (35 units), indicating system contraction and potential franchisee dissatisfaction
  2. 02HIGHActive litigation (2025) alleging fraud, misrepresentation, and breach of contract suggests franchisor credibility and legal exposure issues
  3. 03MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents validation of 6% royalty sustainability and ROI claims
  4. 04MINORHigh franchise fee ($89,000) combined with declining unit economics creates elevated break-even risk
  5. 05HIGHNo 'Going Concern' statement indicates potential financial instability or undisclosed operational challenges at corporate level

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.