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D72/100FDD 2025

City2Shore — Litigation & Risk

Real Estate · 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
72 / 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
1 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
State of Operation
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MEDSystem is actively shrinking: 11 units with -12.5% YoY decline indicates contraction and potential viability concerns
  2. 02HIGHGoing Concern status is FALSE: Franchisor may face financial distress or operational sustainability issues
  3. 03MEDZero financial transparency: No disclosed average revenue or net income prevents ROI validation and creates opacity around actual earnings potential
  4. 04MINORHigh initial investment ($51,450–$151,550) relative to system size and declining unit count suggests poor unit economics
  5. 05MED6% royalty on gross commissions (not net) creates ongoing cost burden regardless of profitability
  6. 06MINORNo Item 19 earnings claims provided: Impossible to validate realistic income expectations for franchisees
  7. 07MINOROnly 11 franchised units is extremely small system with minimal scale; each unit departure materially impacts brand viability

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.