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Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
61 / 100
FranchiseVerdict composite
Rating
MODERATE
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
55
Government-backed loans issued
Default rate
7.3%
vs <3% typical · system-wide
5-yr default rate
50.0%
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$10.8M
Avg loan size
$196K
Participating lenders
27
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
The laws of the state where your Store is located
State whose law governs disputes — relevant if you're not based there
What drove the 61/100 rating
Risk Score Breakdown
- 01HIGHTwo concluded arbitrations involving fraud and breach of contract claims with $1.05M in combined settlements raise credibility concerns about financial performance representations
- 02MEDNet Income not disclosed in Item 19 prevents validation of the $819,550 average revenue figure and makes ROI analysis impossible
- 03MINORUnknown unit growth trajectory over 10+ years of operation with only 113 units suggests stagnation or inconsistent expansion
- 04MED4% royalty on total net sales (not gross) is favorable, but paired with undisclosed profitability creates opacity around true franchisee earnings
- 05MEDHigh initial investment range ($308K-$431.5K) relative to disclosed revenue without corresponding net income data increases financial risk
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.