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B63/100FDD 2025
Club Z! In-Home Tutoring — Litigation & Risk
Education - Tutoring & Test Prep · FDD Items 3, 4 & 5
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
63 / 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
6
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$552K
Avg loan size
$92K
Participating lenders
4
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
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 63/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 5.5% YoY (328 units) signals system contraction and potential market saturation or franchisee struggles
- 02MINORNo average revenue or net income disclosure (Item 19) prevents ROI validation and suggests franchisor may lack compelling financial data
- 03MINORRoyalty floor of $550/month minimum creates fixed cost burden even during low-revenue months, pressuring marginal operators
- 04MINORHigh startup cost range ($40,975-$57,425) with zero franchise fee indicates franchisor prioritizes equipment/training fees over transparency
- 05MINORIn-home tutoring is labor-intensive with high customer acquisition costs and volatile student retention; no performance benchmarks provided
- 06MINOR7-year term with protected territory provides minimal flexibility if market conditions or franchisee circumstances change within contract
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.