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A48/100FDD 2025

CMIT Solutions — Litigation & Risk

Business Services - Other · 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
48 / 100
FranchiseVerdict composite
Rating
STRONG
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
52
Government-backed loans issued
Default rate
11.1%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$7.7M
Avg loan size
$147K
Participating lenders
25

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

What drove the 48/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot independently verify the stated $487,310 average revenue or validate profitability claims
  2. 02MEDAverage net income not disclosed — unable to assess actual franchisee profitability after royalties (6%), operating expenses, and debt service on $106K-$159K investment
  3. 03MINORSlow unit growth of 6.7% YoY with 278 units — suggests market saturation, competitive pressure, or franchisee satisfaction issues in a mature 10-year-old system
  4. 04MINORHigh initial investment ($106K-$159K) combined with 6% royalty creates break-even risk if revenue underperforms or customer acquisition costs rise
  5. 05MED10-year franchise term is longer than industry average (5-7 years) — locks franchisees into relationship with limited exit flexibility

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.