Elevated Risk
17 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
17
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
65 / 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
$2.5M
Avg loan size
$415K
Participating lenders
6
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-0.9% YoY) suggests market saturation or franchisee dissatisfaction in a mature 1,900-unit system
- 02MEDNo average revenue or net income disclosure (missing Item 19) prevents assessment of actual franchisee profitability and ROI
- 03HIGHMultiple active litigation categories including antitrust commission structure claims and TCPA class actions indicate systemic operational/legal risks
- 04MINORUnprotected territory creates direct competition risk between franchisees and potential margin compression
- 05MEDHigh investment ceiling ($521,775) combined with undisclosed returns creates asymmetric risk/reward profile
- 06MINORDeclining royalty structure incentivizes growth but may signal prior franchisee profitability concerns at standard 5.5% rate
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.