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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
45 / 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
67
Government-backed loans issued
Default rate
13.2%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
7 loans
Loans charged off or defaulted
Total loan volume
$7.8M
Avg loan size
$117K
Participating lenders
28
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
Louisiana
State whose law governs disputes — relevant if you're not based there
What drove the 45/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is False — suggests potential financial instability at corporate level despite positive unit economics
- 02MINORModest unit growth of 10.7% YoY is slower than healthy franchise systems (typically 15%+ for expanding brands)
- 03MINORHigh initial investment range ($219K-$475K) against average net income of $139,707 yields 1.6-3.4 year payback period with execution risk
- 04MINOR5% royalty on $513K average revenue = $25,650 annual corporate fees reduces franchisee margin meaningfully
- 05MINORNo Item 19 financial performance representations limits ability to validate claimed average revenue/income figures independently
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.