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B65/100FDD 2024

Comfort Dental — Litigation & Risk

Health & Wellness - Other · FDD Items 3, 4 & 5

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Elevated Risk

11 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
11
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
$450K
Avg loan size
$75K
Participating lenders
1

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
3 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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Colorado
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01HIGH11 active litigation cases including corporate practice of dentistry violations and unauthorized Medicaid billing — suggests systemic compliance issues
  2. 02HIGHGoing concern disclosure indicates material uncertainty about franchisor's ability to continue operations
  3. 03MINORHigh fixed royalty ($12,000/month = $144,000/year) with annual increases creates inflexible cost structure; no revenue disclosure makes ROI validation impossible
  4. 04MINORTerritory not protected — direct franchisor competition and multi-unit franchisee cannibalization risk
  5. 05MINOR145 units with unknown growth trajectory — no disclosure of unit count trend (declining, flat, or growing) is a major red flag
  6. 06MINORNet income claim ($420,092) lacks supporting Item 19 financial performance representation; unverified and potentially based on cherry-picked locations
  7. 07HIGHLitigation includes disputes with master franchisors — suggests franchisor relationship instability and possible territorial/operational conflicts

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.