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B73/100FDD 2022

Commercial Investors Group — Litigation & Risk

Real Estate · 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
73 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 73/100 rating

Risk Score Breakdown

  1. 01MEDOnly 3 units in system with unknown growth trajectory indicates extremely limited track record and scale
  2. 02HIGHGoing Concern status is FALSE — suggests franchisor may be unprofitable or financially unstable despite high franchisee revenues
  3. 03MINORComplex multi-tiered royalty structure (1% transaction + 15% assignment + 1% gross revenue) creates opaque fee obligations and potential for disputes
  4. 04MINORNo franchise fee ($0) may indicate franchisor relies heavily on transaction-based royalties, creating misaligned incentives
  5. 05MINORMassive gap between claimed franchisee net income ($3.76M) and franchisor viability raises questions about business model sustainability and data verification
  6. 06MINORProtected territory with only 3 units suggests either early-stage concept or failed expansion strategy

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.