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B59/100FDD 2025

Commission Express — 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
59 / 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
Virginia
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 5.1% YoY (38 units) — shrinking franchise system indicates market saturation or franchisee dissatisfaction
  2. 02MEDNo average revenue or net income disclosed in FDD Item 19 — impossible to validate ROI or payback period on $107,800–$299,300 investment
  3. 03MINORDeclining tiered royalty structure (9% down to 1%) suggests franchisor relies on volume incentives rather than proven unit profitability
  4. 04HIGHGoing Concern flag = False but paired with unit contraction raises sustainability questions about franchisor financial health
  5. 05MINOR10-year term with $50,000 upfront fee locks franchisee into relationship with shrinking brand

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.