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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
55 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — indicates potential franchisor financial distress or viability questions
- 02MEDOnly 3 units in system with unknown growth trajectory — extremely limited track record and scaling concerns
- 03MEDNet Income not disclosed in FDD Item 19 — cannot validate actual profitability claims against $1.25M average revenue
- 04MINORHigh initial investment range ($269K-$384K) relative to only 3 operating units suggests insufficient proof of concept
- 05MINOR6% royalty on gross sales (not net) creates fixed cost burden regardless of profitability
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.