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A36/100FDD 2025

Crunch — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
36 / 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
10
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$21.2M
Avg loan size
$2.1M
Participating lenders
8

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
1 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 36/100 rating

Risk Score Breakdown

  1. 01HIGHRecent 2024 litigation settlement ($475,000) involving financial performance misrepresentation by area developer raises accuracy concerns about unit economics claims
  2. 02MINORWide investment range ($804K–$6.7M) suggests inconsistent unit profitability and unclear ROI predictability across locations
  3. 03MINOR15.6% YoY unit growth, while positive, is modest for fitness sector and may indicate market saturation or franchisee acquisition challenges
  4. 04HIGHTwo disclosed litigation actions (2017 and 2024) suggest pattern of franchisor-franchisee disputes over territory and financial performance
  5. 05MEDNo Item 19 (Financial Performance Representations) disclosed limits ability to validate $929,856 average net income claim 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.