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F85/100FDD 2022

Curves — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

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Elevated Risk

7 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
7
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
85 / 100
FranchiseVerdict composite
Rating
AVOID
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
425
Government-backed loans issued
Default rate
18.8%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
80 loans
Loans charged off or defaulted
Total loan volume
$40.9M
Avg loan size
$96K
Participating lenders
189

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
Not waived
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 85/100 rating

Risk Score Breakdown

  1. 01MINORSystem declining 23.6% YoY (154 units) indicates accelerating franchisee exits and potential business model deterioration
  2. 02MINORNo average revenue or net income disclosure (Item 19) prevents assessment of actual profit potential and unit economics
  3. 03HIGHMultiple litigation patterns: class action for customer privacy violations, breach of contract suits from franchisees, and default judgments suggest systemic franchisor-franchisee relationship problems
  4. 04HIGHGoing Concern status is FALSE, signaling potential financial instability at corporate level that could impact franchisee support
  5. 05MEDHigh franchise fee ($50,000) relative to initial investment cap ($101,245 max) with 7.5% royalty on undisclosed revenue creates unfavorable risk-reward ratio

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.