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B66/100FDD 2025

Delux — Litigation & Risk

Other · 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
66 / 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
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
New York
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern warning indicates franchisor financial distress or operational viability questions
  2. 02MEDExtreme 30% royalty rate on gross fares (not net) with no disclosed average revenue/net income makes profitability opaque and risky
  3. 03MINORMinimal unit growth (2.4% YoY, 128 units) suggests stagnant or declining system health
  4. 04MINORZero territory protection leaves franchisees vulnerable to direct competition from other franchisees
  5. 05MINORNo Item 19 financial disclosures prevents validation of earnings claims and franchisee profitability
  6. 06MINORLow initial investment ($22.5K-$32.5K) may indicate low barrier to entry but insufficient capital for sustainable operations
  7. 07MED5-year term is relatively short, creating renewal uncertainty and limited business planning horizon

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.