A53/100FDD 2026
Destination Athlete — Litigation & Risk
Health & Fitness · FDD Items 3, 4 & 5
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
53 / 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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.2M
Avg loan size
$623K
Participating lenders
2
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 53/100 rating
Risk Score Breakdown
- 01MEDNo average revenue or net income disclosed (Item 19 missing) — impossible to assess profitability or ROI
- 02MINORSlow unit growth of 5.7% YoY suggests market saturation or franchisee underperformance in a 296-unit system
- 03MINORWide investment range ($28,300–$135,110) indicates inconsistent startup costs and unclear capital requirements
- 04MINORDual royalty structure (5% vs. 9%) creates complexity and incentivizes non-internet sales, limiting scalability
- 05MINOR10-year term is longer than industry standard (typically 5–7 years), reducing franchisee flexibility and exit options
- 06MINORProtected territory undefined in scope — risk of encroachment or unclear protected area boundaries
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.