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D75/100FDD 2025

Drift Zone — 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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
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
1
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$277K
Avg loan size
$277K
Participating lenders
1

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
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
Hawaii
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MEDOnly 2 units in system with unknown growth trajectory suggests extremely limited operating history and minimal proof of concept
  2. 02MEDNo disclosed net income despite $474k average revenue raises questions about actual profitability and sustainability
  3. 03HIGHGoing Concern status is FALSE, indicating serious financial viability concerns at corporate level
  4. 04MINORWide investment range ($269.5k-$598k) without clear breakdown suggests undefined operational requirements or cost control issues
  5. 05HIGHNo litigation disclosed but Going Concern flag suggests potential undisclosed legal or financial stress
  6. 06MINORMinimal franchise fee ($39.5k) relative to total investment may indicate weak franchisor support or underfunded infrastructure

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.