Duan Chun Zhen — Litigation & Risk

1. 01HIGHGoing Concern status is FALSE — indicates the franchisor may not be financially viable as an ongoing business
2. 02HIGHLitigation history includes misrepresentation of authority to sell franchises and multi-state registration violations (NY, CA, WA), suggesting regulatory non-compliance and potential fraud
3. 03MINOROnly 3 existing units with unknown growth trajectory — minimal proof of concept and severe lack of franchisee success data
4. 04MEDAverage Revenue and Net Income not disclosed — complete opacity on franchisee profitability makes ROI assessment impossible
5. 05MINORNo protected territory — franchisees face direct competition from other franchisees in the same area
6. 06MINOREscalating royalty structure (4% to 5%) combined with high investment range ($311k–$708k) creates cash flow pressure without proven unit economics
7. 07MINORMaster Franchisor involved in breach of contract disputes — raises questions about franchisor reliability and contract enforcement
8. 08MINORHigh franchise fee ($60k) relative to tiny system size (3 units) suggests fee-driven growth model rather than sustainable franchising

Severity inferred from FDD text — not a regulatory or legal classification