A49/100FDD 2026
EOS Worldwide — Litigation & Risk
Education - Tutoring & Test Prep · 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
49 / 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
8
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$880K
Avg loan size
$110K
Participating lenders
7
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
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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 49/100 rating
Risk Score Breakdown
- 01MINORStagnant unit growth (0.8% YoY on 738 units indicates system contraction or maturation crisis)
- 02MEDNet income not disclosed in FDD — unable to validate $392k avg revenue translates to acceptable profit after $17.6k-$21.4k annual royalties
- 03MINORHigh royalty burden ($1,465-$1,780/month = 4.5-5.4% of avg revenue) with unprotected territory creates race-to-bottom pricing
- 04MINORNo territory protection — franchisees directly compete with other EOS locations and cannibalization risk is high
- 05MINORLow franchise fee ($5,000) suggests weak franchisor support infrastructure and minimal franchisee commitment screening
- 06MINOR5-year term is shorter than industry standard (typically 10 years), creating renewal uncertainty and higher replacement costs
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.