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Elevated Risk
59 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
59
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 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
2
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
$8.2M
Avg loan size
$4.1M
Participating lenders
0
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
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
Georgia
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01HIGHGoing concern warning indicates potential financial distress at corporate level
- 02MEDHigh initial investment ($16.9M-$25.2M) with no disclosed average unit volumes or net income to validate ROI
- 03MEDOnly 19 units systemwide suggests minimal scale, limited support infrastructure, and potential brand viability issues
- 04HIGHMultiple litigation cases including class actions and system access disputes indicate operational and governance problems
- 05MINORUnprotected territory creates direct competition risk and cannibalization potential within franchise network
- 06MINORNo Item 19 financial performance disclosure prevents due diligence validation of unit economics
- 07MINORUnknown or stagnant unit growth trajectory suggests market rejection or corporate inability to recruit franchisees
- 08MINOR5% royalty on gross rooms revenue with $75K franchise fee is aggressive given brand size and support capability
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.