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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial performance data disclosed — impossible to validate ROI claims or average unit economics
- 02MINORExtremely small system (6 units) with no historical stability data — high failure risk in early-stage franchises
- 03HIGHGoing Concern status is FALSE, indicating potential financial distress at franchisor level
- 04MINOR9% royalty + $600 monthly minimum on unknown revenue base creates unpredictable cost structure for franchisees
- 05MINORExplosive 200% YoY growth from micro base (likely 2 units → 6 units) is statistically meaningless and unsustainable
- 06MINORHigh investment range ($63K–$225K) relative to system size suggests unclear unit economics and inconsistent buildouts
- 07MINOR5-year term is relatively short; insufficient time to recover investment at unclear profitability levels
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.