Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 70/100 rating
Risk Score Breakdown
- 01HIGHGoing concern issue (False) indicates potential financial instability at franchisor level
- 02MINORExtremely high royalty rate of 56% of gross profit leaves minimal margin for franchisee profitability
- 03MINORNo revenue or net income disclosure prevents accurate ROI assessment
- 04MINORTwo lawsuits involving discrimination and misrepresentation claims suggest franchisor-franchisee relationship problems
- 05MINOR104 units with unknown growth trajectory suggests possible stagnation or contraction
- 06MINORNo protected territory creates direct competition between franchisees
- 07MINORWide investment range ($30K-$1.17M) indicates inconsistent unit economics
- 08MINOR5-year term is shorter than industry standard, creating renewal uncertainty
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.