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
63 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
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
Nevada
State whose law governs disputes — relevant if you're not based there
What drove the 63/100 rating
Risk Score Breakdown
- 01MINOROnly 1 unit in system with unknown growth trajectory indicates minimal track record and unproven scalability
- 02HIGHGoing Concern status is FALSE — suggests the franchisor itself may face viability questions
- 03MINORNo protected territory creates direct cannibalization risk if franchisor opens competing units nearby
- 04MINORWide investment range ($283K–$507K, 79% spread) signals unclear cost structure or inconsistent buildout standards
- 05MINORItem 19 financial claims ($146.8K net income) are based on single unit — statistically insignificant sample size
- 06HIGHNo disclosed litigation is positive but suspicious given single-unit history provides limited lawsuit exposure opportunity
- 07MINOR7% royalty on $666K average revenue = $46.6K annual royalty burden (31.7% of reported net income) — very high
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.