FranchiseVerdict
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D72/100FDD 2026

Ferncrest — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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
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
1
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
$840K
Avg loan size
$840K
Participating lenders
1

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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern Warning: Franchisor marked 'False' indicating potential financial distress or viability questions
  2. 02MEDExtreme Information Opacity: No average revenue, net income, or growth metrics disclosed—impossible to validate ROI on $501K-$1.79M investment
  3. 03MINORMicroscopic System Size: Only 3 units operating with unknown growth trajectory suggests either pre-revenue concept or contraction
  4. 04MEDHigh Capital Requirement with Hidden Economics: $501K minimum investment + 7% royalty on undisclosed revenues creates unquantifiable risk
  5. 05MINORNo Performance Benchmarks: Absence of Item 19 financial performance representations prevents any legitimate financial modeling
  6. 06MINORRapid Scaling Red Flag: $1.79M maximum investment suggests franchisor expects significant growth, but 3-unit base cannot support claims
  7. 07MINORFranchise Fee Structure: $50K fee is moderate, but trivial compared to total investment—suggests low franchisor capital commitment

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.