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
58 / 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
No
Franchisor can match any purchase offer when you try to sell
Governing law
California
State whose law governs disputes — relevant if you're not based there
What drove the 58/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 4.1% YoY (211 units) signals system contraction and potential market saturation or franchisee churn
- 02MINORNo average revenue or net income disclosure (Item 19) prevents income verification and ROI assessment—critical gap for $13,395+ investment
- 03MINORHistorical securities violations (Maryland 2005/2007) for unlicensed franchise sales demonstrate past regulatory non-compliance and reputational risk
- 04MINORWide investment range ($2,745–$28,685) with no clarification on what drives 10x variance creates transparency concerns about true startup costs
- 05MINOR5% royalty on Lite Model eats into already-thin fitness/wellness service margins, especially if revenue disclosure shows <$100K average
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.