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D72/100FDD 2025

Fitness 19 — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

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Elevated Risk

7 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
7
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

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

What drove the 72/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status is FALSE — indicates the franchisor may be financially unstable or facing existential business challenges
  2. 02MINOROnly 6 units operating with 33.3% YoY growth is extremely low for a mature fitness brand — suggests market rejection or rapid closures
  3. 03HIGHMultiple serious litigation cases involving fraud, embezzlement, and breach of fiduciary duty indicate internal corruption and governance failures
  4. 04MEDNo disclosed average revenue or net income data — inability or unwillingness to provide Item 19 prevents ROI validation
  5. 05MEDHigh investment range ($1.4M–$3M) combined with 7% royalty on undisclosed revenues creates significant downside risk with no earnings visibility
  6. 06MINORNaked licensing and trademark infringement claims suggest franchisor lacks control over brand integrity and legal IP protections
  7. 07MINORLease disputes indicate franchisees are unable to negotiate favorable real estate terms, signaling weak franchisor support

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.