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D77/100FDD 2024

Flowerama — Litigation & Risk

Retail · FDD Items 3, 4 & 5

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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
77 / 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
91
Government-backed loans issued
Default rate
24.7%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
21 loans
Loans charged off or defaulted
Total loan volume
$24.3M
Avg loan size
$267K
Participating lenders
20

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

What drove the 77/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 11.1% year-over-year (40 units) indicating system contraction and potential market saturation or franchisee dissatisfaction
  2. 02HIGHTwo major litigation events including Maryland regulatory action for disclosure violations and settled multi-plaintiff breach of contract/fraud lawsuit suggesting governance issues and franchisee relations problems
  3. 03MEDNo average revenue or net income disclosed in FDD Item 19, making it impossible to validate ROI claims or benchmark profitability against the $227k-$1.17M investment range
  4. 04MED6% royalty on gross sales combined with undisclosed net income creates uncertainty about actual take-home profit and break-even timeline
  5. 05HIGHGoing concern status despite shrinking unit base raises questions about franchisor sustainability and long-term support viability

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.