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
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — indicates potential financial distress or legal/operational issues at corporate level
- 02MINOROnly 4 units system-wide suggests either pre-launch stage or severe underperformance and lack of franchisee retention
- 03MINORNo average revenue or net income disclosure (no Item 19) makes ROI projections impossible and prevents validation of $163,700-$282,800 investment viability
- 04MINORRoyalty structure with $20/sq ft annual minimum is unusually high and creates fixed costs unrelated to actual sales performance
- 05MEDFranchise fee of $40,000 combined with high minimum royalties creates significant breakeven burden with no disclosed unit economics
- 06MINOR10-year term is long commitment given minimal system traction and no disclosure of franchisee success rates
- 07MINORUnknown growth trajectory with only 4 units provides no evidence of scalability or market validation
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.