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A43/100FDD 2024
Fortune Practice Management — Litigation & Risk
Health & Wellness - Other · FDD Items 3, 4 & 5
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
43 / 100
FranchiseVerdict composite
Rating
STRONG
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
3
Government-backed loans issued
Default rate
66.7%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$105K
Avg loan size
$35K
Participating lenders
2
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 43/100 rating
Risk Score Breakdown
- 01MINORNo Item 19 financial performance disclosure despite 12% royalty burden limits transparency on actual franchisee profitability
- 02MINORMinimal system growth (3.0% YoY expansion) suggests market saturation or weak unit economics in a 68-unit system
- 03HIGHGoing Concern status is FALSE, indicating potential financial instability at franchisor level despite no disclosed litigation
- 04MINORWide investment range ($35.6K–$175K) without clear breakdown creates ambiguity on startup capital requirements and ROI expectations
- 05MINOR12% monthly royalty on gross receipts is high-end for service-based franchises and could strain margins in low-revenue months
- 06MEDNo disclosed average unit volume (AUV) or net income makes it impossible to validate break-even timeline or payback period
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.