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B55/100FDD 2025

Funcation Station — Litigation & Risk

Education - Children's Programs · FDD Items 3, 4 & 5

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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
55 / 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
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 55/100 rating

Risk Score Breakdown

  1. 01MINOROnly 3 operating units with unknown growth trajectory indicates extremely small, unproven system with high failure risk
  2. 02HIGHGoing Concern status is FALSE — suggests franchisor financial instability or viability questions
  3. 03MEDNo Item 19 (financial performance representations) disclosed — cannot verify claimed $375,705 avg revenue or $153,791 net income figures
  4. 04MINOR8% royalty on $375K average revenue = $30K annual royalties, which represents 19.5% of claimed net income — unsustainably high cost structure
  5. 05MEDMassive investment range spread ($57K-$134K) suggests inconsistent unit economics or hidden costs not fully disclosed
  6. 06MINORFranchise fee ($25K) is 44% of minimum investment floor — disproportionately high upfront cost relative to total investment

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.