Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
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
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
43
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
25.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$13.2M
Avg loan size
$308K
Participating lenders
6
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
Pennsylvania
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 12% YoY (94 units, 88% retention) indicating system contraction and potential franchisee dissatisfaction
- 02HIGHActive litigation involving parent company ownership/governance raises questions about franchisor stability and leadership direction
- 03MEDNet income not disclosed in FDD Item 19 makes ROI impossible to verify; only average revenue of $1.13M provided without profitability context
- 04MEDHigh initial investment ($195k-$256k) combined with undisclosed net income creates significant financial risk for franchisees
- 05MINORMinimum royalty fee of $500/month ($6,000 annually) creates cash flow pressure for struggling locations, especially in early years
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.