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A43/100FDD 2025

Global Recruiters Network — Litigation & Risk

Other · 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
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
1
Government-backed loans issued
Default rate
100.0%
vs <3% typical · system-wide
5-yr default rate
100.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$150K
Avg loan size
$150K
Participating lenders
1

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

What drove the 43/100 rating

Risk Score Breakdown

  1. 01MEDNo average revenue or net income disclosed (Item 19) — impossible to assess ROI on $32.6k-$44.7k investment
  2. 02MINORStagnant unit growth (0.6% YoY) suggests market saturation or franchisee dissatisfaction
  3. 03MINORNo protected territory — direct competition from other franchisees in same market
  4. 04MINORTiered royalty structure (10% down to 4%) creates incentive misalignment and suggests franchisor dependency on high-volume units
  5. 05MED10-year term is longer than industry standard (5-7 years typical) with limited flexibility
  6. 06MEDLow franchise fee ($20k) relative to total investment suggests thin franchisor margins and limited support infrastructure

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.