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B64/100FDD 2025

GNC — Litigation & Risk

Health & Wellness - Other · FDD Items 3, 4 & 5

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Elevated Risk

33 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
33
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
64 / 100
FranchiseVerdict composite
Rating
MODERATE
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
10
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.9M
Avg loan size
$189K
Participating lenders
7

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
1 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 64/100 rating

Risk Score Breakdown

  1. 01MINORSystem declining 6.3% YoY with 2,140 units suggests market contraction and potential viability concerns
  2. 02HIGHNumerous active litigations across trademark, employment, and consumer class actions indicate systemic operational and compliance issues
  3. 03HIGHGoing concern status raises questions about franchisor's financial stability and ability to support franchisees long-term
  4. 04MEDNo disclosed average net income creates opacity around actual profitability; $475K revenue with 6% royalty leaves unclear margins after COGS
  5. 05HIGHHigh litigation frequency (especially wage/hour and product labeling) suggests compliance challenges that could affect franchisee liability exposure
  6. 06MINOR5-year term is relatively short; combined with declining unit count, indicates potential challenges renewing or growing territory

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.