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
57 / 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
13
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.2M
Avg loan size
$249K
Participating lenders
8
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
Kansas
State whose law governs disputes — relevant if you're not based there
What drove the 57/100 rating
Risk Score Breakdown
- 01MINORExtremely high royalty rate (33.33%) on continuing fees creates severe cash flow pressure and limits franchisee profitability
- 02MEDOnly 5 operating units with no disclosed average revenue/net income makes performance validation impossible
- 03MINOR67% YoY unit growth appears positive but from a micro base (3→5 units) indicates unstable franchise system
- 04HIGHGoing Concern status is False but paired with minimal disclosure suggests financial stress at franchisor level
- 05MINORNo Item 19 financial performance representations prevents informed ROI projections
- 06MINORHigh initial investment ($119K-$182.5K) relative to tiny unit base raises sustainability questions
- 07MINOR5-year term is relatively short and may indicate franchisor uncertainty about system viability
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.