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D76/100FDD 2024

Gradum Gswing — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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
76 / 100
FranchiseVerdict composite
Rating
CAUTION
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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 76/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is False — indicates financial distress or viability concerns at franchisor level
  2. 02HIGHActive litigation against former franchisee for IP/confidentiality violations suggests operational or enforcement issues
  3. 03MINOROnly 13 units system-wide with unknown growth trajectory — unable to verify expansion momentum or franchisee success sustainability
  4. 04MINORNet income of $55,933 on $233,082 revenue (24% net margin) appears optimistic given 8% royalty + operating costs; no Item 19 financial performance representations provided
  5. 05MINORHigh investment range ($330K-$680K) combined with modest average revenue creates extended breakeven risk
  6. 06MINOR20-year term locks franchisees into relationship with a franchisor showing financial weakness
  7. 07MINORLack of transparent unit growth data suggests possible system contraction or underperformance being obscured

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.