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F85/100FDD 2024

Groutsmith — 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
—
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
85 / 100
FranchiseVerdict composite
Rating
AVOID
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
2
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

What drove the 85/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status indicates franchisor financial distress or viability questions
  2. 02MEDZero disclosed financial metrics (revenue, net income, unit count, growth) suggests either non-disclosure or lack of established track record
  3. 03MEDUnknown royalty structure and franchise fee ($0 listed) is highly unusual and suggests incomplete or problematic disclosure
  4. 04MINORUnknown territory protection creates direct competition risk and potential channel conflict with other franchisees
  5. 05MINORUnknown franchise term length indicates unstable or undefined business relationship
  6. 06MEDAbsence of any unit growth data suggests stagnation, decline, or brand in early/failed stage
  7. 07HIGHNo litigation disclosed may indicate young system with insufficient scale to have legal disputes, rather than clean history

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.