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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MEDOnly 2 franchise units in entire system indicates minimal scale, unproven model, and extremely limited growth trajectory
- 02MINORNo net income disclosure (Item 19) prevents validation of actual profitability claims despite $770k average revenue figure
- 03HIGHGoing Concern status is FALSE, suggesting potential financial instability or uncertainty at corporate level
- 04MINORUnknown growth rate with only 2 units raises questions about system viability and franchisee recruitment success
- 05MINORHigh investment range ($129k-$340k) paired with micro-franchise footprint creates disproportionate risk exposure
- 06MINORNo royalty structure removes ongoing revenue incentive for franchisor to support franchisees long-term
- 07MED7-year term with limited comparable performance data makes exit strategy evaluation impossible
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.