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B59/100FDD 2024

Hi-5 Aba — 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
59 / 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
Virginia
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial distability of franchisor
  2. 02MEDNo average revenue or net income disclosed (no Item 19) — impossible to validate ROI on $17,618–$109,730 investment
  3. 03HIGHFounder David Maddox involved in pending litigation ($145k+ dispute in Ghana) — raises governance and character concerns
  4. 04MINORTerritory NOT protected — franchisees compete with corporate and other franchisees in same market
  5. 05MED7% royalty on undisclosed revenue base creates uncertainty about actual profitability
  6. 06MINORHigh unit growth (33.3% YoY) with only 29 units suggests either aggressive expansion or difficulty retaining franchisees

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.