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A52/100FDD 2022
Hite Digital — Litigation & Risk
Business Services - Other · FDD Items 3, 4 & 5
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
52 / 100
FranchiseVerdict composite
Rating
STRONG
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
1
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$175K
Avg loan size
$175K
Participating lenders
1
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 52/100 rating
Risk Score Breakdown
- 01MEDNet income not disclosed in FDD Item 19 — impossible to assess actual profitability despite $304k average revenue
- 02MINORUnprotected territory creates direct competition risk; multiple franchisees in same market could cannibalize revenue
- 03MINORExtremely rapid unit growth (275% YoY) suggests either aggressive recruitment or high churn — sustainability unclear with only 16 units
- 04MINORHigh royalty burden (greater of $250/month floor OR 8% of sales) could consume 40-50% of net profits at lower revenue levels
- 05MINORFranchise fee of $49,950 represents 16% of total investment but profitability timeline unknown without Item 19 data
- 06MINORYoung system with minimal operational history; no long-term franchisee retention data available
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.