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B61/100FDD 2025

House of Core — Litigation & Risk

Health & Fitness · 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
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
61 / 100
FranchiseVerdict composite
Rating
MODERATE
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 61/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — franchisor may have financial viability issues or undisclosed structural problems
  2. 02MEDNet Income not disclosed — inability to assess actual profitability despite $439K average revenue; royalty escalation to 9% by year 6 could compress margins significantly
  3. 03MEDOnly 1 unit in system — suggests either brand is brand new, failed to scale, or data is incomplete; impossible to validate growth trajectory or system health
  4. 04MINORRoyalty structure escalates 80% (5% to 9%) — franchisee profitability deteriorates materially in years 4-6, creating retention/sustainability risk
  5. 05HIGHNo litigation disclosed but Going Concern is FALSE — suggests potential undisclosed disputes, regulatory issues, or franchisor financial stress
  6. 06MINORUnknown unit growth — no historical AUV trends, no disclosure of openings/closures; cannot assess market viability

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.