A47/100FDD 2025
Hydrate IV Bar — Litigation & Risk
Health & Wellness - Other · FDD Items 3, 4 & 5
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
47 / 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
7
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
$2.0M
Avg loan size
$292K
Participating lenders
4
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
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 47/100 rating
Risk Score Breakdown
- 01HIGHRecent trademark litigation (April-June 2024) involving affiliate suggests brand protection vulnerabilities and internal governance issues
- 02MINORNo Item 19 (Financial Performance Representations) disclosure — claimed $721k avg revenue cannot be independently verified
- 03MINORAggressive 50% YoY unit growth with only 17 locations is atypical and suggests either rapid expansion or possible unit churning
- 04MINORHigh royalty rate of 8% plus $50k upfront fee creates $83.6k+ annual burden on franchisees at average revenue levels
- 05HIGHGoing Concern status is FALSE — absence of affirmative going concern language in FDD is concerning for newer franchise systems
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.