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B56/100FDD 2025

Imagine Arts Academy — Litigation & Risk

Education - Children's Programs · 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
56 / 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
Quebec
State whose law governs disputes — relevant if you're not based there

What drove the 56/100 rating

Risk Score Breakdown

  1. 01MINORParent company (Mad Science Group) has regulatory history: 2013 Maryland consent order for unregistered franchise offers and disclosure failures
  2. 02MINORNo Item 19 financial performance disclosure — cannot verify average unit economics or profitability claims
  3. 03MINORRapid unit growth (28.6% YoY) with only 27 units is concerning for quality control and suggests possible aggressive recruiting over franchisee support
  4. 04MEDHigh initial investment ($128K–$168K) combined with 8% royalty and no disclosed average revenue creates uncertainty on ROI timeline
  5. 05HIGHGoing Concern status is 'False' — requires clarification on franchisor's financial stability and parent company relationship

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.