Moderate — Review
4 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
71 / 100
FranchiseVerdict composite
Rating
CAUTION
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
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 71/100 rating
Risk Score Breakdown
- 01HIGHGoing concern status is FALSE — indicates the franchisor itself may be financially unstable or operationally uncertain
- 02HIGHExtensive litigation history spanning 29 years (1993 FTC injunction, Maryland 1996, California 2021 & 2022) suggests chronic compliance issues with franchise sales practices and potential predatory patterns
- 03MEDZero disclosed franchise units with unknown growth trajectory — impossible to validate system health, franchisee success rates, or market viability
- 04MINORNo average net income disclosure violates Item 19 transparency standards and prevents ROI validation on $168k-$395k investment
- 05MEDHigh royalty burden (greater of 6% or $500-$1,000/month minimum) with undisclosed average revenues makes profitability unpredictable
- 06HIGH35-year term is unusually long and locks franchisees into relationship with litigation-prone franchisor for over 3 decades
- 07MINORFranchise fee ($49,500) represents 29-30% of minimum investment, suggesting franchisor revenue-dependent on recruitment rather than franchisee success
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.