D68/100FDD 2025
InXpress — Litigation & Risk
Business Services - Shipping & Postal · FDD Items 3, 4 & 5
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
68 / 100
FranchiseVerdict composite
Rating
CAUTION
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
21
Government-backed loans issued
Default rate
16.7%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$5.9M
Avg loan size
$279K
Participating lenders
7
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
Utah
State whose law governs disputes — relevant if you're not based there
What drove the 68/100 rating
Risk Score Breakdown
- 01MEDUnit decline of 21.3% YoY indicates systemic franchise system contraction and franchisee attrition
- 02MED30% royalty on gross margin is extremely high and creates cash flow pressure; combined with undisclosed net income, suggests profitability concerns
- 03HIGHMultiple active litigation cases (Mandalorian trade secret/breach, XGS and Toth debt collection) indicate franchisee disputes and collection issues
- 04MINORNo Item 19 financial disclosures despite $1.87M average revenue claims raises transparency red flags
- 05MINORTerritory unprotected in competitive logistics/shipping vertical increases cannibalization risk
- 06HIGHGoing concern status is FALSE — critical governance/financial stability issue
- 07MINOR5-year term is short and provides minimal runway for ROI recovery given high 30% margin royalty
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.