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D72/100FDD 2026

Itex — Litigation & Risk

Other · 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
72 / 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
Washington
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MEDSystem shrinking: 5.7% unit decline YoY with only 33 locations suggests dying franchise model
  2. 02HIGHSEC fraud history: 2000 judgment for misstated financials indicates historical credibility issues with franchisor
  3. 03MINORNo financial disclosure: Average revenue and net income not provided in FDD Item 19 prevents ROI validation
  4. 04MEDUnsustainable commission structure: 25% royalty on transaction fees only (not gross revenue) creates thin, unpredictable income dependent on franchisee hustle
  5. 05MINORNo territory protection: Open territory invites internal competition and cannibalization among 33 remaining franchisees
  6. 06MINORDecaying unit base: Lost 2 locations in past year; franchise likely entering death spiral if trend continues
  7. 07MINOR5-year term is short: Minimal time to recoup $10K-$37.7K investment before renegotiation uncertainty

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.