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B63/100FDD 2025

JEI Learning Center — Litigation & Risk

Education - Tutoring & Test Prep · FDD Items 3, 4 & 5

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Elevated Risk

8 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 100
FranchiseVerdict composite
Rating
MODERATE
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
2
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MEDUnit decline of 4.2% YoY indicates shrinking franchise system with potential market saturation or franchisee satisfaction issues
  2. 02MEDNo Item 19 financial disclosures (Avg Revenue and Net Income not disclosed) prevents independent validation of investment returns and profitability claims
  3. 03HIGHHistory of litigation including trade secret misappropriation by predecessor (Daekyo America) and unregistered franchise sales violations suggests compliance and IP protection vulnerabilities
  4. 04HIGHCurrent aggressive litigation strategy (4 active lawsuits against former franchisees for non-compete enforcement) signals franchisor may be experiencing system deterioration and protecting turf rather than supporting franchisees
  5. 05MINORPer-subject royalty model ($23-$35/subject) creates unpredictable revenue streams and may incentivize aggressive student recruitment tactics or quality compromises
  6. 06HIGHGoing concern flag indicates potential financial viability questions about franchisor's long-term sustainability

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.