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Elevated Risk
20 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
20
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
34 / 100
FranchiseVerdict composite
Rating
STRONG
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
98
Government-backed loans issued
Default rate
6.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
5 loans
Loans charged off or defaulted
Total loan volume
$91.2M
Avg loan size
$930K
Participating lenders
42
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
3 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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 34/100 rating
Risk Score Breakdown
- 01MINORNo Item 19 (Average Unit Volume) disclosure despite 2,083 units — inability to validate $1.08M average revenue claim independently
- 02HIGHLitigation involving consumer fraud allegations and multiple franchisee arbitration cases regarding renewal terms and supply agreements signal systemic disputes
- 03MINORSlowing unit growth at 2.6% YoY in a mature 2,083-unit system suggests market saturation and potential franchisee struggles
- 04MEDHigh initial investment range ($232K-$520K) paired with undisclosed net income creates inability to project actual owner earnings
- 05MINORMultiple arbitration cases with franchisees specifically over renewal terms (20-year franchise) indicate contentious franchisor-franchisee relationships
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.