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F89/100FDD 2023

Jomsom Staffing Services — Litigation & Risk

Business Services - Staffing · FDD Items 3, 4 & 5

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Elevated Risk

11 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
11
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
89 / 100
FranchiseVerdict composite
Rating
AVOID
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
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 89/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status is FALSE — franchisor cannot guarantee ability to continue operations
  2. 02HIGHSevere litigation history involving founder John Hewitt with allegations of fraud, tortious interference, and securities violations from Liberty Tax Service tenure
  3. 03MEDOnly 1 franchised unit in system with no disclosed growth trajectory — indicates failed or stalled expansion
  4. 04MINORRoyalty structure of 50% of net fees is extremely aggressive and unsustainable for franchisee profitability
  5. 05MEDNo average revenue or net income disclosure (missing Item 19) — impossible to validate earnings claims
  6. 06MINORNo protected territory — direct competition from other franchisees and company-owned operations
  7. 07HIGHHigh franchise fee ($100,000) relative to single-unit system and going concern status creates poor risk/reward ratio
  8. 08HIGHManagement credibility severely compromised by founder's documented history of fraudulent practices and litigation

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.