FranchiseVerdict
Jung Kwan Jang Store logo
B60/100FDD 2025

Jung Kwan Jang Store — Litigation & Risk

Health & Wellness - Other · FDD Items 3, 4 & 5

Back to overview

Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
60 / 100
FranchiseVerdict composite
Rating
MODERATE
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 60/100 rating

Risk Score Breakdown

  1. 01MEDNo average revenue or net income disclosed in FDD — cannot assess unit economics or ROI potential
  2. 02HIGHGoing concern issue flagged as False, suggesting potential franchisor financial instability or recent operational challenges
  3. 03MINORSlow unit growth of 5.9% YoY with only 37 locations indicates minimal system expansion and market traction
  4. 04MINORNo protected territory — franchisees face direct competition from other franchisees and corporate locations
  5. 05MINOR3-year term is unusually short, creating uncertainty and limiting franchisee ability to recoup $108k-$309k investment
  6. 06MINORLow royalty rate (3%) may indicate franchisor is underfunded and relying on franchise fees rather than ongoing support

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.