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A49/100FDD 2026

Junkco+ — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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
49 / 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
3
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$630K
Avg loan size
$210K
Participating lenders
1

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
1.5 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
Michigan
State whose law governs disputes — relevant if you're not based there

What drove the 49/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in FDD despite $815K average revenue — impossible to assess true profitability or ROI on $190K-$338K investment
  2. 02MINOROnly 20 units system-wide with unknown growth trajectory — indicates either early-stage concept or stalled expansion; insufficient scale for franchisor support infrastructure
  3. 03MEDEscalating royalty structure (4% to 5-8%) creates margin compression over time; combined with undisclosed net income, franchisees cannot model cash flow accurately
  4. 04HIGHGoing Concern = False is ambiguous language; requires clarification on franchisor financial stability and ability to provide ongoing support
  5. 05MINORHigh franchise fee ($55K) relative to small unit count suggests franchisor may be fee-dependent rather than system-growth focused
  6. 06MINORProtected territory provided but no detail on territory size, density, or exclusivity enforcement mechanisms

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.