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
51 / 100
FranchiseVerdict composite
Rating
STRONG
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
Not waived
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 51/100 rating
Risk Score Breakdown
- 01MEDOnly 13 units system-wide with unknown growth trajectory suggests limited scale and market validation
- 02MINORWide investment range ($395K-$979K) indicates inconsistent startup costs or unclear disclosure
- 03MINORNo Item 19 financial performance representations provided; average revenue/income figures lack context on unit count sampled
- 04MINOR6% royalty on $1.57M average revenue = ~$94K annual fee is substantial relative to $332K net income (28% of net)
- 05MINORUnknown unit growth rate prevents assessment of system momentum or franchisee success pattern
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.