FranchiseVerdict
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B67/100FDD 2022

KeyGlee — Litigation & Risk

Real Estate · 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
67 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 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
Arizona
State whose law governs disputes — relevant if you're not based there

What drove the 67/100 rating

Risk Score Breakdown

  1. 01MINORExtreme unit growth of 278.3% YoY suggests either aggressive recruitment or high churn; unsustainable expansion raises sustainability questions
  2. 02MINORNo territory protection creates direct competition risk and cannibalization between franchisees in same market
  3. 03MINORHigh royalty floor of $5,250/month ($63,000 annually) represents 5.5% of average franchise net income, creating significant fixed cost burden
  4. 04HIGHGoing Concern status FALSE is concerning; unclear if this indicates franchisor financial distress or data error requiring clarification
  5. 05MEDFranchise fee of $100,000 combined with $124,800-$274,050 total investment is substantial relative to disclosed average net income of $1.13M across all 97 units
  6. 06MINORItem 19 Financial Performance Representations absent; cannot validate if average revenue/income figures are achievable or representative of typical unit

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.