DBelow average34/100FDD 2025
Kitchen Wise: Litigation & Risk
Home Services · FDD Items 3, 4 & 5
Elevated Risk
17 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 17
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 34 / 100
- FranchiseVerdict composite · higher is better
- Rating
- D
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 9
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- Loans charged off or defaulted
- Total loan volume
- $1.3M
- Avg loan size
- $142K
- Participating lenders
- 1
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
- 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
- VA
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
3 case reference(s): 2 pending, 0 settled.
What drove the 34/100 verdict
Risk Score Breakdown
- 01MEDSystem contracting sharply: 8 units with -12.5% YoY decline indicates deteriorating franchisee success and retention
- 02HIGHSignificant litigation exposure: Multiple disclosed actions including fraud allegations, breach of contract, and trade secret misappropriation across franchisor and affiliated brands suggests systemic legal/operational issues
- 03MEDNet income not disclosed: Absence of Item 19 financial performance representation prevents verification that $568K average revenue translates to viable unit-level profitability
- 04MINORHigh minimum royalty burden: $150/week ($7,800/year) creates fixed cost floor that may be unsustainable for struggling units in declining system
- 05HIGHGoing concern status: Franchisor flagged as going concern raises questions about long-term viability, support infrastructure, and brand investment
- 06MINORHigh initial investment relative to system size: $119K-$198K franchise fee in 8-unit system with no profitability data creates significant downside risk
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.