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B62/100FDD 2025

Kitchen Wise — Litigation & Risk

Home Services - Other · FDD Items 3, 4 & 5

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Elevated Risk

15 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
15
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
62 / 100
FranchiseVerdict composite
Rating
MODERATE
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
9
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
33.3%
Defaults
1 loans
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
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
Virginia
State whose law governs disputes — relevant if you're not based there

What drove the 62/100 rating

Risk Score Breakdown

  1. 01MEDSystem contracting sharply: 8 units with -12.5% YoY decline indicates deteriorating franchisee success and retention
  2. 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
  3. 03MEDNet income not disclosed: Absence of Item 19 financial performance representation prevents verification that $568K average revenue translates to viable unit-level profitability
  4. 04MINORHigh minimum royalty burden: $150/week ($7,800/year) creates fixed cost floor that may be unsustainable for struggling units in declining system
  5. 05HIGHGoing concern status: Franchisor flagged as going concern raises questions about long-term viability, support infrastructure, and brand investment
  6. 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.