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A45/100FDD 2025
LeafSpring School — Litigation & Risk
Education - Children's Programs · FDD Items 3, 4 & 5
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
45 / 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
50.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$4.6M
Avg loan size
$1.5M
Participating lenders
3
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 45/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 7.7% YoY (13 total units) indicates contracting system and potential market saturation or operational issues
- 02MINORWide investment range ($978K–$9.4M) suggests highly variable unit economics and unclear cost structure across territories
- 03HIGHNo going concern statement despite declining unit base raises questions about franchisor financial stability and long-term viability
- 04MINORRoyalty structure front-loaded with 0% Year 1 then jumps to 6% suggests potential cash flow pressure for franchisees in years 4+
- 05MEDAverage net income of $525K on $3.54M revenue (14.8% margin) is thin for education sector and leaves limited buffer for underperformance
- 06MEDMissing Item 19 (Financial Performance Representations) prevents validation of average unit economics claims
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.