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
68 / 100
FranchiseVerdict composite
Rating
CAUTION
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
76
Government-backed loans issued
Default rate
22.9%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
16 loans
Loans charged off or defaulted
Total loan volume
$14.4M
Avg loan size
$190K
Participating lenders
32
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
Massachusetts
State whose law governs disputes — relevant if you're not based there
What drove the 68/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 2.3% YoY (86 total units) suggests shrinking franchise system and potential market saturation or franchisee dissatisfaction
- 02MEDNet income not disclosed in Item 19 — unable to validate actual profitability; average revenue of $836,884 means nothing without expense data
- 03MINORHigh royalty floor of $1,500/month ($18,000 annually) creates fixed cost burden even during slow sales periods, reducing flexibility
- 04MINORInitial investment range ($201,491–$387,514) is substantial for a learning center with declining unit count and unproven net margins
- 05MINOR10-year term is long given system contraction; difficult to exit if performance underperforms
- 06MEDFranchise fee of $40,000 is moderately high relative to declining system size and lack of disclosed profitability metrics
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.