F93/100FDD 2022
Legato Living — Litigation & Risk
Health & Wellness - Senior Care · 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
93 / 100
FranchiseVerdict composite
Rating
AVOID
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
5
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$2.2M
Avg loan size
$447K
Participating lenders
1
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
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
Nebraska
State whose law governs disputes — relevant if you're not based there
What drove the 93/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern warning indicates franchisor financial distress or viability questions
- 02MINOROnly 2 units systemwide suggests failed or stalled franchise system with no growth trajectory
- 03MINORNo average revenue or net income disclosure prevents ROI validation and suggests poor unit performance
- 04MINOR50% royalty on net fees is extremely high and creates misaligned incentives between franchisor and franchisees
- 05MINORNo territory protection exposes franchisees to direct competition from other franchisees and franchisor
- 06MINORZero franchise fee with high initial investment suggests franchisor prioritizes capital extraction via ongoing royalties over sustainable partnerships
- 07MINORUnknown growth history with only 2 units indicates system may be contracting or failed to scale
- 08MINOR10-year term locks franchisees into relationship with financially unstable franchisor
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.