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B67/100FDD 2022

Lendio — Litigation & Risk

Business Services - Tax & Financial · FDD Items 3, 4 & 5

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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
67 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Non-compete
1.5 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
Utah
State whose law governs disputes — relevant if you're not based there

What drove the 67/100 rating

Risk Score Breakdown

  1. 01MINORExtremely high royalty structure (30-70% of gross revenues) leaves minimal profit margin for franchisees
  2. 02MINORNo average revenue or net income disclosure in FDD Item 19 prevents realistic ROI modeling
  3. 03MINORUnit growth of 80.6% YoY suggests either aggressive recruitment or system instability; cannot assess unit quality
  4. 04MINORWide investment range ($45,650-$117,100) indicates inconsistent territory valuations or hidden costs
  5. 05MINOR5-year term is shorter than industry standard (10 years), creating renewal uncertainty and frequent renegotiation risk
  6. 06MINORLending/fintech sector faces increasing regulatory scrutiny; compliance costs not addressed in investment figures

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.