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D70/100FDD 2025
LMI (Leadership Management Institute) — Litigation & Risk
Education - Tutoring & Test Prep · 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
70 / 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
1
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
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
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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 70/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-1.8% YoY) indicates shrinking franchise system with potential model sustainability concerns
- 02MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and earnings claims assessment
- 03HIGHGoing Concern status is FALSE, suggesting potential financial instability or viability questions at franchisor level
- 04MINORUnprotected territory creates direct competition risk from other LMI franchisees in same geographic market
- 05MINORLow initial investment ($22.5-32.6K) relative to service-based model may indicate thin margins or undercapitalized franchisees
- 06MINOR6% royalty on gross sales (not net) compounds profitability pressure, especially if average revenues are low
- 07MINOR5-year term is relatively short, reducing franchisee ability to recoup investment and build long-term equity
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.