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B61/100FDD 2025

Mad Science — Litigation & Risk

Education - Children's Programs · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
61 / 100
FranchiseVerdict composite
Rating
MODERATE
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
4
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
Total loan volume
$3.1M
Avg loan size
$766K
Participating lenders
3

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
Quebec
State whose law governs disputes — relevant if you're not based there

What drove the 61/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — franchisor may have solvency or operational viability issues
  2. 02MEDNet income not disclosed in Item 19 — unable to verify profitability claims; only $388k average revenue provided
  3. 03MINORMinimal unit growth (1.8% YoY) — system is essentially stagnant with only ~70 locations
  4. 04HIGHOngoing Paris litigation (2020) with competitor alleging reputation damage and network disruption — material reputational risk
  5. 05MINORFDD registration violation in Maryland (2012) with consent order — compliance/governance red flag
  6. 06MEDHigh franchise fee ($49k) relative to slow growth and undisclosed margins — ROI unclear
  7. 07MINOR8% royalty on $388k avg revenue = ~$31k annual fee — materially impacts unit economics with unknown net profitability

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.