B63/100FDD 2025
Marigold Academy — Litigation & Risk
Education - Children's Programs · 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
63 / 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
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 63/100 rating
Risk Score Breakdown
- 01MEDOnly 2 units in system with unknown growth trajectory indicates extremely limited track record and franchisee success validation
- 02HIGHGoing Concern status = False suggests financial viability questions at corporate level
- 03MINORUnprotected territory creates direct competition risk within your market and cannibalization potential
- 04MINORHigh investment range ($846k-$2.4M) against only 2 operating units provides minimal comparable performance data
- 05MINOR7% royalty on $2.5M average revenue = $177.5k/year ongoing cost on already-thin 25.6% net margins
- 06MINORNo Item 19 financial performance representations limits ability to validate franchisee profitability claims
- 07MINORExtremely small franchise system creates survival risk if either existing unit fails
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.