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F79/100FDD 2023

Math Reactor — Litigation & Risk

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

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
79 / 100
FranchiseVerdict composite
Rating
AVOID
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
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 79/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial instability or accounting issues at franchisor level
  2. 02MEDZero disclosed units with unknown growth trajectory — impossible to validate system viability or franchisee success rates
  3. 03HIGHCEO litigation history involving non-compete violations and misrepresentation allegations with Code Ninjas — suggests pattern of aggressive/questionable business practices
  4. 04MINORNo Item 19 financial performance disclosure — cannot verify if average revenue or net income claims are achievable
  5. 05MINORDual royalty structure (6% vs 12%) creates unclear cost comparison and suggests different profitability models may not be equally viable
  6. 06MEDHigh initial investment range ($52K-$247K) paired with $500/mo minimum royalty but NO disclosed average unit volumes — franchisees bear significant downside risk
  7. 07HIGH10-year term is lengthy commitment given franchisor's going concern status and unproven track record

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.