B55/100FDD 2024
Medi-Weightloss — Litigation & Risk
Health & Wellness - Other · FDD Items 3, 4 & 5
Moderate — Review
4 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
55 / 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
48
Government-backed loans issued
Default rate
17.6%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$11.6M
Avg loan size
$242K
Participating lenders
14
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
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01HIGHNo Item 19 financial performance data published (Going Concern = False) — unable to verify if avg revenue/net income figures are representative or cherry-picked
- 02MEDModerate unit growth (15.8% YoY) is positive but system is still small (105 units) with limited scale; vulnerability to economic downturns in weight-loss sector
- 03MINORHigh royalty burden: Greater of $2,250/month floor OR 10% of gross sales — at $75,137 avg monthly revenue, franchisees pay ~$7,514/month (10%), reducing net margins significantly
- 04HIGH2014 litigation with former franchisee (Evelyn Kikta) involved contract disputes, trademark infringement, and employment claims — signals potential franchisor-franchisee relationship friction and IP vulnerability
- 05MINORWeight-loss industry faces regulatory scrutiny (FDA, FTC) and reputational risk; no mention of clinical validation or compliance framework in franchise overview
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.