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D70/100FDD 2025

Money Pages — Litigation & Risk

Business Services - Shipping & Postal · FDD Items 3, 4 & 5

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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
3
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
$340K
Avg loan size
$113K
Participating lenders
1

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 70/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 7.1% YoY (28 units is critically small system size)
  2. 02HIGHGoing Concern status is FALSE — indicates franchisor financial distress or viability questions
  3. 03MEDNo average revenue or net income disclosure (Item 19 missing) — impossible to validate ROI claims
  4. 04MEDHigh fixed monthly royalty ($3,000/month = $36,000/year) with undisclosed revenue creates unsustainable burden
  5. 05MEDFranchise fee ($50,000) represents 46-45% of total investment floor with no disclosed breakeven timeline
  6. 06MINOR7-year term is long commitment in declining system with no performance benchmarks provided

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.