FranchiseVerdict
MRI Network logo
F79/100FDD 2023

MRI Network — Litigation & Risk

Business Services - Staffing · FDD Items 3, 4 & 5

Back to overview

Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
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
South Carolina
State whose law governs disputes — relevant if you're not based there

What drove the 79/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 17.3% YoY indicates systematic franchisee failure or attrition
  2. 02MINORThree concluded legal actions involving breach of contract, royalty disputes, and territory conflicts suggest systemic governance and enforcement issues
  3. 03MEDNo average revenue or net income disclosure (missing Item 19) prevents realistic ROI assessment on $24K-$48K annual fees
  4. 04MEDHigh fixed annual fees ($24K-$48K minimum) on undisclosed revenue creates cash flow risk, especially with 1% variable royalty
  5. 05MINORTerritory not protected despite 205 competing units exposes franchisees to internal competition and encroachment
  6. 06MINOR3-year term is unusually short, limiting franchisee ability to recoup $2K-$14.5K investment and build equity
  7. 07HIGHGoing Concern = False raises questions about franchisor's financial stability and long-term viability
  8. 08MINORZero franchise fee suggests franchisor prioritizes rapid unit growth over quality franchisee screening

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.