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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
72 / 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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$4.6M
Avg loan size
$2.3M
Participating lenders
2
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 72/100 rating
Risk Score Breakdown
- 01MINOROnly 1 unit in system with unknown growth trajectory indicates potential system collapse or early-stage concept with unproven model
- 02MEDNo average revenue or net income disclosed (no Item 19) prevents assessment of profitability and return on $173k-$480k investment
- 03HIGHGoing Concern = False suggests franchisor may have financial instability or operational viability concerns
- 04MINORUnusual royalty structure (1/3 of subfranchisee royalties) is opaque and creates misaligned incentives between franchisor and franchisee
- 05MINOR$0 franchise fee combined with high unit costs is atypical and may indicate franchisor cannot attract capital through traditional fees
- 06MINOR25-year term is unusually long with only 1 existing unit — high lock-in risk with unproven concept
- 07MINORProtected territory is sole competitive advantage listed, but meaningless if brand has no market presence or demand validation
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.