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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
75 / 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
77
Government-backed loans issued
Default rate
37.5%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
27 loans
Loans charged off or defaulted
Total loan volume
$13.5M
Avg loan size
$175K
Participating lenders
18
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Average Unit Volume) disclosed — impossible to assess ROI or payback period on $240k-$426k investment
- 02HIGHGoing Concern indicator is FALSE — suggests potential financial instability or unclear viability of franchisor
- 03MINORUnit count stagnant at 166 with unknown/likely flat growth — no expansion momentum in children's fitness sector
- 04MED7% royalty on gross revenue (not net) combined with undisclosed profitability creates unpredictable unit economics
- 05MEDHigh initial investment ($55k franchise fee + $240k-$426k total) with no disclosed average revenue benchmarks to justify ROI
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.