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B66/100FDD 2025

National Property Inspections — Litigation & Risk

Real Estate · 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
66 / 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
9
Government-backed loans issued
Default rate
28.6%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.1M
Avg loan size
$122K
Participating lenders
7

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
Nebraska
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 4.4% YoY (194 units) suggests system contraction and market saturation concerns
  2. 02MEDNet income not disclosed in Item 19 — inability to validate true profitability against $41k-$55k investment
  3. 03MINORRoyalty structure with $300-$500 minimum monthly creates fixed cost floor regardless of revenue performance
  4. 04MINORAverage revenue of $122k against 8% royalty ($9,786/yr) plus minimum fees ($3,600-$6,000/yr) leaves thin margin for expenses
  5. 05HIGHGoing Concern indicator is False — potential financial instability at corporate level affecting franchisee support
  6. 06HIGHNo litigation disclosed but declining unit base suggests possible franchisor-franchisee disputes or operational issues

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.