Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial disclosure (average revenue and net income not disclosed) prevents ROI validation
- 02MINORRegulatory compliance violation in June 2022 with California DFPI for filing audited financials with suspended auditor license
- 03MINORExtremely rapid unit growth (200% YoY) with only 15 units total suggests potential overexpansion or unreliable growth metrics
- 04MEDHigh franchise fee ($49,500) combined with no disclosed average unit volumes creates unclear payback timeline
- 05MINORRoyalty structure ($500 minimum) means early-stage locations may operate at disadvantage if revenue is low
- 06MINOR10-year term locks franchisees into long commitment with young, unproven system (likely <3 years old)
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.