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F78/100FDD 2025

NerdsToGo — Litigation & Risk

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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
78 / 100
FranchiseVerdict composite
Rating
AVOID
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
30
Government-backed loans issued
Default rate
31.3%
vs <3% typical · system-wide
5-yr default rate
50.0%
Defaults
5 loans
Loans charged off or defaulted
Total loan volume
$5.0M
Avg loan size
$166K
Participating lenders
16

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 78/100 rating

Risk Score Breakdown

  1. 01MEDSystem contracting sharply (-8.8% YoY unit decline from 31 to 28 units) indicates weakening franchisee performance or high failure rate
  2. 02HIGHMajor litigation settlement ($8M in Sept 2024) involving franchisor leadership and fiduciary duty breach allegations raises governance and transparency concerns
  3. 03MEDNet income not disclosed in FDD despite average revenue of $356,574—lack of profitability transparency is a critical red flag
  4. 04MINORRoyalty structure heavily back-loaded (3.5% Year 1 vs 7% thereafter) creates cash flow pressure as franchisees scale
  5. 05MINORDeclining unit count combined with no Item 19 financial performance representations means no verified earnings claims to validate 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.