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
44 / 100
FranchiseVerdict composite
Rating
STRONG
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
1 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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 44/100 rating
Risk Score Breakdown
- 01MINORExplosive 200% YoY unit growth (14 units) suggests either aggressive recruitment or unsustainable expansion with unproven unit economics
- 02MINORHigh royalty floor ($500/month minimum) creates cash flow burden even for underperforming locations—problematic given only 14 units suggest immaturity
- 03MINORWide investment range ($168K–$363K) indicates inconsistent cost structure or territory-dependent pricing, reducing predictability
- 04MEDNo Item 19 (Franchisor Financial Performance) disclosed; cannot independently verify claimed $2M avg revenue and $536K net income
- 05MINORYoung franchise system (14 units) with minimal operating history; cannot validate sustainability of growth trajectory or franchisee profitability
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.