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F89/100FDD 2026

Next Day Access — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Elevated Risk

15 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
15
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
89 / 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
17
Government-backed loans issued
Default rate
100.0%
vs <3% typical · system-wide
5-yr default rate
100.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$4.1M
Avg loan size
$241K
Participating lenders
7

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
Michigan
State whose law governs disputes — relevant if you're not based there

What drove the 89/100 rating

Risk Score Breakdown

  1. 01MEDSignificant unit decline: 91 units represents 18% YoY contraction, indicating system stress and potential franchisee dissatisfaction
  2. 02MINORNo Item 19 (net income) disclosure despite $1.34M average revenue—prevents accurate ROI analysis and suggests profitability concerns
  3. 03HIGHLitigation pattern: Multiple breach of contract, non-payment, and non-compete violations indicate franchisor-franchisee relationship dysfunction
  4. 04MINORRegulatory history: 2012 FTC complaint and 2010 unregistered franchise sales violations show compliance and transparency issues
  5. 05MINORHigh initial investment ($194.5K-$412.9K) combined with declining unit base increases failure risk for new franchisees

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.