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A42/100FDD 2026

NHance — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
42 / 100
FranchiseVerdict composite
Rating
STRONG
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
5
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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
1.5 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 42/100 rating

Risk Score Breakdown

  1. 01MEDSystem contraction: 18% unit decline YoY (209 to ~171 units) indicates shrinking franchisee base and potential market saturation or operational challenges
  2. 02HIGHMultiple litigations: Three separate legal actions (unpaid royalties, misrepresentation claims, IP violations) suggest compliance issues, franchisor-franchisee friction, and possible quality control gaps
  3. 03MEDNo disclosed net income: Absence of Item 19 earnings claim prevents validation of the $625k average revenue claim and obscures true profitability for franchisees
  4. 04MINORHigh royalty floor: 6% minimum royalty on declining revenue base increases franchisee burden during economic downturns or slow periods
  5. 05HIGHLitigation pattern: Mix of franchisor enforcement (Amore, Finishline) and franchisee complaints (Torok misrepresentation) suggests systemic relationship 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.