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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
65 / 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
No
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 65/100 rating
Risk Score Breakdown
- 01MINOROnly 1 franchised unit in system with unknown growth trajectory indicates minimal validation of franchise model scalability
- 02MEDNo disclosed average revenue or net income data prevents realistic ROI assessment on $72,500-$169,000 investment
- 03MINORRoyalty floor of $1,000/month ($12,000 annually) requires minimum $20,000 monthly revenue to break even on royalties alone, creating cash flow risk for underperforming locations
- 04MEDHigh franchise fee of $40,000 (55% of minimum total investment) with 5-year term suggests long payback period with limited exit flexibility
- 05MEDExtremely limited unit count (1) makes franchisee the beta test for business model rather than joining proven system
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.