FranchiseVerdict
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B63/100FDD 2025

OsteoStrong — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

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Elevated Risk

6 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
6
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 100
FranchiseVerdict composite
Rating
MODERATE
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
55
Government-backed loans issued
Default rate
8.7%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$12.5M
Avg loan size
$228K
Participating lenders
28

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
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01HIGHMultiple active litigation cases involving misrepresentation and breach of contract allegations from former franchisees and regional developers
  2. 02MINORCalifornia regulatory consent order regarding failure to register franchise broker agreements, indicating compliance lapses
  3. 03MEDHigh initial investment ($275k–$615k) with no disclosed average revenue or net income data (Item 19) prevents ROI validation
  4. 04MEDSlow unit growth (7.0% YoY) on small base (153 units) suggests limited system momentum and market traction
  5. 05MINORRoyalty structure floor of $1,500/month ($18k annually) creates significant breakeven threshold for low-revenue locations
  6. 06MINOR10-year term locks franchisee into relationship with company facing active legal disputes

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.