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D72/100FDD 2024

Our Town America — Litigation & Risk

Business Services - Shipping & Postal · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
20.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$943K
Avg loan size
$189K
Participating lenders
4

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

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINOROnly 6 units in system with unknown growth trajectory suggests stagnant or declining franchise network
  2. 02MEDNo disclosed average revenue or net income (no Item 19) prevents realistic ROI assessment on $122k-$199k investment
  3. 03MINOR2007 Securities violation involving expired registration and forced rescission indicates compliance/governance weakness
  4. 04MINORHigh franchise fee ($100,000) relative to system size and lack of performance data creates misaligned risk-reward
  5. 05MINOR5-year term is relatively short and may indicate franchisor uncertainty or historical franchisee dissatisfaction
  6. 06MEDNo disclosed royalty rate is unusual transparency gap in FDD and suggests potential hidden costs

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.