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A53/100FDD 2026

PacLease — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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
53 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

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

Contract Risk Indicators

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

What drove the 53/100 rating

Risk Score Breakdown

  1. 01MINORNo average revenue or net income disclosure (Item 19) prevents ROI validation and profitability assessment
  2. 02MINORUnprotected territory creates direct competition risk between franchisees in same market
  3. 03MINORModest 4.1% YoY unit growth suggests slow system expansion and potential market saturation
  4. 04MINORShort 3-year term limits long-term business stability and requires frequent renewal negotiations
  5. 05MINORTiered royalty structure (1% → 0.5% → 0%) incentivizes revenue reporting opacity above $6M threshold

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.